Stagecoach fails to secure direct award of South West Rail franchise
Stagecoach Group has confirmed that the Department for Transport has ended talks with its subsidiary, Stagecoach South Western Trains Ltd, on the direct award of the new South West rail franchise.
The current franchise is due to end in February 2017 and South West Trains had submitted proposals to the DfT as part of previously announced government plans for the direct award of a new franchise to at least April 2019.
However, Stagecoach says the DfT has now indicated that it plans to invite applicants to tender for a new long-term franchise to commence sometime in 2017.
Stagecoach has run South West Trains since British Rail was privatised in 1996 and was last awarded the contract in 2007 for 10 years. It is one of the UK’s biggest rail franchises, operating more than 1,600 trains a day and carrying 220 million passengers a year.
A DfT spokesperson told RTM: “We are committed to providing better journeys for passengers, and securing improved services through franchising is at the heart of that.
“In order to ensure the best deal for passengers and taxpayers, we are proceeding to a full competition for the South Western franchise, and negotiations for the direct award have been brought to an end. There is no impact on passenger services.”
But the DfT has indicated that it expects to exercise its pre-contracted option to extend the current South West Trains franchise beyond February 2017 until “no later than August 2017”.
A Stagecoach statement said: “Despite extensive negotiations, a significant difference has remained between both parties regarding the financial evaluation of the proposals. As a result, South West Trains has been unable to reach an agreement on a direct award.”
“We will continue to deliver on our commitments to government and customers, including the £50m package of investment agreed with the DfT earlier this year as part of a Deed of Amendment to the existing franchise.”
Stagecoach added that it still believes the company is in a strong position to submit a powerful and attractive bid for a new South West Trains franchise.
(Image: c. Alvey and Towers)
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