Shadow Strategic Rail Authority

New entrants qualify for second franchise replacement round
_______________________________________________________________

date 19 April 2000
source Shadow Strategic Rail Authority
type Press release

The SSRA has qualified eleven companies to participate in replacement discussions for the South West Trains, Central Trains, and the proposed Trans - Pennine Express, passenger rail franchises. In each case the incumbent operator is included.

Three parties - Nederlandse Spoorwegen (Dutch national railways), Serco, and Group 4 are new to UK rail franchising.

The companies listed below applied to the SSRA in response to the latter's invitation on 8 March. They are now to put together proposals for replacement of the franchises for which they have pre qualified.

The companies selected to go forward are:-
South West Trains: Stagecoach
(incumbent)
Connex Rail (franchisee of South Eastern and South Central)
First Group (franchisee of Great Eastern, North
Western, Great Western)
GNER Holdings Limited (subsidiary of Sea Containers and franchisee of GNER)
Nederlandse Spoorwegen
Group 4
Central Trains: National Express (incumbent)
Group 4
In the case of the Central franchise, any detailed proposals from Group 4 will have to be competitive with those from National Express Group (NEG), the incumbent. If not, the Franchising Director has various options, including continuing the incumbent's existing franchise for the remaining 3 years 11 months, or, if better value can be demonstrated, negotiating a longer term franchise with NEG. Trans Pennine Express
Arriva (owner of Northern Spirit, which operates services
likely to be included in this franchise)
Connex Rail
First Group
GNER Holdings
Limited
National Express
Virgin Rail
Serco
Via GTI
Group 4

The selected companies are given 60 days in which to prepare detailed proposals for consideration by the SSRA, whereupon a shortlist of counterparties will be invited to proceed further in the replacement process. It is expected that replacement franchises will be offered later this year.
Announcing this latest stage in franchise replacement Mike Grant, Franchising Director and Chief Executive of the SSRA said: " I am greatly encouraged by the number and quality of the companies seeking to participate in this, the second round of franchise replacement negotiations - some of whom are new to rail franchising. The fact that we are inviting modifications to the franchise maps should generate a number of innovative proposals, the financial and practical viability of which we will need to explore in detail with the parties.

" We are looking for proposals which best meet our expectations for improvements for passengers through ambitious service quality and investment programmes. For the Central franchise, if Group 4 does not come up to scratch, the National Express Group will have the task of persuading us that its proposed development of the franchise merits the longer term. We will set them a tough exam !".

Notes to Editors
1. The Franchising Director can exercise his right to allow the existing franchises to run their course and re-tender in 2004 instead should acceptable replacement terms not be agreed.

2. On 8 March, the SSRA announced details of the franchise propositions on which the second round of franchise replacement negotiations would be based:
Replacement of the existing South West Trains franchise, with the option to include or exclude services between Waterloo and Salisbury / Exeter.
Replacement of the Central Trains franchise, with an option to include or exclude services which extend north west and west of Shrewsbury, including those that extend into Birmingham. Proposals should also provide, within the franchise, for the creation of a separate business unit focused on serving the West Midlands travel-to-work area.

Creation of a new Trans-Pennine Express franchise comprising the interurban, fast services currently operated by Northern Spirit Limited.

3. A fourth area, Wales and the borders, is under discussion but requires further study before the nature of the proposed franchise is announced.

4. The objective of the current programme of negotiations is to replace most of the shorter franchises (expiring by 2004) within two years.

5. A third batch of franchise negotiations is expected to follow in the summer, drawing further on the responses received to the Franchising Director's earlier invitation for strategic proposals from the industry.

6. The shortlist for the first group of replacement franchises - GNER, Chiltern, and Connex South Central - was confirmed by the Franchising Director on 14 March

7. Parties that are not currently operating rail franchises - Dutch Railways, Serco, Group 4, would be required to acquire the necessary operating and safety licences before they could operate a new franchise.

Railhub Archive ::: 2000-04-19 SRA-001