Dramatic improvements to our rail network were announced by Ministers yesterday, but the proposal for 106 new coaches on the West Coast Main Line has already hit the buffers.
The carriages are meant to reduce overcrowding for commuters travelling between London, Birmingham and the north. They form an important part of the Government's overall proposals, which include 1,300 new carriages across the country.
The difficulty is that Virgin Trains is caught in deadlock with the Government over the date its franchise ends.
As things stand, Virgin is guaranteed to operate the West Coast route only until 2012. But the new carriages will not come into operation until 2010 or 2011. Furthermore, although Virgin will not pay for the carriages themselves, it will have to spend significant sums to make them operational.
In other words, it will have to spend a lot of money on new coaches which it may only use for around 18 months.
It seems likely, of course, that the firm's franchise will be renewed, but this is not certain. So the firm's reluctance to go ahead with the addition of new carriages might be seen as understandable.
On the other hand, the Government is surely right to refuse to give in to what is effectively blackmail. Ministers cannot allow train operators to demand extensions to their franchise as the price of giving customers a better service. If they did, they would soon find that every rail company had a good reason for demanding that their agreements were re-negotiated.
Franchise renewals are a good thing. Rail operators don't quite enjoy monopolies, but they don't have to compete for customers either. In the absence of market forces, some mechanism is needed to ensure they do a good job - or that they face the consequences of failure.
Franchise renewals keep rail operators on their toes, and provide an opportunity for the lousy ones to be sacked. As a rule, Ministers should be wary of granting extensions unless there really is no alternative.
It's worth noting, however, that Virgin is not a bad operator. It has improved services on the West Coast Main Line, working closely with Railtrack and the Department for Transport.
Both Virgin and the Government need to patch up their relationship and get back to working in partnership.
It's hard to believe no way can be found to get the new coaches up and running - if both sides are willing to make the effort.