Shadow Strategic Rail Authority
14 March 2000
Building a Better Railway:
Six Companies Shortlisted for First Franchise Replacement Round
Details of the parties that have been selected for the first phase of
franchise replacement negotiations for the GNER, Chiltern and Connex South
Central franchises were announced by SSRA Chief Executive Mike Grant today.
Two parties are to go forward for negotiations for each franchise. The
companies selected for negotiation are as follows:
GNER: Sea Containers (incumbent owner of Great North
Virgin Rail Group in conjunction with Stagecoach
Chiltern: M40 Trains (incumbent owner of Chiltern Railways -
subsidiary of Laing Group)
Go-Ahead (franchisee of Thames Trains)
Connex South Central: Connex Rail (incumbent owner of Connex South
Central - subsidiary of Vivendi SA)
GoVia (franchisee of Thameslink)
On the South Central franchise, SSRA is looking for evidence that the
operators are committed to a radical improvement in service quality. In
particular, SSRA will be looking for early achievement of higher performance
standards, including cleanliness and provision of information. Proposals in
these areas will need to be far more ambitious than the ideas outlined so far.
We appreciate that passengers will be looking for the signs that potential
operators are serious about making improvements.
Negotiations for both South Central and Chiltern are expected to last several
weeks, with a view to replacement franchises being determined in late spring
and becoming effective in the second half of the year.
On the GNER franchise, the proposals are associated with extensive upgrade of
the East Coast Main Line, so the decision process will take longer. With the
Virgin & Stagecoach proposal, SSRA will need additionally to be convinced that
it is in the interests of passengers that the two major London to Scotland
franchises should be in the hands of a single owner.
SSRA Chief Executive, Mike Grant, said:
'After careful consideration of the merits of the various proposals, we have
selected which companies' proposals we wish to take forward for negotiation.
'The negotiation process will now start in earnest to decide the future owner
and duration of these three franchises. Throughout the process, we will be
aiming to ensure the best possible deal for the passenger in the final
outcomes, with strong commitments to investment and improved customer service,
along with value for the taxpayer.'
Notes to Editors
The pre-qualified parties who were unsuccessful in moving forward to the
negotiation stage for round one are Arriva (for the Chiltern franchise)and
Stagecoach (for the Connex South Central franchise).
On March 8, the SSRA invited companies to pre-qualify for the three
franchises which would form the second round of franchise replacement
(franchise propositions based on the existing Central Trains franchise, and
the South West Trains franchise and a new franchise proposition, Transpennine
Express, which forms part of the franchise currently operated by Northern
Spirit Ltd). It also announced the setting up of a feasibility study into the
possibility of a dedicated 'Wales Rail' franchise.
This news release is issued by the Franchising Director and its contents have
been approved for the purposes of section 57 of the Financial Services Act
1986 by KPMG Corporate Finance.
KPMG Corporate Finance is a division of KPMG, which is authorised to carry on
investment business by the Institute of Chartered Accountants in England and
Wales. This news release has been prepared for general information purposes
only and is not intended to form the basis of any investment decision or
constitute an offer or invitation to bid for any passenger rail franchise or
to acquire shares in a train operating company. Neither this news release nor
any copy of it should be taken into or distributed in Canada, France, Japan or
the United States except in accordance with an applicable exemption. The
distribution of this news release in other jurisdictions may be restricted by
law and therefore persons into whose possession this news release comes should
inform themselves about and observe any such restrictions.
KPMG Corporate Finance is acting for the Franchising Director and will not
regard any other person as its client in relation to passenger railway
franchising or be responsible to anyone other than the Franchising Director
for providing the protections afforded to clients of KPMG Corporate Finance
nor for advising any other person on the contents of this news release or any
matter referred to in it.
Media Enquiries: SSRA Press Office 0207 940 4387/4234/4294
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