Published: 25th May 2014
The Department for Transport (DfT) has announced the first long-term rail franchise award since the hiatus two years ago over the proposed West Coast Main Line (WCML) award to First Group. This was overturned by the threat of a Judicial Review instigated by Virgin and Stagecoach, the incumbent WCML franchise operator partners.
The DfT intends to award the new Thameslink, Southern and Great Northern (TSGN) franchise to Govia Thameslink Railway Limited. This company currently operates the Gatwick Express, London Midland, Southern and Southeastern franchises.
Govia, the owning group, is 65% owned by Go-Ahead and 35% by Keolis who is a French-based operator of passenger transport services majority owned by the French national railway, SNCF.
So despite the ongoing staffing troubles at London Midland which have seen the DfT order passenger compensation to be paid, Govia has won another franchise. It is also understood that they had been in tentative discussions with the DfT over the handing back the London Midland franchise before announcing the redundancies to help offset unbudgeted Class 350 train maintenance costs.
The TSGN is the largest UK rail franchise when measured in passenger numbers, trains operated, revenue levels and staff employed. Currently the activities employ around 6500 staff who provide services carrying around 273m passengers annually who pay £1•3billion a year for their tickets.
The incoming management team will have to work with Network Rail over the next four years as the Thameslink project is completed. While the major upgrade is underway, then will be introducing new fleets of trains already ordered. These will deliver more services with more seats to more places at higher speeds.
Govia Thameslink Railway Limited is the name of the new company who will run the services for a seven year period starting on September 14. From 2018 direct services will operate through London linking Brighton and Gatwick Airport in the south to King’s Lynn, Peterborough, Cambridge and Bedford in East Anglia and the south midlands. They will also operate the suburban service between Hertfordshire, to and from Moorgate.
To do this, they will need to learn how to operate almost 1400 new carriages including the Class 700 EMU built by Siemens, which will offer 50% more capacity and 10,000 extra seats every weekday morning into central London by the end of 2018.
Govia has pledged to invest £50 million improving 239 stations and increase staffing, introduce a simplified ticketing structure and meet tough new punctuality targets reducing delays by around a fifth and to improve cleanliness.
Rail Minister Stephen Hammond said:
A world class railway is a vital part of our long-term economic plan. New state-of-the-art trains, more seats, better connections and improved stations will transform travel across London and the south east. That’s great news for businesses and the hundreds of thousands of passengers who use these vital services every day.
When the infrastructure upgrade is complete, 24 trains an hour will be able to travel in each direction on the core London route between Blackfriars and St Pancras. The new tunnels have been built that will create the link just outside Kings Cross with the sub-surface tunnels under St. Pancras and the route to the south coast.
Govia will procure a new fleet of 108 carriages for the Gatwick Express services, replacing the former Wessex Electric Class 442 trains introduced 25 years ago and refurbished at Wolverton five years ago. The company will also secure 150 new carriages to replace the 40-year-old Class 313 trains currently operating on the route between Moorgate, north London and Hertfordshire. These have all also been overhauled at Wolverton Works.
So the total number of carriages used will increase to 2,631 by 2019 – an increase of 27% and enable a cascade of stock to be used on other lines being electrified over the next few years.
Govia will make what is called a significant investment improving stations fitting free wi-fi at 104 stations and offer better retail and catering facilities and improvements to customer information systems. Staffing hours will also be extended and over 100 of the largest stations will be staffed while trains are running. This is complete reversal of staffing policy at Govia operated stations on their London Midland franchise.
They will also meet tough contractual obligations with the DfT delivering cleaner and more spacious trains and improve passenger satisfaction. Tough new benchmarks for performance, train and station cleanliness and customer service information have also been agreed. This includes a better website, smartphone and tablet apps making door-to-door travel easier for passengers including planning journeys, buying tickets and booking onward taxis.
The new TSGN franchise replaces the existing Thameslink and Great Northern franchise operated by First Capital Connect (from 14 September 2014) and will subsume the South Central franchise (operated as Southern and Gatwick Express) on its expiry on 26 July 2015. In addition, a small number of services and stations will also transfer from the South Eastern franchise by 21 December 2014. But the Thameslink brand will be re-introduced while the Southern and Gatwick Express brands will be retained.
This franchise award is what is known as a mManagement contract reflecting, the DfT says, the risk involve3d with the final four years of engineering disruption because of the £5.6billion Thameslink project. There is also always a performance risk when a new fleet of trains is introduced as staff training and new maintenance procedures have to be carried out. Ticket receits will pass direct to the government and will not go to the franhisee and total revenue is estimated to reach £12•4billion over the seven year award.
The DfT will pay Govia an estimated £8•9billion to cover operating costs and a small profit and their expectations are that there will be an operating profit margin of 3% over the seven year deal which includes pension costs. Govia could earn more if they hit service quality targets such as punctuality, passenger satisfaction and revenue protection. For their part in the Thameslink upgrade as train operators, Govia could earn up to £25million.
The unsuccesful shortlisted bidders were Abellio, First Group, Govia, MTR and Stagecoach.