The infamous botched West Coast rail contract is set to cost at least 50m pounds, and could be ever larger, MPs revealed Tuesday.
According to a report by the Commons Public Accounts committee, the collapse of the deal was the result of a series of mistakes by civil servants and a 'lack of leadership'.
Labour MP Margaret Hodge, who is the Chairman of the committee, said: "The franchising process was littered with basic errors. The department yet again failed to learn from previous disasters, like the Metronet contract. It failed to heed advice from its lawyers. It failed to respond appropriately to early warning signs that things were going wrong.
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"Senior management did not have proper oversight of the project. Cuts in staffing and in consultancy budgets contributed to a lack of key skills.
"The project suffered from a lack of leadership. There was no single person responsible from beginning to end and, therefore, no one who had to live with the consequences of bad policy decisions.
"For three months, there was no single person in charge at all. Not only that, there was no senior civil servant in the team responsible for the work, despite the critical importance of this multi-billion pound franchise."
The contract, which was originally awarded to FirstGroup, fell through after Vigrin Trains complained about the way it was operated. Virgin, which previously held the contract, will continue to do so until November 2014, when a new bidding process will begin.
The Committee also said the handling of the deal showed a "complete lack of common sense" and warned the cost of the fall out might be "very much larger" than the sum of £50m. The report detailed "fundamental errors" and "previous disasters".
Last month a seperate report by the Commons Transport Committee attributed the blunders to "irresponsible decisions" by the Transport Department.
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