Next South Western franchise bidders announced - 4 February 2016

[whole diary]

[PhilWakely]

Super franchise for London to South Wales/West/South West and radial routes anyone?

Extend that to include routes to the Midlands and North, award it to a not for profit entity and call it 'British Railways'. Now there's a thought     

[TeaStew]

I wonder if a rebrand of southwest might occur? I assume First would pretty much need to change colours if they won anyway. Would they go for their corporate colours or something else - not sure what the options are for anything "retro" though..?

[ChrisB]

I have just read in my Private Eye (p17 of Issue 1411) that the National Audit Office wrote that the DfT^» (Department for Transport - about) regard just two bidders for a franchise as below the minimum "necessary to ensure good quality bids".

I wonder if they will stick by that or ideology will prevail and the process will continue?

Well, First have gone in with MTR in a 70/30 partnership

In The Telegraph

FirstGroup has teamed-up with one of the companies behind the London Overground to strengthen its bid to run commuter rail services into Waterloo station.

The FTSE 250 bus and rail company has joined forces with Hong Kong transport firm MTR Corporation to put in an offer for the South Western franchise – one of the country’s busiest commuter networks with routes spanning London Waterloo, Reading, Bristol and Portsmouth.

MTR will hold 30pc of the joint venture while FirstGroup will own the balance. The Department for Transport is expected to award the contract in February.

MTR is an attractive partner for FirstGroup because it has considerable experience running rail in the capital and working with Transport for London (TfL^» (Transport for London - about)): The Hong Kong firm already operates the Overground in partnership with Arriva and has been chosen to run the forthcoming Crossrail – recently rechristened the Elizabeth line - spanning London.

MTR's experience is useful to FirstGroup because TfL is preparing to assume control over the capital’s suburban rail services, which means it will have to work closely with companies operating trains into London. South Western is the first contract where parts of the franchise would come under TfL’s remit next year.

FirstGroup and MTR are competing against Stagecoach, the other short-listed bidder for the franchise. Stagecoach is the incumbent operator and has held the South Western franchise since privatisation 20 years ago, giving it an advantage over FirstGroup.

In MTR, however, FirstGroup has found a firm that should boost its bidding credentials. Overground services run through Clapham Junction station, which also serves as an important hub in the South Western network.  MTR began in the 1970s as the operator of Hong Kong’s mass transit railway, which it still runs, but has since branched out around the world.

Steve Montgomery, managing director of FirstGroup’s rail business, said: “MTR runs successful suburban and commuter railways; the company's knowledge from running London Overground and TfL Rail on behalf of Transport for London will add further depth and understanding to an important component of this franchise.”

FirstGroup is attempting to rebuild its rail business, after losing out on a string of franchises in recent years. In 2013, it was forced into a £615m rescue rights issue and scrapped its dividend after it was stripped of the lucrative West Coast contract when the Government identified problems with the bidding process.

Annual results earlier this week showed revenues at FirstGroup’s rail business plunged by 40.7pc to £1.3bn because it failed to keep hold of the Thameslink and ScotRail franchises.

[Noggin]

IIRC^▸ (if I recall/remember/read correctly) aren't the bidder supposed to structure the franchise bid so that TfL^» (Transport for London - about) can potentially take over the inner suburban Waterloo's to Windsor/Dorking/Hampton Court (there was an article map in London Reconnections last autumn if anyone is interested). Otherwise I don't think that the DfT^» (Department for Transport - about) could reshape the SW franchise at this stage in the game, but could perhaps time the ending of the next GWR^▸ (Great Western Railway) franchise to coincide with the SW end and allow for some kind of merger or route reallocation? 
 
Regardless, it's a very smart move. MTR presumably have a very detailed understanding of the mechanics and costs of operating suburban rail services in London (and elsewhere) and can leave DfT under no illusion about the realities of what can be achieved and what costs will be.

First have plenty of experience running services in the South West, and again, you'd expect them to have a good enough handle on costs and practicalities to get the better of the DfT.

Of course, First would appear to have a very good working relationship with Hitachi, and its not inconceivable that the bid would include AT300s for Exeter services (and possibly even express services), cascading Desiros to strengthen services and returning 'proper' intercity trains to the franchise. Assuming that the AT300s turn out to be a decent piece of kit, that would make for some very happy punters, and probably some fairly keen politicians given that the lines go through a lot of seats that the Tories need to keep hold of in the next election.

There is some significant overlap on the franchise, Exeter, Bristol and Reading to London, Salisbury to Southampton spring to mind. But perhaps the presence of MTR in the bid, and the prospect of GWR being retendered enough to allay those concerns?

The other interesting aspect is that if there are AT300s running to Exeter, then the business case for a partial of wholesale electrification the Exeter/Bristol/Basingstoke/Southampton 'polygon' at 25Kv (and perhaps even the conversion of the SWML^▸ (South Western Mail Line) beyond Southampton to OHLE) becomes much more attractive, particularly if you have the SW and GW^▸ (Great Western) franchise holders able to make a joint case to the various funding bodies. 

Finally, if First and MTR do develop a closer working relationship, that could have some positive benefits for the GWR franchise, particularly the Thames Valley, Metro West and even far-western services.

[ChrisB]

IIRC^▸ (if I recall/remember/read correctly) aren't the bidder supposed to structure the franchise bid so that TfL^» (Transport for London - about) can potentially take over the inner suburban Waterloo's to Windsor/Dorking/Hampton Court (there was an article map in London Reconnections last autumn if anyone is interested). Otherwise I don't think that the DfT^» (Department for Transport - about) could reshape the SW franchise at this stage in the game, but could perhaps time the ending of the next GWR^▸ (Great Western Railway) franchise to coincide with the SW end and allow for some kind of merger or route reallocation? 

My assumption is that this will be covered in the ITT^▸ (Invitation to Tender). Has this been issued yet?

There is some significant overlap on the franchise, Exeter, Bristol and Reading to London, Salisbury to Southampton spring to mind. But perhaps the presence of MTR in the bid, and the prospect of GWR being retendered enough to allay those concerns?

The anti-compete clauses will be issued in the franchise document, IF GWR retain the Great Western franchise. My feeling is that the DfT may well want a change of operator on both franchises - SWT^▸ (South West Trains) having held theirs since franchise inception (20 years) and GWR in one guise or another, the same, I think I'm right?
So maybe a swap, or even another operator for one or both? Wouldn't bet against, personally.

[paul7575]

Stagecoach's running WCML^▸ (West Coast Main Line), ECML^▸ (East Coast Main Line) and MML^» (Midland Main Line. - about) doesn't seem to have caused any significant competition issues; GoVia run London Midland, Southern and Southeastern with some overlaps.   It doesn't seem to worry the competition people much.

Although there has been no ITT^▸ (Invitation to Tender), there was a prospectus which included this, my bolding:

Transport for London

Rail Executive recognises that opportunities exist for greater local focus and involvement within the South Western franchise. In particular, there is an intention to work more closely in partnership with Transport for London (TfL^» (Transport for London - about)) to understand how the needs of those passengers travelling on inner London-based services can best be served. Such collaboration might extend to common standards, ticketing, strategic planning, and working together to deliver projects. We may require bidders to establish business units within the franchise that enable a more locally-focussed approach to managing parts of the network, supporting the principle of closer working with TfL.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/479332/dft-south-western-prospectus.pdf

That was November 2015, "We may require" may have firmed up a bit since I expect.   However TfL themselves do not believe SWT^▸ (South West Trains) inner routes would be in a first wave of transfers, looking across a range of papers they seem to be more interested in Southeastern and Southern at the moment.

The basic stuff about 'may require etc' was also found in the consultation document published at the same time.

Paul

[grahame]

My feeling is that the DfT^» (Department for Transport - about) may well want a change of operator on both franchises - SWT^▸ (South West Trains) having held theirs since franchise inception (20 years) and GWR^▸ (Great Western Railway) in one guise or another, the same, I think I'm right?

Your suggestion remind me of a former boss of mine who re-organised the office every six months "to keep people on their toes"; it may have done that, but it also generated a degree of resentment from the staff, un-necessary disturbance to the workflow, and gained the boss more space for himself every re-organisation.

[grahame]

ITT^▸ (Invitation to Tender) published with the last hour or so.  I will add a link once I have one;  so far only seen the main document in my email, and awaiting attachments which is where the much more interesting stuff for most people is to be found.

[grahame]

ITT^▸ (Invitation to Tender) published with the last hour or so.  I will add a link once I have one;  so far only seen the main document in my email, and awaiting attachments which is where the much more interesting stuff for most people is to be found.

https://www.gov.uk/government/publications/south-western-franchise-2016-invitation-to-tender

[paul7575]

ITT^▸ (Invitation to Tender) published with the last hour or so.  I will add a link once I have one;  so far only seen the main document in my email, and awaiting attachments which is where the much more interesting stuff for most people is to be found.

https://www.gov.uk/government/publications/south-western-franchise-2016-invitation-to-tender

The service patterns are unusually in an Excel spreadsheet format, however a quick read through suggests maintenance of the status quo on all routes through Salisbury, with the most recent additions retaining their experimental status:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/533366/swf-itt-attachment-a-part1-train-service-provision.xlsx

[paul7575]

The stakeholder briefing and consultation analysis/report has also become available today:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/534264/south-western-stakeholder-briefing-document.pdf

Just reading it and will add to this post if there is anything relevant to the GW^▸ (Great Western) overlapping areas.   Previous documents show an all day 4 tph weekday service to Reading by the way.

Paul

[ChrisB]

The DfT^» (Department for Transport - about) want to hive off the Island Line to stand alone, outside this franchise

[grahame]

The DfT^» (Department for Transport - about) want to hive off the Island Line to stand alone, outside this franchise

The Isle of Wight line received attention quite out of proportion to the number of services / stations / passengers using it during the consultation process.  Not necessarily saying that's a bad thing, provided that the attention to this line hasn't been at the expense of due time and attention to consider others, and that the Island Line and suggestions for it get only appropriate weighting in any final decision between the two bidders.

[ChrisB]

indeed - but the DfT^» (Department for Transport - about) want it hived off during the franchise to a separate business unit

With the view to securing a more sustainable, long-term solution, the next franchisee will be required to work with stakeholders, including the Isle of Wight Council, Network Rail, and the Department to explore options for the future provision of services that meet the needs of passengers, the local community and the taxpayer. This will also include establishing a business unit for the Island Line, which will provide separate financial and operational data to inform the consideration of potential options

[IndustryInsider]

Previous documents show an all day 4 tph weekday service to Reading by the way.

That would certainly be a big boost to capacity, especially if the trains are 10-car in length as planned.  With the extra hourly Gatwick service also in the offing soon, whilst Reading station now has the capacity to deal with these extra trains, it will certainly be a test of track capacity between there and Wokingham with seven trains per hour each way.  I wonder if Earley, Winnersh Triangle and Winnersh will see all of these additional South Western franchise trains call?