TOCs InterCity East Coast Franchise Failures

Passenger Rail Franchising Companies in Great Britain (TOCs)

In December 2006 Sea Containers, which had held the InterCity East Coast franchise through its Great North Eastern Railway TOC since 1996, was stripped of its contract six years before it would have expired, due to financial difficulties. The franchise was re-tendered and awarded to National Express in August 2007, GNER continued to operate the franchise on a management contract basis until December 2007, when services transferred to the new National Express East Coast TOC. By early 2009, NXEC had itself run into financial difficulties due to the recession, after the government refused to renegotiate the terms of National Express's contract, it was announced in July 2009 that the franchise would return to state ownership. Services duly transferred to the new, publicly-owned East Coast TOC in November 2009.

The franchise was eventually re-tendered and awarded to a joint venture between Stagecoach and Virgin in November 2014, with services transferring to the new Virgin Trains East Coast TOC in March 2015. By June 2017 VTEC, like GNER and NXEC before it, had run into financial trouble, with Stagecoach attempting to renegotiate the terms of the contract. In May 2018 it was announced that the franchise would return to state ownership again, with services duly transferring to the new, publicly-owned London North Eastern Railway TOC the following month.

The 2003 purchase of GB Railways by FirstGroup was seen by some as an attempt by First to bypass the franchising system: GB were the holders of the Anglia Railways franchise, which was being re-tendered at the time. First had already been rejected for the shortlist of three bidders, which included the incumbent. Responding to media criticism that he had been "outmanoeuvred" by First, the head of the SRA argued that he could not decide who would become a preferred bidder based on what might happen in future regarding mergers and acquisitions. The purchase went through, but GB was unsuccessful in winning the Anglia franchise, as well as two others it was bidding for (Northern and Wales & Borders).

In October 2000, after passenger complaints, the SRA announced that Connex would be losing its contract to run the Network SouthCentral franchise on its expiry in 2003, which it had been operating through its Connex South Central TOC. Having announced the new operator (from 2003) would be Southern, a Govia subsidiary, the South Central TOC was sold to Govia in 2001 as a way of terminating their involvement early and cutting their losses. In November 2003, Connex was stripped of its only other UK rail operation, the Connex South Eastern TOC running the South Eastern franchise, eight years before it would have expired, due to poor financial management. It was replaced by a new, publicly owned TOC, South Eastern Trains. The franchise was eventually returned to the private sector through re-tendering, which saw it pass to the Southeastern TOC April 2006 as part of the newly created Integrated Kent franchise.