Shadow Strategic Rail Authority

Building a better railway: £1.5 billion investment for new South Central franchise
_______________________________________________________________

date 24 October 2000
source Shadow Strategic Rail Authority
type Press release

The Shadow Strategic Rail Authority (sSRA) has signed heads of terms with GoVia as the preferred counterparty for the new replacement South Central franchise.

GoVia, (current operators of Thameslink) plan to brand the services, which run to South London, Gatwick Airport, Brighton and the South Coast, as the 'New Southern Railway'. Subject to satisfactory fulfilment of the undertakings to the SRA throughout the life of the franchise, GoVia will run the business for 20 years. Over this period, it will be expected to implement an investment programme valued at up to £1.5 billion to introduce new trains and upgrade track and stations in order to raise standards, improve train service performance and provide additional capacity.

A new Franchise Agreement will be signed with GoVia once detailed negotiations and funding plans have been developed and terms have been agreed between them and Connex Transport UK Limited, the current operator, for the early transfer of the existing South Central franchise.

Safety

The proposal includes funding for train protection systems, the details of which are to be determined following recommendations from the current inquiries. The entire stock of Mark 1 'slam door' vehicles to be replaced by 2004 at the latest.

GoVia have undertaken to support all forthcoming industry safety initiatives. It will comply with all relevant recommendations of the current inquiries.

The company have undertaken to ensure that all new trains in service after December 2003 will be fitted with Train Protection Warning System (TPWS) and provision be made for European Rail Traffic Management System (ERTMS). They plan to invest £1.2 million per year on the training and development of staff including, for train drivers, the use of simulators and other forms of improved training procedures.

Early Benefits

The heads of terms envisage a set of agreements next year which will provide users of the South Central network with the following benefits. (Expected delivery dates are provided in brackets).


* Introduction of new rolling stock. 396 vehicles to be delivered by 2002,
and a further 334 by 2004. Additional trains to be brought into service each
year throughout the duration of the franchise to meet expected demand,
totalling 1000 new vehicles.
* Upgrading of infrastructure to provide greater capacity on the Brighton
Main Line (2006) and the Arun Valley Line (2004).
* Enhancement of the South London Metro (suburban services) including high
frequency, all day service with generally higher frequencies from early
morning to late evening, earlier first trains, later last trains, and longer
trains on some routes (2001 delivery).
* Electrification of the lines between Ashford and Hastings, and between
Uckfield and Hurst Green, providing through electric trains between London
and Uckfield (2004).
* Improvements in operational performance - GoVia to commit to a target of
nine out of ten trains arriving within 5 minutes of scheduled time (2005),
rising to 15 out of 16 trains (2010).
* Refurbishment of entire power-door rolling stock (early 2002 to late 2005)
* Opening of new station at Eastfields in the London Borough of Merton (2004)
* Passenger's Charter improvements include compensation for delays and missed
connections, more customer focused compensation arrangements and a
commitment to improve information and customer service (2001).
* Upgrading of infrastructure facilities to allow faster trains to overtake
slower stopping services on the South Coastway (2004).
* A 'Stakeholder Board' to be introduced to give passengers a voice in the
development of the franchise. (2001)
* Station improvements - £200 million to be invested in depots and stations,
across the duration of the franchise. 37 stations to be developed as
community and retail centres, improved access for disabled passengers,
provision of new car parking spaces. Fixed price taxi initiative
(pre-bookable taxi at standard rate per mile, to meet passengers at any
station). Rail/bus integration, working with local authorities on quality
partnerships. Introduction of CCTV and passenger help points across the
network.

Aspirations

GoVia have undertaken to carry out a feasibility study into the reopening of the Wealden Line between Uckfield and Lewes. GoVia have also undertaken to carry out further studies into the potential doubling of track on the Uckfield Line and between Ashford and Hastings.

Further work is expected with local authorities to develop additional new station opportunities and new infrastructure opportunities.

Infrastructure Joint Venture

GoVia are proposing an alternative means of delivering infrastructure and station enhancements. Their proposal is to deliver the enhancements through a partnership with Railtrack and others, which should help to mitigate the risks involved in carrying out significant enhancement works on the railway network. Railtrack will remain responsible for the operation and safety of the network.


Chief Executive of the sSRA and Franchising Director, Mike Grant, said:

'The new replacement franchise, the second to be negotiated to heads of terms
by the sSRA, reinforces the higher standards that we are looking to establish
throughout the industry. GoVia are committing to provide strong and sustained
improvements in the standards of South Central services.

'The sSRA has run a demanding competition with two quality proposals, both
offering substantial improvements over current standards, but with a clear
winner. GoVia have demonstrated that they have both the vision to bring about
a step change in quality and the capacity to deliver it. I am now challenging
them to actually deliver for the passengers against a background of long-term
stability which will enable them both to invest now to raise standards and to
plan to meet future growth in demand.'

'Safety is paramount. We will be monitoring the outcome of the current
inquiries closely and GoVia have undertaken to implement the relevant
conclusions as part of today's deal'.

Chairman of the sSRA, Sir Alastair Morton, said:

'The replacement of the crucial South Central franchise is a significant
piece of the jigsaw creating a 21st Century railway service in Britain within
the confines of our heritage system.

'As we at the sSRA prepare to drop our 'shadow' status, the hard work
continues to deliver new improved franchises as soon as possible.

' Where appropriate, franchises will change shape and / or change hands.
We are getting, and expect to continue to get, the co-operation of all parties
to that process. Competition is delivering improvements proposed by bidders.'

Notes to Editors

1. The expertise of the GoVia management team, supported by SNCF's resources and experience, are considered by the Franchising Director to be crucial to the delivery of the step changes he required. GoVia and SNCF have entered into an agreement to provide the technical and operational expertise needed to deliver the benefits outlined above.


2. The investment planned by GoVia in the new franchise can be broken down as follows:

Rolling Stock £900million
Infrastructure £325million
Stations £200million
Depots £50million

3. Final subsidies/premia have not been set at this stage. Details will be announced at the time of awarding the franchise.

4. A map indicating the routes covered by the franchise is attached.




Important Notice

This news release is issued by the Franchising Director and its contents have
been approved for the purposes of section 57 of the Financial Services Act
1986 by KPMG Corporate Finance.

KPMG Corporate Finance is a division of KPMG which is authorised to carry on
investment business by the Institute of Chartered Accountants in England and
Wales. This news release has been prepared for general information purposes
only and is not intended to form the basis of any investment decision or
constitute an offer or invitation to bid for any passenger rail franchise or
to acquire shares in a train operating company. Neither this news release nor
any copy of it should be taken into or distributed in Canada, France, Japan
or the United States except in accordance with an applicable exemption. The
distribution of this news release in other jurisdictions may be restricted by
law and therefore persons into whose possession this news release comes
should inform themselves about and observe any such restrictions.

KPMG Corporate Finance is acting for the Franchising Director and will not
regard any other person as its client in relation to passenger railway
franchising or be responsible to anyone other than the Franchising Director
for providing the protections afforded to clients of KPMG Corporate Finance
nor for advising any other person on the contents of this news release or any
matter referred to in it.


Media Enquiries: SSRA Press Office 020 7654 6387/6339/6234/6294

Railhub Archive ::: 2000-10-24 SRA-001