Four shortlisted for South Central franchise
Financial Times: August 20 2008 09:00
By Amanda Vermeulen
The shortlist of bidders for the new South Central rail franchise was announced on Wednesday by the Department for Transport and includes the incumbent, GoVia, National Express; Stagecoach; and NedRailways, which is wholly owned by the Dutch Railways.
Each of the four companies has established subsidiary operating entities to tender for the franchise, which will be awarded in early summer in 2009, and start operating from 20 September the same year.
The successful bidder will be asked to place a £30m performance bond and a £25m season ticket bond with DfT.
The DfT said the value of the franchise to the winner was not yet in the public domain as this was part of the commercial negotiations with the shortlisted bidders.
The contract will expire in July 2015, but the final year of the franchise hinges on the successful bidder achieving acceptable performance levels. DfT may prolong the contract by an additional two years after 2015.
The length of the South Central franchise was deliberately kept short to allow DfT to dovetail it with the Thameslink programme. Franchises typically run for seven to 10 years.
The brevity of this contract is thought to have deterred some of the usual bidders from tendering, including Deutsche Bahn, which earlier this year had been widely expected to add its name to the list of interested parties.
In January Deutsche Bahn bought Chiltern Railways, which runs trains from London Marylebone to Aylesbury, Warwick and Birmingham under a 20-year franchise.
DfT plans to increase capacity on the South Central service by about 10 per cent over and above the additional passenger numbers that will be incorporated into the current Southern franchise.
The Southern franchise routes include trains between London and the south east coast, via London, Surrey, East and West Sussex, and from London to parts of Kent and Hampshire. From June, it incorporated the Gatwick Express.
Last year, GoVia, a joint-venture between Go-Ahead and Keolis of France, carried more than 120 million passengers on its Southern fleet of 300 trains. It also operates the Southeastern and London Midland franchises.
Keith Ludeman, Go-Ahead’s chief executive, told the FT earlier this summer that he was confident Govia had a good chance of retaining the franchise.
The successful bidder in the current franchise round must help DfT with its plans to extend the East London Line and play a role in the £5.5bn Thameslink programme. Both are expected to increase the capacity of rail services into and through London quite significantly, according to DfT.
Other proposals include introducing smartcards; later running services; improved reliability and better environmental performance.
Tom Harris, rail minister, said DfT wanted passengers in the franchise area to enjoy a number of improvements, such as longer trains, safer stations and later running services.
”It’s also vital that the winner facilitates the delivery of major projects that will substantially increase capacity on some of the busiest parts of the rail network.”