THE DEPARTMENT for Transport has cancelled the competition for a new South Eastern franchise. Incumbent operator Govia will continue to operate services until 1 April 2020.

A DfT spokesperson said the cancellation ‘follows significant concerns that continuing the competition process would lead to additional costs incurred to the taxpayer, with no certainty that this would deliver envisaged benefits for passengers in a timely fashion’.

He added: ‘The Department will use this period to develop a solution that delivers the capacity and performance benefits that passengers are expecting, and ensure that the recommendations of the Williams Review can be implemented’.

Three bids were originally submitted for the new franchise, from incumbent operator Govia, a consortium of Abellio, JR East and Mitsui, and a partnership between Stagecoach and Alstom. DfT says that following non-compliances across all bids it completed a rebid process in August 2018, after which it continued its evaluation of the bids and ‘sought to finalise the competition in a manner that maximised the benefits to passengers and taxpayers’.

DfT said it ‘has made every effort and considered all possible options to complete the competition, including a further rebid’, but had now concluded cancellation is the option ‘which will deliver the best outcome for passengers’. The shortlist of bidders had already been reduced to two after it was confirmed in April that Stagecoach had been disqualified from this competition, along with those for the East Midlands and West Coast Partnership franchises, due to non-compliances concerning pensions.

The protracted competition has led to a series of short extensions being awarded to Govia, with the new franchise having originally been planned to start in December 2018.

Govia was subsequently awarded two extensions, firstly to 1 April and then 22 June, before in June it was confirmed the franchise would continue until 10 November with an optional extension to 1 April 2020, which has now been exercised. Govia has operated the South Eastern franchise since 2006.

David Brown, Chief Executive of Govia’s 65% majority shareholder Go-Ahead, said: ‘A lot of hard work was put into a strong bid that would have built upon the achievements of Southeastern in recent years in improving performance and customer satisfaction, delivering more capacity and investment.

‘Whilst we’re disappointed that our original bid is not being taken forward, we will engage with the DfT on next steps.’

Asked whether the cancellation affected the ongoing West Coast Partnership franchise competition, a DfT spokesperson told Modern Railways this competition was still live with a winner expected to be announced by September in line with the schedule set out in the Invitation to Tender. After the disqualification of a bid from Stagecoach, Virgin and SNCF, again there are only two bidders left in the competition – a joint venture of FirstGroup and Trenitalia and a bid led by MTR and Guangshen Railway supported by subcontractors including Spanish state operator RENFE.