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U.K. Says Virgin Rail Bid Wasn’t Seen by Top Officials, Advisers

Oct. 31 (Bloomberg) -- Richard Branson’s bid to retain the premier U.K. rail route for his Virgin Trains wasn’t scrutinized by top transport officials or any external financial advisers, a senior civil servant said today when questioned by lawmakers.

The role of three people suspended following the collapse of the West Coast tender is being examined in a human resources inquiry, Philip Rutnam, permanent secretary to the Department for Transport, told the House of Commons Transport Committee.

Rutnam said that procurement rules meant senior officials weren’t allowed to view confidential details of proposals from Virgin and successful bidder FirstGroup Plc, which was stripped of the London-Scotland contract when “serious flaws” were detected in the process after a legal challenge from Branson.

The staff suspensions are “precautionary only and do not imply any judgment as to conclusions the department will reach on their behavior,” Rutnam said. Investigators are seeking access to internal emails pertaining to the bids to evaluate whether Branson’s pitch was discriminated against.

Transport Secretary Patrick McLoughlin told the committee that the DfT as a whole shouldn’t be blamed for the West Coast debacle, while revealing that costs of the failure will exceed the 40 million pounds ($64 pounds) previously stated.

The tender for a franchise that carries 31 million people a year to cities including Birmingham, Liverpool, Manchester and Glasgow was halted on Oct. 3, seven weeks after FirstGroup had been handed a contract on Aug. 15 with a 5.5 billion-pound bid.

To contact the reporters on this story: Tom Metcalf in London at tmetcalf7@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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