Posted 17th January 2014 | 11 Comments
Shortlist for East Coast franchise announced
(Story updated 12.28, 17 January.)
THE Department for Transport has revealed the list of contenders who have been shortlisted to take over the East Coast franchise in early 2015.
The three groups which have made it through to the final round are FirstGroup, Keolis/Eurostar and Stagecoach/Virgin Trains.
The return of East Coast to the private sector is a controversial move, which has been opposed by rail unions and others. It was taken over by the DfT's subsidiary Directly Operated Railways in November 2009, after National Express Group had been forced to withdraw when revenue failed to meet expectations.
However, the DfT is pushing ahead with what will effectively be a sale of the existing operator, offered as a going concern. The new contract is expected to last for eight to nine years, with a possible two-year extension.
Rail minister Stephen Hammond said in the Commons yesterday (16 January) that the result of the competition can be expected in October.
Virgin has recently revealed that it is the minority partner in its bid with Stagecoach, and if it succeeds will have 10 per cent of the operation. On Intercity West Coast Virgin has 51 per cent and Stagecoach the rest.
The ratio of the split between Keolis and Eurostar has not been published, but Eurostar has been described as having a 'minority' share.
There was one immediate comment from FirstGroup, which won and then lost the Intercity West Coast franchise in 2012 because of confusion within the DfT over bid calculations. First's director of UK Rail Vernon Barker said the group was 'delighted' to have been shortlisted, and added: "We look forward to reviewing the contract details and submitting an innovative, compelling, and value for money bid."
Stagecoach Group said that it had already started consultations with stakeholders along the route, while a spokesman for the joint venture of Keolis and Eurostar said its bid, which is being led by former East Coast chairman Elaine Holt, 'was set to focus on the combination of Keolis’ proven franchise management skills and Eurostar’s record of customer service delivery and product innovation'.
The DfT said the three bidders which have passed the Pre-Qualification Evaluation stage 'can now start working on developing their plans for the franchise, before they receive the Government’s Invitation to Tender'.
The winner of the franchise will be the operator of the new Intercity Express fleet which has been ordered from the Hitachi-led consortium Agility Trains by the DfT for the East Coast and Great Western Main Lines, and which is being assembled in County Durham.
The DfT commented that 'these potential operators will need to consider how they intend to use the latest high-tech trains, built in the UK by Agility, to deliver more passengers to more of the UK's biggest cities faster and in greater comfort'.
Apparently in response to the opposition, the official statement continued: 'While the East Coast franchise has been stabilised under government ownership since 2009, the route now needs a long term private sector operator to plan for the future and meet the increasing demands for more trains serving even more destinations.'
Rail minister Stephen Hammond said: “Giving passengers more will be at the heart of the new East Coast franchise. That means new services and journeys that are faster, more punctual and more comfortable. When these companies are developing their proposals they should be looking at ways to innovate and grow the service.
“We have embarked on one of the biggest programmes of rail investment ever, with over £35 billion being spent to enhance and run our rail network over the next five years. But for our railways to continue to grow we need strong private sector partners who can invest and innovate in ways that deliver a world class service.”
Rail Delivery Group director general Michael Roberts added: “This marks a further important step in bringing private sector innovation and investment back. Britain has a winning formula where private operators are focused on encouraging more rail use and Network Rail concentrates on improving the infrastructure."
However, voices opposing the new franchise have been heard again today. RMT general secretary Bob Crow said: “The truth is that out of pure ideology, this government is prepared to take a third gamble on their big-business friends in a desperate bid to privatise the East Coast Main Line before the election.
"The publicly owned East Coast is Britain's most successful rail operation carrying more passengers per mile, more efficiently and with the highest levels of passenger satisfaction and handing over £200 million a year back to the taxpayers. That is what the government are out to destroy."
The DfT is planning to issue the Invitation to Tender at the end of February. It said the shortlisted operators 'will then have at least three months' to develop their bids and lodge their final responses. The winner is due to take over the franchise in February 2015.
THE OFFICIAL LIST
East Coast Trains Ltd (First Group plc)
Keolis/Eurostar East Coast Limited (Keolis (UK) Limited and Eurostar International Limited)
Inter City Railways Limited (Stagecoach Transport Holdings Limited and Virgin Holdings Limited)
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
M allanson, Consett
East Coast provides excellent service, please leave well alone
Al, Manchester
Clayton, are you having a laugh, First run the most number of railways in the country. What with Scotrail, Transpennine Express and East Coast, there would be no competition anything North of York (excluding Cross Country). Had they got the WCML there would have been no competition for intercity services in the whole of the North West of England and the entire West of Scotland. There would be competition at all.
Although I would rather have a UK based company, I don't trust First as far as I can throw them, look at their disgraceful behaviour with the Great Western Mainline and with the WCML tender.
john graham, tyne & wear
the east coast has not been run properly since GNER and never will be they did it the way it should be done
Andrew, Winchester
claydon william, Norwich Norfolk - absolutely spot on about the SNCF and French attitudes in general. The same is equally true of their rolling stock manufacturing industries, and their power, gas and telephone industries. Whilst I would like to see the company that offers the best service and financial returns win this should only be on the proviso that in the case of an overseas company reciprocal arrangements exist in their home markets. SNCF/France have flagrantly abused various EU directives and indeed are subject to EU fines which probably won't be paid !!!
claydon william, Norwich Norfolk
Virgin should not have been shortlisted on competition grounds, and SNCF should not have been shortlisted on the grounds of the blind hypocrisy of a Nationalised French Company bidding for private sector business from a country that does not allow access to their domestic markets.
Looks like 'First Eastcoast' then........
David Haggas, Skipton
Stephen Hammond: "When these companies are developing their proposals they should be looking at ways to innovate and grow the service" Innovate and grow? He must have been away somewhere in the past few years. Leave it as it is man.
MikeB, Liverpool
I am surprised that the Stephen Hammond even considered including Keolis/Eurostar in the shortlist, as I was under the distinct impression that the idea was to hand the franchise back to the private sector. Keolis is a subsidiary of SNCF (French state-owned railways) and Eurostar is part-owned by the DfT and other European governments - so why the sudden change of heart? Perhaps there is a thought in Tory circles that our railways can be run by anyone - including foreign state-owned companies - as long they are there is no involvement by the British taxpayer!
Melvyn Windebank, Canvey Island, Essex
Its a bit ironic given the jinx ECML has had since privatisation that the most successful operator DOR is precluded from tendering and yet foreign state owned railways are allowed to !
I also notice that Eurostar is linked to one of the final bidders and yes the government want to sell their shares as well no doubt ending up within SNCF ?!,
I write this on a day that FCC suffer major problems allied to flooding on the MML around Luton which begs the question as to whether the closed Hitchin to Bedford line should be reopened creating a link between ECML and MML which might even be useful for Eaśt -West rail until a long term more direct route to Cambridge becomes available ?
If the Eurostar group is appointed then why not look at a link.from HS1 to ECML allowing direct services long before HS2 is built and removal of Welwyn bottleneck which needs to be fixed if ECML is to reach its full potential alongside Thameslink services.
Adam Warr, Peterborough
The current success of East Coast must be a huge embarrasment for the government, who have set their stall behind the franchise system, despite it being proved to be "deeply inefficient", to quote John Major.
Hopefully, the high profile that East Coast have created in the media and with the travelling public may force the Dft to see sense and quietly move other troublesome franchises over to DOR operation, rather than waste more money.
Tim, Devon
They should have split the company into two and then operated the whole of the ECML as an open access route. The franchise system has stifled innovation and competition
Chris, Longstock
The present operators seem to be doing a good job, if they were allowed to continue with the new rolling stock and track upgrades planned - who knows?