Virgin's £55m ghost rail fleet

VIRGIN paid £55m last year to lease new state-of-the-art tilting trains - only for them to sit idle in rail sidings.

The astonishing revelation, buried in Virgin Train's latest accounts, relates to a fleet of high-speed Pendolinos, whose introduction on the West Coast line between London, Manchester and Glasgow has been dogged by delays and technical problems.

Under the bizarre rules of rail privatisation, operators such as Sir Richard Branson's Virgin are contractually obliged to pay lease charges to rolling stock companies, regardless of whether the locomotives and carriages are used.

Virgin ordered the Pendolinos from leasing company Angel Trains, part of the Royal Bank of Scotland. The £800m fleet of 53 trains are designed to run at 125mph and cut journey times by a fifth.

But production difficulties, delays in upgrading the West Coast line and problems with the Pendolinos' on-board computer system, put their introduction back by up to two years. Virgin issued a High Court writ last year seeking £83m from Alstom, which built the Pendolinos, for late delivery.

The £55m charge meant Virgin's rolling stock costs rocketed by 49% to £290m in the year to March 2003.

By contrast, Virgin's track access costs - the amount it pays to use the rail network - rose 10% to £409m, while its Government subsidy jumped from £306m to £371m. Operating profits fell to £26.3m.

The Financial Mail on Sunday revealed last month that Virgin Trains chief executive Chris Green's pay more than doubled to £522,000 from £230,000 because of what a spokesman described as 'the successful introduction of Voyager trains on our CrossCountry service'.

Virgin had to pay compensation of £31m to passengers on the CrossCountry route because of its failure to introduce new trains by January 2001.

And last September, the Voyager trains were still failing every 11,200 miles, compared with a failure target of every 28,000 miles when manufacturing contracts were signed.