Freebies gets a freebie

The debacle around the West Coast Main Line rail bid is one of those situations where there are many identifiable losers, but no clear winners.

Certainly, the Department for Transport (DfT) comes off rather poorly. It’s decision to scrap the franchise, which had been stripped from Virgin Rail Group and awarded to First Group in August, following the discovery of flaws in the bidding process has opened it up to a barrage of criticism. Meanwhile, the taxpayer is expected to lose out to the tune of £40m after all the bidders are refunded for the cost of the bodged tender. It’s hard to imagine that the limbo in which the rail line has been placed in terms of its management will benefit customers of the service much, either.

And what of freshly merged Herbert Smith Freehills (or Freebies as it has semi-affectionately been dubbed)? Legacy Herbert Smith had been instructed on the tender bid by Virgin and was then instructed to help the company get a judicial review into the DfT’s decision to hand the franchise to First Group. Virgin boss Sir Richard Branson had been particularly vocal in questioning the sustainability of his rival’s bid and the DfT’s preparation to rebuff his arguments led to the discovery that he was right: the ministry had not done its sums properly when calculating the risk associated with First Group’s bid.

As a result, Herbert Smith Freehills has been invited to withdraw its request for a judicial review. Does that count as a victory? Probably not.

But then, given that the decision means Freebies will likely get another bite of the cherry advising Virgin when the DfT gets round to reissuing the tender, it’s not something to worry about. As the taxpayer discovered today, these tenders don’t come cheap.


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