News Release

4th June 2008

VICTORY ON LENGTH OF TRAINS

Michael Fabricant has expressed his delight at a victory in persuading the Government of the need to place orders now to extend the length of Pendolino trains on the West Coast Main Line from 9 cars to 11. Michael says: "The Government had got into a huge row with Virgin Trains over this issue and Downing Street had proposed that new trains would not be available until 2016. Following constant pressure from me and other colleagues, they have now performed a U-Turn. Four new 11 car trains will be delivered in November 2010 and will undergo testing. By the end of 2012, subject to certain conditions, 36 11-car trains will be in operation. I will be making sure that the Government will not renege on their commitment because of their opt out if "value for money and affordability checks" are not deemed acceptable to the Treasury. I will be keeping up the pressure."

Tom Harris, the Minister responsible for rail at the Department of Transport has written to Michael Fabricant. In his letter, Mr Harris says:-

1. The Department for Transport has issued a 'Notice to Proceed' to West Coast Service Provision Ltd (Alstom) in connection with the supply of four new 11-car trains and a further 62 new vehicles to lengthen 31 of the existing trains from 9 to 11 vehicles. These are the 106 vehicles pledged in the Department's Rail White Paper and recent Rolling Stock Plan. Alstom is now able to commence the order of long lead components and to secure the factory production slots, so that there is no delay to the timescales for the extra capacity to be provided. Subject to terms being agreed and value for money and affordability checks, the proposed arrangements with Alstom should see all these extra 106 vehicles in full traffic by the end of 2012. Confidential negotiations continue on the funding of these new trains and vehicles.

2. It is anticipated that the first two of the new trains will arrive in 2010/11. They will then be extensively tested and be used to obtain safety acceptance of the lengthening from 9 to 11 cars. A process is also underway to competitively select a 'Service Provider' who, up to March 2012, will operate the new trains in test mode and be responsible for securing the safety acceptance for the 11-car trains.

3. Following expressions of interest, two parties have been successful, and will move forward as the short listed bidders for this contract. These are Govia Transportation Projects Limited, a wholly owned subsidiary of GoVia (who operate the current London Midland franchise) and Virgin Rail Projects Ltd, a wholly owned new subsidiary of Virgin Rail Group Holdings Limited (who operate the current West Coast franchise). These two bidders will receive Invitations to Tender for this work shortly. The successful bidder will, in due course, be appointed as the Service Provider. It is intended that these services will be performed independently from their existing franchise contract(s) with the Department.

4. Meanwhile, the Office of Rail Regulation (ORR) has confirmed that it views Network Rail's plans to deliver the December 2008 major step up in capacity, frequency and reduction in journey times on the line to be deliverable. This will represent a 45% increase in long distance services from London Euston. Increased frequencies, major reductions in journey time and the commencement of a seven day railway with weekends operating almost exactly to weekday schedules (except for Christmas, New Year and the Sundays of Bank Holiday weekends) are expected to grow the business substantially. Virgin Trains has reached a resolution with Network Rail and the work programme has been adjusted slightly so the Virgin driver training programme can be achieved without cancellations in the service during the summer that Virgin had feared might be necessary.

5. The Department has also secured an option to procure 42 further additional vehicles, to lengthen the remaining 21 of the 56 trains to 11- cars. This option can be exercised up to 2010. If exercised, the option would enable the production line to flow smoothly onto this further lengthening, if required by demand growth.

6. I am sure that you will be pleased at the progress being made in resolving issues for the future on the route. Two incorrect reports appear to have found their way into the media and I would like to take this opportunity of correcting them.

* Firstly, subject to contracts being agreed, the new trains and vehicles will be available for service when they achieve safety approval and, if available, will be offered for use to the Virgin West Coast franchisee. We do not anticipate any 'new trains being parked'.