Latest Rail News

18.01.17

Abellio sells 40% of Greater Anglia to Mitsui

Train operator Abellio UK has agreed to sell 40% of its Greater Anglia rail franchise to the Japanese firm Mitsui, opening the way for further foreign rail franchise investment.

Abellio has been running the Greater Anglia since 2012 and was awarded the franchise for another nine years last August, but will still retain majority control under the terms of the agreement.

The deal will mark the first time that a Japanese company has become a shareholder in a UK train operating company, with Abellio hoping that the deal will help deliver its promised £1.4bn investment into local rail services.

“We are delighted to have reached agreement with Mitsui, fulfilling our long-standing objective of running the franchise as a 60:40 joint venture,” said Abellio’s managing director Dominic Booth.

“With the introduction of Mitsui’s knowledge and experience, we look forward to delivering significant improvements for Greater Anglia’s customers, including through the introduction of a brand new fleet.”

The exact value of the transaction has not yet been revealed by either party as the deal is currently pending final approval from the DfT. Mitsui have yet to comment on the deal.

A DfT spokesperson called the sale a “commercial decision for Abellio” and said the government will only approve it “once both parties have satisfied us that passengers will benefit from it”.

Abellio’s sale of Greater Anglia follows on from National Express’ decision last week to sell 100% of its c2c franchise to the Italian rail operator Trenitalia.

The rail union RMT said that the sale marked a worrying trend for the British rail network, as it warned that operators selling their stakes in a franchise midway through a contract was “making a mockery” of the DfT’s franchising process.

RMT’s general secretary Mick Cash said: “The checks and balances for both passengers and the taxpayer, which the DfT claims are enshrined in its multi-million pound franchising programme, are clearly lacking when the winning bidder can simply walk away, share out its responsibilities and choose its replacement whenever it sees fit.”

This may yet be the start of further Mitsui involvement in the UK rail network. Last April Abellio and Mitsui submitted a joint bid to run the West Midlands franchise with the DfT’s decision on who will win the tender expected this June.

(Image c. The Photo Xchange)

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Comments

Andrew Gwilt   18/01/2017 at 13:49

Do hope that the new Japanese firm can improve our network with less delays and hopefully bring in brand new rolling stocks including Stadler Flirt EDMU and Bombardier Aventra EMU trains to replace the older rolling stocks including Class 90's Intercity Mk3's, Class 321's, Class 317's, Class 153's, Class 156's, Class 170's, Class 360's and Class 379's.

Andrew Gwilt   18/01/2017 at 13:58

Was thinking what will happen to the other GA trains including Class 170's, Class 360's and Class 379's will be cascading to. GA Class 360's could be cascaded to Cardiff/South Wales for suburban services in the Cardiff area or cascaded to Northern England (Transpennine Express or Northern Trains). Or cascaded to Heathrow Express to work alongside Class 332's and the other Class 360's including operating a shuttle service between Heathrow T2/3-Heathrow T5 as Heathrow Connect is to become MTR Crossrail Elizabeth Line from late 2018. GA Class 170's could be cascaded to Scotland or WestCountry or parts of the Midlands. GA Class 379's could be cascaded to Great Northern to work alongside Class 387's on KX-Cambridge and Peterborough services.

Mikeyb   18/01/2017 at 20:25

Andrew. I think that Mitsui have joined up with Abellio purely for financial reasons. Indeed they will be putting some investment into the franchise against which they will expect a decent return in due course. With regard to the operational side of things, they will leave everything to Abellio as at present.

Andrew Gwilt   19/01/2017 at 02:02

Sounds good.

Andrew Gwilt   20/01/2017 at 11:40

I do know that Greater Anglia are ordering 111 new Bombardier Aventra EMU rolling stocks and 89 Stadler Flirt EMU/EDMU (Bi-Mode) rolling stocks. Which are to replace the Class 90 Intercity Mk3's, Class 321's, Class 317's, Class 360's, Class 379's, Class 170's, Class 153's and Class 156's which are currently operated on West Anglia, Great Eastern, Regional and Intercity London-Norwich routes.

Helmsman   20/01/2017 at 14:47

This case - and the previous sale of c2c by NEG - shows lack of commitment by the selling groups. It would be interesting to know how much the CEOs made on both deals but I suppose that information is covered by the usual 'commercial confidentialty' clauses. The original franchising agreements were between the DfT and National Express, and the DfT and Abellio. Neither Trenitalia nor Mitsui were contracting parties. Yes, it does make a mockery of the franchising process. It can't be right that franchisees can just wriggle out of their responsibilities - after only recently assuming them - in such a cavalier fashion, and without suffering consequences. The decisions show contempt for the DfT, rail staff and the travelling public.

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