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2002-07-22 STG-001
Stagecoach Group

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Stagecoach Group welcomes Virgin Rail deal


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CrossCountry
franchises
franchising
South West Trains
SRA



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Stagecoach Group

Stagecoach Group welcomes Virgin Rail deal
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date
22 July 2002
source Stagecoach Group
type Press release



Stagecoach Group today welcomed an agreement between Virgin Rail Group and the Strategic Rail Authority on both West Coast Main Line and Cross Country franchises.

The new agreement stabilises both franchises whilst issues relating to West Coast route modernisation are resolved. The agreement also provides a process for renegotiating long term franchise agreements from the next financial year.

In the meantime, the SRA has committed to provide short term financial support for the benefit of passengers, to protect both franchises and enable the introduction of new train fleets to continue to schedule.

Brian Souter, of Stagecoach Group, said the agreement benefited passengers, taxpayers and shareholders.

“I am delighted that the SRA has acted to ensure that passengers do not suffer unduly and that both franchises continue to operate. This agreement ensures that the new rolling stock, the most exciting new trains in the country, will make Virgin Trains the flagship for Britain’s railways.”

Details of the franchise negotiations include:

o Both WCML and XC to be run under SRA support until March 2003.
o WCML franchise to be renegotiated with Virgin Rail Group from March 2003. If no agreement, VRG will run the franchise under a management contract for a 2% fee of revenue until an agreement is reached.
o XC franchise to be renegotiated with Virgin Rail Group from March 2004. If no agreement, VRG will run the franchise under a management contract for a 1% fee of revenue until an agreement is reached, or alternatively the SRA may put the franchise out to other bidders.
o Once both franchises are renegotiated, they will operate on the basis of a normal railway franchise risk with an appropriate rate of return.

In the meantime, Virgin Trains will continue to introduce its new train fleets, with Virgin Voyagers replacing the entire Cross Country fleet by the end of the year.

On West Coast Main Line, Virgin’s new Pendolino trains will carry first passengers tomorrow (July 23), and will be gradually introduced as Network Rail continues to upgrade the route.

Notes to editors:

Virgin Rail Group is a joint venture between the Virgin group of companies (51%) and Stagecoach Group plc (49%).

In 1997 Virgin Rail Group was awarded the West Coast Main Line franchise and the Cross Country franchise until 2012.

Virgin Rail has placed orders to replace its entire train fleet within the next 18 months; 78 Bombardier Voyagers worth £1 billion for Cross Country, which are now going into service, and 53 Alstom Pendolinos worth £1.2 billion for West Coast Main Line, which are under test and in build.


Railhub Archive ::: 2002-07-22 STG-001





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