MOVES to nationalise the Edinburgh to London rail line has sparked demands for the Scottish Government to bring ScotRail under public ownership.

Virgin and Sir Brian Souter's transport firm Stagecoach who ran the underperforming East Coast Main line were unceremoniously stripped of the lucrative franchise amid claims they had failed passengers and overestimated the revenue they would receive.

It means that the service - which also links Aberdeen, Glasgow and Inverness to England – will be controlled by the UK government for a year-and-a-half until a new public-private partnership running trains and track operations takes over in 2020.

HeraldScotland: Labour and the unions are opposed to refranchising the East Coast line which has been run in the public sector for four years

But the decision by Transport Secretary Chris Grayling has prompted fresh calls for Scotland's railways, to be brought under full public ownership.

Transport minister Humza Yousaf had been said to be preparing a public sector bid to take over ScotRail when the contract held by Dutch state-owned railway firm Abellio ends which will be 2022 at the earliest or till 2025 by mutual consent.

But Manuel Cortes, the general secretary of the transport staff union TSSA has said it is time to go for full nationalisation of ScotRail in the wake of a series of performance issues.

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He believes a publicly owned company could lose in a bidding war with private companies in 2022 and that the minister should take action to institute full public ownership immediately.

Mr Cortes said: “Chris Grayling has shown Humza Yousaf how it’s done. Let’s now see the Sottish Government nationalise ScotRail!


A grab from a TSSA video calling for Scotland's railways to be nationalised

"Mr Grayling has finally been stopped from pouring good public money after bad when propping up Virgin East Coast. This must be a complete humiliation for a dyed-in-the-wool market fundamentalist like him. He would have rather walked on broken glass than bring this rail line back into public ownership.

"Between London, Edinburgh, Aberdeen and Inverness, poor passengers have put up with rising ticket prices in exchange for rapidly deteriorating services, enduring increasingly delayed train times, dreadful overcrowding and all too often, no seat at all.

"Putting East Coast out to private pasture was always a national scandal."

Mr Grayling's announcement to temporarily nationalise came after operators could no longer meet the promised £3.3bn payments to run the franchise until 2023.

HeraldScotland: Sir Brian Souter, Stagecoach chairman

Sir Brian Souter

Stagecoach chief executive Martin Griffiths said the firm was "surprised and disappointed" by the decision as it believed its plans offered a "positive, value-for-money way forward for passengers, taxpayers and local communities".

He pledged to "work constructively" to ensure a "professional transfer" to the new arrangements.

It marks the third crisis of private ownership of the London-to-Edinburgh rail line in 11 years.

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Great North Eastern Railway was stripped of the franchise after its parent company became insolvent in 2006 and National Express handed back the line in 2009 after financial difficulties.

Stagecoach had previously clashed with the government over the terms of its East Coast franchise admitting that in hindsight it overpaid for the contract, blaming factors including Brexit and terrorism for underperformance that punched an £84m hole in its finances.

As with other recent public private contracts, a propensity to overbid in order to win the lucrative contracts has led to the downfall of a string of train operators on the rail line.

Stagecoach and Virgin promised to give the government £3.3bn in premiums when the consortium won the contract three years ago.

But falling passenger numbers and a tougher than expected economic climate meant the operator “got its numbers wrong” to use the words of Mr Grayling.

Mr Grayling told the Commons that Stagecoach and Virgin have lost almost £200m, but there had not been a loss to taxpayers "at this time".

The East Coast line has underperformed in its first two years, forcing Stagecoach to take a one-off charge of £84m for the “onerous contract”.

Problems on the East Coast contributed to a collapse in Stagecoach's pre-tax profits for the year to 29 April, last year to £17.9m, compared to £104.4m the year before.

Analysis: ScotRail under scrutiny as performance is reviewed

An Abellio spokesman said: “We are investing £475m in improving Scotland’s railways delivering more seats and faster journey times for passengers as part of our plan to give Scotland the best railway it has ever had.

"The contract is already very tightly specified and we have no problem competing with a public sector bid should that be what the Scottish Government decides to do.”