Rail bid rule change 'proves West Coast process was flawed' The DfT requires rail franchise bidders to put up a performance bond, season ticket bond and subordinated loan facility (SLF), which are forfeited if they fail to fulfil the contract. In the West Coast bid there is an additional element covering guaranteed station improvements. The key element is the SLF, which is described in the Great Western tender documents as necessary "to give comfort that the Government is contracting with an entity that is robust enough to deal with a wide range of downside scenarios." The size of the SLF depends on the DfT's evaluation of the risk in respective bids. FirstGroup was required to put up £190m versus just £40m from Virgin Rail, which is 51pc-owned by Virgin and 49pc by Stagecoach. That reflected FirstGroup's punchier bid, which promised to return £13.3bn to the taxpayer over the full contract to 2028 based on forecasts of annual revenue growth of 10.4pc. Virgin Rail promised £11bn based on 8.5pc growth per year. To calculate the SLF, the DfT makes various "risk adjustments" to a bidder's forecasts. Crucially, while bidders for the West Coast were required to provide a bank-guaranteed SLF worth 60pc of the risk-adjusted figure, the four short-listed bidders for Great Western have been told that is going up to 100pc. The bidders are National Express, the Deutsche Bahn-owned Arriva, Stagecoach and FirstGroup. The timing of the change has also raised eyebrows in the industry. The invitation to tender document for Great Western was published on July 27 - just as Virgin Rail began to hear that it had lost the West Coast bid. A Virgin Rail spokesman said: "Such a significant change in the way the DfT assesses risk suggests that it now realises there were insufficient safeguards in place in the West Coast franchise process to protect the taxpayer and passengers from the kind of highly aggressive bid submitted by FirstGroup." A DfT spokesman said: "It is not accurate to suggest that the Great Western franchise bid terms have in any way been influenced by the West Coast situation - they've been in place since before West Coast announcement was made. Each franchise is unique, terms differ to reflect this. Sir Richard is already furious at what he claims are double standards by Justine Greening - the former Transport Secretary who was moved to a different department in last week's reshuffle - over how she assessed the rival bids. Virgin Rail's legal claim alleges that Ms Greening unfairly "assessed FirstGroup's bid by reference to a much less exacting standard of risk-mitigation... and has done so without any explanation or justification." Executives at Virgin Rail claim FirstGroup would have had to put up an SLF closer to £600m - rather than £190m - if Ms Greening had applied the same standards. FirstGroup declined to comment.