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Monday 02 April, 2001

Strategic Rail Auth

SRA Stagecoach Sign SWT HoT

Strategic Rail Authority
2 April 2001




                             Building A Better Railway

               SRA and Stagecoach Sign Up To £1.7 Billion Investment

                            Package for South West Trains





The Strategic Rail Authority (SRA) has signed heads of terms with incumbent
Stagecoach Holdings plc as the preferred counterparty for the new South West
Trains replacement franchise. Under the new franchise agreement, a total of £
1.7 billion will be committed over the first 15 years to implement much needed
changes on this intensively used and overcrowded commuter network.

Currently, around 2.5 million passengers use the South West Trains network
every week.



The focus of the investment proposal is to allow growth in passenger demand,
increase reliability and punctuality, improve levels of customer satisfaction
and reduce overcrowding. Highlights of the deal include more and longer trains,
infrastructure improvements including platform extensions, more frequent
services, and station upgrades to facilitate interchange with tube and bus.



The SRA has negotiated a tough deal with Stagecoach to deliver extra capacity,
higher performance standards and a step change in quality of service for
passengers.  The original franchise is due to expire in February 2003; the new
franchise will operate for 20 years, with provision for shortening the term to
15 years if later capacity schemes are not implemented.



From the start of the new franchise, Stagecoach will be subject to
substantially increased penalty payments for poor performance. They have
committed to providing better customer service and improved punctuality and
reliability, and within the next ten years, aim to run 15 out of 16 trains on
time each day, the equivalent of running 93.75% of all trains on time.



Stagecoach has committed, over the remainder of this year, to introduce new
trains, take steps to improve security, accelerate training for staff, and
improve customer information and to implement a range of other initiatives.



Safety

In line with the Health and Safety Executive's requirement Stagecoach will
replace all Mark 1, slam door rolling stock by 31 December 2004. All rolling
stock in use after 2003 will be fitted with Train Protection and Warning System
(TPWS). Stagecoach is committed to ensuring further continuous safety
improvement.



Within the heads of terms, Stagecoach has detailed a set of schemes, which are
intended to provide the users of South West Trains with the following benefits.




Early Benefits (by 2004)

*        Investment in 800 new vehicles to replace the ageing Mark 1 stock by
2004, to increase the fleet and to help relieve overcrowding

*        Stagecoach will undertake a programme to lengthen platforms at
Waterloo and throughout the suburban system to allow the use of 10-car trains
in place of the current 8-car trains.  This will increase the peak capacity on
most suburban routes by 25% by the end of 2004

*        A recast timetable on the Windsor and Reading lines to provide 14
extra trains in each peak and give 15 minute service frequency on the Suburban
lines through Hounslow and Putney

*        Doubling of the Portsmouth  to Southampton service frequency and
provide a new service between Southampton and a re-opened station at Chandlers
Ford

*        Integrated transport projects including three new Rail link buses from
Waterlooville to Petersfield, from Yately to Farnborough and from Alton to
Winchester via Alresford. Existing Stagecoach bus services in Hampshire and
Surrey will be re-organised to provide a Rail Connections Network. Timetables
will be changed to improve rail connections, and there will be through
ticketing



Longer Term Benefits

*        The re-development by 2007 of Clapham Junction, one of the busiest
interchange stations on the railway network.  The upgrade is designed to make
the station more comfortable and convenient for local passengers and for those
who change trains.  There will be a new overbridge or upper concourse with lift
or escalator access to platform level, passenger lounges and improved passenger
shelter on platforms

*        Improvements at Waterloo Station to provide for the safe and
convenient circulation of a growing number of passengers

*        Upgrading of Wimbledon and Vauxhall stations to improve interchange
with the Underground

*        A programme of investments in infrastructure designed to overcome
major causes of delays to trains.  The programme includes installing stronger
rail and more reliable signalling components on the most critical sections of
the network (between Waterloo and New Malden, and between Havant and
Portsmouth)

*        Stagecoach is committed to providing 3,400 new car park spaces by May
2006

*        Bringing facilities at all stations up to an improved standard to
increase passenger comfort and personal security.  CCTV will be installed at
all stations and linked to the British Transport Police management information
control centre.  Waiting areas will be improved and toilets will be provided at
all staffed stations. Stagecoach is committed to a phased programme to provide
disabled access to all platforms by 2014



Also contained in the document are a set of aspirations. These are projects
that will be brought forward subject to feasibility studies, and, where
appropriate, passenger growth.



Aspirations

*        Introduction of  16 car trains on long distance routes by extending
platforms at Waterloo and other stations (2006)

*        Extension of platforms 1-6 at Waterloo for 12 car suburban trains
(2009)

*        Various infrastructure schemes to ease delays, including new platforms
at Havant and Portsmouth and Southsea (End  2009)

*        Introduction of double deck trains between Waterloo , Guildford,
Basingstoke, Chessington, Hampton Court and Kingston

*        Restoring passenger services between Bournemouth and Swanage and
between Southampton and Hythe, as well as doubling the frequency of services
between Weymouth and Poole





Chief Executive of the SRA, Mike Grant said:



'I am delighted to announce the Heads of Terms for this exciting new franchise
deal with Stagecoach. South West Trains is one of the South East's most
congested networks. Everyday thousands of passengers use it and the number is
still increasing.



'I believe the Stagecoach deal includes significant passenger benefits and
addresses the key issues that affect passengers at an early stage. It
represents a commitment to help resolve capacity problems on the busiest rail
network in Britain, while keeping disruption to services to the minimum.
Stagecoach have learned lessons from their existing tenure, and acknowledge the
need for further progress. Passengers can now look forward to a step change in
customer service.



 'Investment is the key to improving the rail network, and as part of the deal,
around £700 million will be invested in new trains, most of which are planned
to be in service by 2004. A further £1 billion will be invested in new
infrastructure to help ease congestion problems and to improve reliability.



'The decision to select Stagecoach was a tough one. It was a highly competitive
process, offering us a choice of strong proposals. However, we are confident we
have made the right decision and I look forward to substantially improved
performance from Stagecoach and the South West Trains franchise going forward.'



Chairman of the SRA, Sir Alastair Morton, said:



' With this decision for South West Trains, we have taken a crucial step in the
franchise replacement programme described in our Strategic Agenda.  I look
forward to the SRA agreeing a number of others this year.



'New investment is key to the success of the rail industry and rolling stock
replacement plays a major part, as this deal demonstrates. I am pleased by the
benefits generated from competitive bidding; in particular, Nederlandse
Spoorwegen  (Dutch State Railways) joined FirstGroup in submitting a very
challenging bid. I hope we shall see more from them.



'Change cannot happen overnight, but over the next few years passengers on the
South West Trains franchise will see marked improvements to their service.'



Notes to Editors:



1.      Stagecoach currently operates the existing South West Trains franchise,
serving a mixture of long and short distance journeys, with a high percentage
of commuters. Services run between Waterloo and Greater London's southwest
suburbs and via Woking, Basingstoke, Guildford, Weymouth, Portsmouth and
Reading.

2.      The original franchise is due to expire in February 2003; the new
franchise will operate for 20 years, and will exclude the Wessex services of
the existing franchise (Waterloo to Exeter and related services). Stagecoach
will continue to run these Wessex services, which are now subject to a separate
replacement process, until February 2003 at the latest.

3.      South West Trains is Britain's largest franchise, carrying 2.5 million
passengers per week and running more than 500,000 services a year.









  For media enquiries please contact the press office on 0207 654 6339/ 6234/
                 6387. Or visit the website on www.sra.gov.uk




                               Important Notice

This news release is issued by the Strategic Rail Authority 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 Strategic Rail Authority and will not
regard any other person as its client in relation to passenger railway
franchising or be responsible to anyone other than the Strategic Rail Authority
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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