Shapps reveals 'new model'
FirstGroup wins west coast rail franchise, promises better service
FirstGroup also operates Great Western services
First Group has won the franchise to run the London to Glasgow West Coast rail service with Trenitalia UK.
The two companies will take over the service from 8 December from Virgin Trains, which is co-owned by Virgin and Stagecoach.
They promised investment in new trains, wi-fi and a simpler fare structure to improve the customer experience.
The deal comes months after the rail and bus group faced a shareholder revolt led by activist Wall Street hedge fund Coast Capital Management.
Coast called for the business to be split in two and to offload its rail operations.”
First Group chief executive Matthew Gregory said:” The Partnership strengthens and adds a fourth franchise to our UK rail portfolio. Following this award we will not therefore be seeking new franchising opportunities for the foreseeable future over and above our current negotiations with the DfT to extend GWR.
“Our focus remains on delivering sustainable shareholder value and we will actively manage our rail portfolio and its risk and reward profile accordingly.”
As an added protection to consumers and the taxpayer, the new Transport Secretary said the new partnership to run the franchise “represents a decisive shift towards a new model for rail.”
Under the new agreement there will be a forecast revenue mechanism to avoid a repeat of the issues that affected the East CoastMain Line.
The Department for Transport said: “This mechanism will be supported by a new annual review process, to ensure partnership working is effective, collaborative and continually improving.”
Mr Shapps said: “This award is positive news for passengers, with more services, more direct connections and ambitious plans for a cleaner, greener railway, and also represents a decisive shift towards a new model for rail.”
Referring to the review of the railways being conducted by former BA chief Keith Williams, he said: “It is a Partnership supported by Keith Williams, built with the flexibility to respond to his recommendations. Meeting Keith last week confirmed our shared determination to deliver a future that puts passengers – and punctual trains – at the heart of the railways.
“That is why I have asked Keith to produce a White Paper in the Autumn, with fearless recommendations that will deliver a railway system fit for the 21st century.”
A fleet of 56 Pendolino trains will be completely refurbished, incorporating 25,000 new seats and additional luggage space for passengers. Better and more reliable free Wi-Fi and at-seat power will be provided for all customers across the fleet, with wireless charging and onboard entertainment. Catering will be upgraded with at-seat service for all.
Clearer fares: The partners promise to introduce an easily understandable range of fares and fewer ticket types; easy and rapid refunds when things go wrong; and simpler fares with mobile tickets and smartcards for all fare types.
More services: By 2022 there will be more than 260 extra services each week, increasing seat miles by more than 10% compared with 2017/18. New direct services will be provided to destinations including Motherwell.
Better stations: The partners will invest in stations with refreshed waiting rooms, better customer facilities, more car park spaces, and greater accessibility for those who need it. There is a commitment to achieving an 80% reduction in non-recyclable waste from products sold or supplied on-board trains.
Mr Gregory added: “The West Coast Partnership includes operation of one of the most consistently successful intercity mainline franchises over the last twenty years. We are committed to delivering a range of improvements for InterCity West Coast passengers during the first phase of the partnership and our aim is to provide exceptional service as standard for our customers.
“In 2016, we and our partner Trenitalia committed to bidding for the West Coast Partnership as it is a unique opportunity to help shape and then run HS2. We look forward to playing our part in the success of the once-in-a-generation project to bring Britain’s largest cities closer together.
“The differences between this contract and more traditional rail franchises were reflected in the terms set out by the DfT, which has resulted in a more appropriate balance of risks and rewards for us as operators.
“The West Coast Partnership’s first phase allows us to earn returns on the significant investments in services and facilities for passengers but protected by a much improved revenue risk sharing mechanism.
“This will transition to a management contract in the second phase, ensuring we can really focus on using the respective skills and experience within our joint venture to deliver the desired benefits of the HS2 project for passengers and the country.”