Failed West Coast Rail Auction to Cost £40million [4th Oct 2012]
It is expected that the UK taxpayer will need to pay £40m in compensation to the train companies who have been affected by the west coast rail bidding process breakdown. The Department for Transport has admitted that the bidding process has fallen apart due to serious flaws in calculations. This has meant that the process will need to be restarted less than two months after it had appeared that FirstGroup had won the deal over Virgin Rail. The new transport secretary Patrick McLoughlin has said he is angry and that the department is entirely to blame, however he had defended the process as being robust before the news came out. The four shortlisted companies in the bidding process are now entitled to compensation of £10m each, but it is thought that other franchises elsewhere on the network may also need to be compensated if the timetable for their renewals slips due to this issue. It has been suggested that the previous transport secretary Justine Greening was removed form her post in a bid to prevent her inevitable resignation. Related Stories: Virgin rail back on track in west coast shambles - www.guardian.co.uk An expensive mistake: rail fiasco could cost taxpayer over £100m - www.independent.co.uk An investigation by the Information Commissioners Office (ICO) has led to two people being charged with sending out millions of spam text messages to people offering them accident compensation and PPI compensation. It is thought that the ICO crackdown could lead to another eight companies facing fines of up to £500,000 along with the two current suspects. The ICO have cited a number of abuses of the texting system including ignoring STOP messages, failing to give the name of the sender within the text and selling the names of the recipients to other marketing companies. It is also illegal to send unsolicited marketing texts. Simon Entwisle from the ICO has said that these people are blatantly breaking the law and could be in line for a six figure penalty. The two people who are currently under investigation have been given 28 days to explain their activities. They are linked to a company which is registered under the Data Protection Act, but these laws have been broken. The ICO has received 30,000 examples of texts sent from disgruntled consumers in the last six months since they asked the public to come forward. Related Stories: Spam text senders face fines of up to £500,000 - www.guardian.co.uk Spam text senders face fines of up to £500,000 in the UK - hereisthecity.com The Transport Salaried Staffs Association (TSSA) has called for an inquiry into refunds for delayed passengers. They are claiming that Network Rail paid £172m to train operators for train delays and just £10m of this went to passengers in the form of compensation. The TSSA union has also pointed out that the publicly owned line, East Coast paid out £6.6m in compensation while other operators only paid an average of around £400,000. The TSSA secretary Manuel Cortez has claimed that it is a rigged system where private rail firms can get millions from the taxpayer if their trains are a few minutes late, but the passenger will only get a refund if their train is two hours late. He says that East Coast seems to be proactive about paying compensation while other train lines make it hard for the passengers. However a spokesman from the Association of Train Operating Companies has said that the claim is misunderstood. He points out that passenger compensation is easy to apply for but it is separate from the money paid to train lines for delays. Related Stories: Rail users ripped off on refunds - www.independent.co.uk Private rail firms rip off passengers by over £150 million on refunds payouts - www.tssa.org.uk  |
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