FirstGroup consortium wins UK’s South-West rail franchise

Listen to this article

00:00
00:00

The UK rail franchise that has been operated longest by the same train operator is to change hands after Stagecoach Group lost the competition to run the South-Western rail franchise to a consortium of FirstGroup and Hong Kong’s MTR.

Stagecoach became the first company to take over a UK rail franchise at privatisation when it started operating the south-western franchise under the South-West Trains brand in February 1996 and it has run the franchise ever since. The new operator will take over the franchise in August this year.

The award is a significant fillip to FirstGroup, which also operates the Great Western franchise to Wales and the west of England, Trans Pennine Express and Hull Trains. First will pay premiums with a net present value of £2.6bn over seven years for the right to run the service.

The new operator will be obliged to introduce 90 brand-new trains by 2020 on suburban services around south-west London and running to Windsor and Reading.

The trains will replace rolling stock dating back to as long ago as the 1980s. FirstGroup said it was in “advanced discussions” with a number of manufacturers about a potential order for the trains. The trains will add to an order of 30 new five-car trains from Germany’s Siemens currently coming into service on the route.

Stagecoach, which had been the only other bidder shortlisted to run the franchise, said it was “disappointed” its bid had been unsuccessful.

“We are proud to have operated the network under the South West Trains brand for more than 20 years and we are disappointed that we have been unsuccessful in our bid for the new franchise,” Martin Griffiths, chief executive, said.

Tim O’Toole, FirstGroup’s chief executive, said the company was “delighted” the joint venture with MTR had been selected to run the franchise.

“Our successful bid will deliver the tangible improvements that customers and stakeholders have told us they want from this franchise,” he said.

The Department for Transport said the new operator and Network Rail, the infrastructure owner, would cooperate closely on the new franchise, under plans set out by the secretary of state in December to change how rail franchises work.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.