The East Coast Mainline renationalised by government after Virgin Trains deal terminated after a troubled tenure, with many passengers complaining of sky high tickets prices, and the private operators claiming they can turn a profit.
Trains will be now be run by the Department for Transport (DfT) from 24 June this year.
“We are surprised and disappointed that the Department for Transport has chosen not to proceed with our proposals,” said Martin Griffiths, chief executive of Stagecoach, who run the franchise with Richard Branson’s operation.
He added: “We believe our plans offered a positive, value-for-money way forward for passengers, taxpayers and local communities, ensuring the continuation of the exciting transformation already under way on East Coast and a smooth transition to the Government’s new East Coast Partnership.
Rail, Maritime and Transport union general secretary Mick Cash said: “This is the second time that the government have called upon the public sector to launch a rescue operation on the East Coast Main Line and instead of being a temporary arrangement Chris Grayling should listen to his staff and the public and make it permanent.
“After three shambolic private sector failures on the East Coast the message should now sink in that these cowboys cannot be trusted and should be locked out of the system on a permanent basis.
“Anything else risks playing out the same expensive farce over and over again. RMT will now be seeking an urgent meeting with the new operator to bolt down guarantees for staff on jobs, conditions and pensions.”
The franchise was supposed to run for eight years between 2015 and 2023. However, the private operators have complained of losing money on the line between London and Edinburgh.