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CMA flags competition concerns on First Group’s West Coast Rail franchise

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First Group is working to deliver a long-term government contract for its hailed subsidiary Avanti as the group focuses on ensuring “acceptable” service levels to passengers. 
First Group is working to deliver a long-term government contract for its hailed subsidiary Avanti as the group focuses on ensuring “acceptable” service levels to passengers. (Getty)

The UK’s competition watchdog has sounded the alarm on 21 routes awarded under the new West Coast Rail franchise.

The Competition and Markets Authority (CMA) has concerns on routes between Preston and Scotland after the government awarded the rail franchise to a joint venture between First Group and Trenitalia.

Read more: Watchdog casts eye over First Group and Trenitalia’s West Coast franchise

An initial investigation found that with the two companies running the franchise, “this could lead to higher fares and less availability of cheaper tickets”.

It added: “Train passengers would have no alternatives, or limited options, to choose from”.

Passengers would only have a choice between West Coast Rail, operated by First Group and Trenitalia, or First Group’s Transpennine Express service for 17 routes, the CMA warned.

It is now likely that First Group will have to offer remedies if it wants to push the joint venture through.

When the watchdog raised concerned over the East Midlands Rail franchise award to Abellio and First Group, the companies agreed to price caps on affected lines.

MTR also alleviated the CMA’s fears over its acquisition of South Western with price caps.

But there is little over a month until the franchise is due to begin on 8 December, giving First Group little time to mull on ways to resolve the watchdog’s concerns.

“Should any proposals offered be considered insufficient by the CMA, a more in-depth Phase 2 investigation will be conducted,” the CMA said.

The watchdog stepped in to investigate the award of the rail franchise in lateSeptember citing fears of a “substantial lessening of competition”.

The government appointed First Group and Trenitalia’s joint venture to run the West Coast Rail franchise from December 2019 to 2031 in August.

Read more: South Western Railway December strikes ‘will hurt Christmas shopping’

They replace Virgin on the line that spans London Euston to Glasgow via Birmingham, Liverpool and Manchester.

“We have been discussing our plans for the new West Coast Partnership franchise with the CMA for several months and we are pleased that on the vast majority of routes, it has found no competition issues,” a First Group spokesperson said.

“Now that this update gives more clarity, we look forward to submitting our proposals which we envisage will satisfy their concerns.”

Main image credit: Getty