04.11.16
Franchise combines WCML services with HS2 in ‘seamless integration’
A major new franchise will combine existing InterCity West Coast (ICWC) services, currently run by Virgin Trains, with the development and introduction of HS2 services, the DfT has announced today – settling doubts about whether the line would be run by an open access operator.
The new West Coast Partnership (WCP) franchise will see a private operator running services on both the West Coast Main Line (WCML) from 1 April 2019 and designing and running the first high-speed services from 2026. As such, they must demonstrate experience of delivering both conventional and high-speed services and of using cutting-edge technology.
According to the government, the combined franchise, which will run for the first three to five years of HS2’s operation, is “the first step in attracting a world-class bidding group” to enhance WCML services while simultaneously paving the way for HS2.
In an announcement speech today, transport minister Paul Maynard said: “We are embarking on a new chapter in the modernisation of our railways.
“A strong private sector partner is vital now to work with government and as an advocate for passengers on the West Coast, to ensure excellent passenger services in the run up to HS2 introduction, and a smooth transition to the next generation of rail franchising as HS2 becomes the new backbone of Britain’s railways.”
Maynard also clarified that because this is a new type of franchise, it will require “a new kind of approach to bidding” – such as the requirement that the winning bidding group has “transformational expertise across all rail operational and customer service disciplines”.
Namely, the chosen operator will need to build on existing West Coast long-distance, inter-city and cross-border services between England, Scotland and Wales; demonstrate how they will boost punctuality and reliability; and transform passenger satisfaction around fares and ticketing.
Explaining the reasoning behind the combined franchise model, Maynard argued that there are “a number of key interfaces between the delivery of HS2 and the ICWC rail franchise”, with “significant benefits” in bringing the two projects closer together.
These include the fact that West Coast passengers will benefit from new technology before high-speed services are rolled out, and that an experienced operator will be in place at an early stage “to shape service design based on knowledge of the markets and passenger needs”.
“By combining the franchise we are ensuring we get the right people on board at an early stage to design and manage the running of both services in the transition stage,” said the rail minister. “The new franchise will attract highly experienced companies, who have the right experience, which ultimately means a better deal for passengers - both now and in the future.”
Paul Plummer, chief executive of the Rail Delivery Group, added that today’s decision will be crucial to allowing the industry to “seamlessly integrate” HS2 with the existing network.
“It also signals a smooth transition when the new line opens in 2026,” he said. “HS2 will become a very important part of Britain’s railway for decades to come, and will play a huge part in managing the capacity challenge that we face.”
The partner will be expected to work collaboratively with HS2 Ltd to design, launch and operator the high-speed services while managing the timetable recast of the WCML.
Patrick McCall, co-chairman of Virgin Trains, which currently runs the ICWC franchise, argued that there are “clearly huge advantages” in having continuity of service during HS2's critical enabling works, “both up to the start of the new franchise in 2019 and beyond”.
As expected, the successful bidders, or group of bidders, will need to work closely with the DfT, HS2 Ltd, local transport authorities, Transport Scotland and the Welsh government.
Today’s announcement precedes the expression of interest (EoI) for the partnership, which is due to be published in December. The invitation to tender (ITT) is expected to come in October or November next year.
HS2 shadow operations
Expanding on the fine print, the DfT revealed that the specification for the ‘shadow operator’ element of the combined franchise will be developed in greater detail in the upcoming EoI and ITT.
But it is already expected to include activities such as identifying the markets across the West Coast corridor (both high-speed and conventional services) and developing products and passenger propositions accordingly.
It will also mean the chosen bidder will be able to engage with the HS2 design and build programme, ensuring the operator’s and the passengers’ requirements are fully considered.
The company will also work alongside Network Rail and HS2 Ltd to develop an organisational model for HS2 services, which the DfT hopes will more closely align the incentives between infrastructure management and service operation. This could also pave the way for the future establishment of an integrated railway, the department revealed.
Sir David Higgins, chairman of HS2 Ltd, commented: “This is a real opportunity to ensure HS2 services complement and enhance existing ones. I have always been clear HS2 will not be a standalone railway but fully integrated with the wider network.
“It will provide a new backbone for our railways, modernising services to better serve towns and cities up and down the country. Bringing on board a new partner to work with HS2 Ltd now will help ensure we are working towards the same goal.”
The operator is expected to be innovative and exploit emerging technologies – first tested on the ICWC services and later rolled out on HS2 – capable of delivering “a step change” in passenger experience, as well as lead on consultations and developing service patterns for the period after HS2 kicks off.
Ultimately, the chosen bidder will play a major role in defining the early years of the high-speed line, which is still expected to receive Royal Assent in Parliament. This includes testing and accepting rolling stock; recruiting staff; obtaining regulatory approvals and contracts for operations; testing infrastructure to support the route; and then phasing the introduction and testing of high-speed services.
Structure of franchise
It is currently expected that the ICWC services will be operated until HS2 starts on a partial revenue risk basis. When HS2 services start, the DfT anticipates that the franchise operator would provide integrated ICWC and HS2 services for a further period of around four years on an incentivised management contract basis.
“It is recognised that the role of the ‘shadow operator’ will evolve over time and, as such, flexibility will be built in to the contract to manage this,” the department said. “This is likely to involve some form of review mechanism to enable refinement of the role over time.”
The franchise EoI for the partnership franchise will also contain several mandatory further technical questions, such as the participants’ ability to drive innovation, deliver the shadow operator role and plan, design, develop, operate and mobilise high-speed services in excess of 250km/h.
“Due to the unique nature of the West Coast Partnership proposition the department anticipates that bid vehicles will need to draw upon a wider range of participants and skills than would usually be the case in a rail franchise competition,” the DfT said.
“Participants are encouraged to form bid vehicles in a manner which will enable them to deliver as strongly as possible all the constituent elements of the West Coast Partnership franchise.”
(Top image c. HS2 Ltd)