Sir Richard Branson banked a £17.8m dividend last year from Virgin Rail — a train company that received £40m in taxpayer support over the same period.
The payment takes the total Branson has received from the railways since they were privatised to £188.8m.
Virgin Rail, a joint venture between Branson and Stagecoach, the quoted transport company run by Sir Brian Souter, has operated services on the London to Glasgow line since 1997. Last week’s results from Stagecoach, which owns 49% of Virgin Rail, showed it received a £17.1m dividend from the venture last year. It indicates Branson made £17.8m for his 51%.
The total Branson has made from the business is even more startling because Virgin Rail only began paying out dividends to its two shareholders from 2004 — nothing was paid between 1997 and 2003.
Virgin Rail said: “Virgin took no dividend for the first seven years and now the turnover is one of the strongest in the industry.”
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Virgin Rail’s contract to run the London to Glasgow line comes to an end next year. It is one of four shortlisted groups seeking to win the next franchise. The other bidders are FirstGroup, Dutch-owned operator Abellio and French state-owned rail company SNCF.
The Department for Transport has told the four bidders that the new-look contract will start in January 2013, rather than April 2012 when the current deal ends. Virgin Rail is in talks with the government about extending the franchise for a year.
The West Coast route is being lined up as a showpiece of franchise reform, as ministers consider longer, 15-year rail contracts.
Separately, two Labour frontbenchers will this week write to David Cameron urging him to review the award of a £3.4 billion contract to Siemens to build and maintain trains for Thameslink. The German group won the 1,200 carriage order ahead of Bombardier, Britain’s last train manufacturing company.
In the letter, John Denham, shadow business secretary, and Maria Eagle, shadow transport secretary, will say: “The news that the contract had been awarded to a consortium that will build the Thameslink carriages in Germany dealt a body-blow to British manufacturing. The only remaining company that designs, builds, maintains and exports trains and parts in the UK is now in peril.”
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Bombardier has warned that the decision may lead to it winding down its manufacturing operations in Britain, where it employs 3,000 in Derby and 2,000 elsewhere. It has already issued 90-day redundancy notices to hundreds of workers.