Intercity Railways, a joint venture between Virgin Trains and Stagecoach, has been awarded the contract to run rail services on the East Coast Main Line.
Under the deal Intercity Railways will pay the government around £3.3 billion over the eight-year term of the contract, while investing £140 million in train refurbishment and improved facilities. From 2018 new trains, built by CIPS SM award winners Hitachi Rail Europe, will run on the line.
The government has run services on the line since 2009 following the termination of a contract with National Express, which won a seven-and-a-half year contract in 2007 to run services but could not make it pay.
Transport secretary Patrick McLoughlin said: “This is a fantastic deal for passengers and for staff on this vital route. It gives passengers more seats, more services and new trains.
“We are putting passengers at the heart of the service. I believe Stagecoach and Virgin will not only deliver for customers but also for the British taxpayer.”
However, the RMT has criticised the contract award. General secretary Mick Cash said: "It is a national disgrace and an act of utter betrayal that the government has confirmed that it is bulldozing ahead with the re-privatisation of the East Coast Main Line despite all the figures showing that the current public sector operator is handing over a billion pounds back to the British people while delivering huge improvements in service and customer satisfaction.”