16.07.12
InterCity bidding ‘down to two competitors’
FirstGroup and Virgin have emerged as the top two bidders for the InterCity West Coast franchise, according to reports today.
The two other companies shortlisted for the contract – a joint venture between Keolis and SNCF, and Abellio – are no longer considered likely contenders, the Guardian newspaper has reported.
The new franchise will run for 14 years, and the DfT is understood to be seeking more robust insurance policies from bidders, to avoid companies reneging on the franchise. This could include a large ‘performance bond’, to be paid if there is a default.
The SNCF bid is rumoured to have considered using extended Pendolino trains that are longer than station platforms, with selective opening necessary, but it is not known whether this influenced the decision to favour other bidders.
FirstGroup is expected to offer a slightly higher premium to operate the service, while Virgin has been speculated to emphasise passenger growth and service.
Last year, FirstGroup announced it was handing back its Great Western franchise three years ahead of schedule. However this will not influence the operator’s chances, as an early exit clause was written into the contract, allowing FirstGroup to leave without any legal repercussions.
The winner of the franchise is expected to be announced next month.
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