Virgin may move train operation to Spain after British snub

virgin trains

Virgin Trains may move into Spain’s railways after being disqualified from bidding for new British contracts for refusing to take on pension liabilities.

The Spanish government has announced plans to open up its high-speed train network to attract competition to Renfe, the state-backed operator.

Virgin Trains has shown its hand after Phil Whittingham, its managing director, visited Madrid last week and declared an interest in Spanish rail liberalisation from December 2020.

Virgin Trains is a joint venture between the trading empire of Sir Richard Branson and Stagecoach, the British transport group. It operates the west coast main line from London Euston to Birmingham, Manchester, Liverpool and Scotland.

Last year it was thrown off the east coast main line after a breakdown in relations with the Department for Transport. This year it was banned from bidding for the planned HS2 high-speed line between London and Birmingham, while Stagecoach was disqualified from the East Midlands Trains and Southeastern tenders in a spat over the failure of the department to quantify future pension risks.

Stagecoach is taking Chris Grayling, the transport secretary, to judicial review on the issue. Virgin mocked him in newspaper ads after it was named best UK train operator, with the catchline: “That’s good isn’t it, Chris?”

Patrick McCall, Virgin Group’s senior managing director, confirmed the company’s Spanish interest. “We’ve revolutionised UK rail over the last 22 years,” he said. “Unfortunately the UK is fast becoming uninvestable from a rail franchise perspective because of the UK government’s decision to load unacceptable risk on to bidders. We welcome the liberalisation of the Spanish rail market, where we hope competition will be allowed to flourish.”

In Spain, Virgin will be up against Deutsche Bahn, SNCF, of France, and Trenitalia. Other bidders could include National Express, which has quit the British rail market but is a big player in the Spanish bus and coach market.

Virgin Trains is already operating abroad, with a service running between Miami and Orlando in America.