Partnership model in future
THE CURRENT Virgin Trains East Coast franchise, operated by a joint venture of Stagecoach and Virgin, is to end in 2020 to make way for a new ‘East Coast Partnership’ model. The announcement formed part of the Government’s new strategic vision for rail, published on 29 November, which included a commitment to bringing track and train together through alliances between Network Rail and franchise operators.
The East Coast Partnership will see a single management team operate a single brand overseen by a single leader, with the operator working collaboratively with Network Rail. Stagecoach, which has a 90% stake in VTEC, has welcomed the new direction that will include the introduction of the Partnership arrangement from 2020, along with ‘new contractual arrangements in early course to facilitate the transition to the East Coast Partnership model over the next two years’. The company is in discussion with the Department for Transport over the current East Coast contract, and has said it expects a new agreement to be reached ‘within the next few months’.
In its full year results for the year to 30 April 2017, Stagecoach highlighted the ‘onerous contract’ and announced it was allocating an £84.1 million exceptional charge to provide for anticipated losses at VTEC over the next two years. Its latest update, including Stagecoach’s half-year results for the period ending 28 October, states its objective is to ‘address the changed circumstances affecting the franchise, deliver value for money for taxpayers, provide innovative solutions to drive better outcomes for customers, and secure a fair deal for investors’. It adds there is ‘no change to either the estimate of the onerous contract provision reported in June or the extent of the maximum financial commitments of the parent company in respect of the current franchise contract’. Stagecoach says it is ‘encouraged by indications of an improving risk-reward balance in new franchise competitions’, adding it expects the exposure to revenue risk to be ‘significantly less than on franchises awarded in the last few years’, such as VTEC.
OTHERS TOO
In addition to the East Coast Partnership announcement, Transport Secretary Chris Grayling confirmed on 29 November ‘one team’ working between operators and Network Rail would be integral to the forthcoming South Eastern and East Midlands franchises. Mr Grayling described the move as ‘evolution rather than revolution’, adding it is designed to ‘meet the challenge of growth that lies ahead’ as well as delivering value for money and attracting ‘responsible private investment’.
For the Govia Thameslink Railway franchise, the intention is to split the operation into ‘two or more new franchises’ when the current contract ends in 2021. This will include work with Transport for London to explore options for transferring selected services such as the West London line to TfL.
REDHILL PLATFORM 0 PROGRESS
CONSTRUCTION OF the new platform 0 at Redhill is due to be completed by the end of January, Network Rail has told local media.
The new platform is designed to increase capacity at the station and remove conflicts between services on the Brighton main line and Great Western Railway’s Reading to Gatwick services. The £50 million project sees platform 1 become a bay platform for the use of GWR’s services, which reverse at the station, with the new platform hosting London-bound services.
This is aimed to allow GWR to boost the Reading to Gatwick frequency from hourly to half-hourly from May 2018. The operator’s ultimate aim is to introduce a third hourly service on the North Downs line, although concerns from Network Rail about level crossing risk have affected progress with this plan.
