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Thursday 08 February, 2001

Shadow StrategicRail

New Trains for Yorkshire ...

Shadow Strategic Rail Authority
8 February 2001


                     New Trains for Yorkshire Commuters:
     Roll Over Terms Agreed for Northern Spirit and MerseyRail Franchises


18 additional vehicles are to be procured by Northern Spirit, under an
agreement between the Strategic Rail Authority, West Yorkshire PTE and South
Yorkshire PTE, to increase capacity on routes run by the Northern Spirit
franchise in West and South Yorkshire.  The additional vehicles will come on
stream at the earliest practicable opportunity.

Passengers on Merseyrail Electrics will benefit from an additional three
coaches for morning peak services in the autumn and a further three coaches in
the summer of 2002.

At the same time, the SRA, in consultation with the local PTEs, has reached
agreement with Arriva plc for the Northern Spirit and Merseyrail Electrics
franchises to be extended by up to two years with the option to terminate
either franchise at an earlier date so that they can be transferred to new
franchises negotiated competitively under the SRA's franchise replacement
programme.

Arriva acquired the franchises in February 2000 as part of the acquisition of
MTL Services plc.  They were loss making, but Arriva agreed to operate them on
existing terms until 18 February 2001.  The new agreements with Arriva take
effect from that date.  Arriva has committed to maintain train services at the
levels in the 2000/01 timetables and is aiming to improve performance and
customer service.  It has also agreed to restructure the Northern Spirit
franchise so that it can be sub-divided between the TransPennine and Northern
franchises.  Operating subsidies contributed by the SRA and the local PTEs in
West Yorkshire, South Yorkshire, Greater Manchester, Tyne & Wear and
Merseyside have been set at levels intended to reflect the costs,
responsibilities and risks involved in operating the services and carrying out
the restructuring of Northern Spirit.



Notes to Editors

1.    Last year, the shadow SRA announced plans for a new Transpennine Express  
      franchise linking the major population centres and transport hubs and a   
      new Northern franchise to provide a coherent network of local services    
      throughout the North of England.  These are to be created by combining    
      services currently run by Northern Spirit and First North Western.
      A shortlist for the Transpennine Express franchise was announced in       
      December. The Northern franchise will be offered later this year.  It will
      focus strongly on the SRA working with five PTEs - Nexus, West Yorkshire, 
      South Yorkshire, Greater Manchester and Merseytravel and its content will 
      be developed in consultation with them.

2.    The SRA is in discussion with Merseytravel PTE on the future of the
      Merseyrail Electrics franchise with a view to providing greater local     
      control over a replacement franchise.

                               Important Notice

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.


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