Slew of companies shortlisted for South East and West Coast rail franchises

A number of London-listed, privately held and foreign companies were celebrating early success in two rail franchise tenders on Thursday, as the Department for Transport published the shortlists for two busy routes.

The two franchises up for grabs included the Integrated Kent franchise, which covers suburban and regional services in London and the South East, currently operated by Govia under the ‘Southeastern’ brand.

Existing operator Govia - a 65-35 joint venture between FTSE 250 firm Go-Ahead and French passenger transport operator Keolis - was included on the shortlist.

In its release on Thursday, Go-Ahead talked up its success as the franchise operator since 2006, claiming to have grown passenger numbers by 40% along with the addition of 500 more weekday services.

“In 2009 Southeastern introduced the UK's first domestic high speed service, significantly reducing journey times to London and supporting the economic regeneration of the region,” the board said.

“The company also played a key role in the success of the 2012 London Olympic and Paralympic Games' transport plan, carrying 20% more passengers than usual.”

Since the start of the franchise, Go-Ahead said £120m of partnership funding had been invested in station improvements and Govia had introduced “a range” of other passenger service improvements such as 24-hour customer service and social media updates, smartcard ticketing, and, since 2014, an additional 300 customer-facing employees.

Also on the shortlist was fellow FTSE 250 operator Stagecoach, which was hoping to pick up a new London suburban franchise having recently lost its long-term South West Trains operation to FirstGroup.

Among the other shortlisted bidders were a new company, South Eastern Railways, which is a joint venture between Abellio - a division of Dutch state railway Nederlandse Spoorwegen - and the Tokyo-listed East Japan Railway Company and Japanese keiretsu Mitsui.

Italian state railway Trenitalia was also on the shortlist, having entered the UK market earlier this year with its acquisition of c2c from National Express, which operates the Essex Thameside franchise out of Fenchurch Street Station.

The other franchise was the new West Coast Partnership, which combines the existing InterCity West Coast franchise operated by Virgin Trains with the operation of HS2.

Because of the inclusion of HS2, the Department for Transport required bidders to have experience in operating high speed services.

Among the London-listed firms on the shortlist were FirstGroup through its First Trenitalia West Coast Rail partnership with the Italian state operator, which was drafted in to bring the required high speed expertise.

“We have a strong track record in delivering continued modernisation and investment, alongside industry partners, through our rail operating companies Great Western Railway, TransPennine Express and Rail Operator of the Year, Hull Trains,” said First Rail managing director Steve Montgomery.

“In August, we will begin operating the South Western rail franchise where we will deliver £1.2bn of investment and improve the experience for customers, with better trains, more seats and quicker journeys.”

Montgomery said FirstGroup’s partner Trenitalia was “one of Europe’s top railway operators”, managing long haul services, both on high speed and conventional lines, as well as regional and metropolitan services.

“That complements our expertise in running long distance services such as those found on the West Coast routes.”

Stagecoach was also on the West Coast shortlist, teaming up with its existing Virgin Trains joint venture partner Virgin Group, as well as French state operator SNCF in a bid to ensure high speed experience.

“We are pleased that the extensive expertise and strong track-record of Stagecoach and our partners has been recognised in the shortlists announced by the government for these two rail franchises, both of which are critical to the country's economy,” said Stagecoach chief executive Martin Griffiths.

“We look forward to working with local stakeholders on shaping our plans to improve services for customers and deliver significant value to the taxpayer to reinvest in public services.”

The third shortlisted bidder for the West Coast Partnership was named MTR West Coast Partnership, which was primarily a joint venture between Hong Kong metro operator MTR Corporation and Guangshen Railway Company, the operator of the high speed link between Guangzhou and Shenzhen in China.

A slew of subcontractors were also key to that bid, including Deloitte MCS, Panasonic Systems Europe, Snowfall AB, Trainline.com and WSP Parsons Brinkerhoff.

The winning bidder of the West Coast Rail Partnership will operate the existing 125mph high speed services from London Euston from April 2019, with the 250mph HS2 high speed services beginning in 2026.

According to the Department for Transport, the new South Eastern franchise would start in December 2018.