News
First Group ousts Virgin from West Coast
Brazil outlines open-access plan
B
RAZIL’s state-owned railway engineering and
construction company Valec has revealed further details of the government’s plans to allow open-access freight operations in certain areas. Speaking at a seminar in São Paulo on August 7, Valec president Mr José Eduardo Castello Branco said one of the first demands of Valec and its future network management company would be the certification of rolling stock and train crews.
Keith Barrow Associate Editor
B
RITAIN’s Department for Transport (DfT) has
awarded First Group the contract to operate the flagship InterCity West Coast franchise for 13 years and four months from December 9, ousting the Virgin/Stagecoach joint venture which has run the franchise since 1997. First plans to invest around £350m over the next five years, adding an extra 40,000 seats per day to West Coast services by 2016. The Pendolino tilting emus will be lengthened from nine cars to 11 cars by the start of the new franchise, increasing capacity by 28,000 seats per day. Journey times between London and Glasgow will be reduced by 15 minutes, and new direct services will be launched from London to Blackpool, Shrewsbury, and Bolton. The frequency of London - Preston services will be doubled and there will be more stops at Nuneaton and Milton Keynes. From December 2016, First will introduce a new fleet of 11 six-car 200km/h emus on Birmingham - Edinburgh/ Glasgow services, which will allow the Voyager dmus currently used on these
8
services to be redeployed. The Pendolinos and Voyagers will also be refurbished with new seats and improved luggage space.
First will pay a premium of £5.5bn (net present value) to the DfT over the lifetime of the franchise, starting at £26m in the year ending March 2014 and rising to £739m in the year ending March 2026. Virgin Trains paid a premium of £160m to the DfT in the last financial year, and offered £4.8bn for the new franchise. “Our winning bid is a deliverable proposition that is compelling for all who want to see a greater use of our rail networks,” says Mr Tim O’Toole, CEO of First Group. “Our bid also delivers value for taxpayers by returning premiums to the government underpinned by sustainable growth in passenger numbers and revenues from the utilisation of significant available capacity. The new franchise will provide an economic return for our shareholders and is value enhancing from day one.” In a statement, Virgin Group founder Sir Richard Branson warned that the DfT risks repeating the mistakes of failed franchises:
“[Our] achievements have
counted for little - as this is the fourth time that we have been outbid in a rail tender. On the past three occasions, the winning operator has come nowhere close to delivering their promised plans and revenue. In the case of the East Coast Main Line, both winners - GNER and National Express - over-promised to win the franchise and spectacularly ran into financial difficulties in trying to deliver their plans. East Coast is still in
government ownership and its service is outdated and under- invested. Insanity is doing the same thing over and over again and expecting different results. When will the DfT learn?”
Branson also indicated that
the Virgin brand is likely to disappear from Britain’s railways. “Based on the current flawed system, it is extremely unlikely that we would bid again for a franchise,” he says. “The process is too costly and uncertain, with our latest bid costing £14 million. We have made realistic offers for East Coast twice before which were rejected by the DfT for completely unrealistic ones and therefore will have to think hard before embarking on another bid.”
Open-access will be allowed not only on four new railways in the south of the country, but on existing lines including the North-South Railway, and Vale’s Carajás Railway. Concessionaires building new lines will be able to apply for paths, but Valec will also sell capacity on the open market. The aim is to ensure both that available capacity is used, and that all operators and their customers have fair access to infrastructure. Branco cites the East-West Integration Railway as an example of why open-access is needed. “The railway serves a mining area capable of generating 100 million tonnes of iron-ore per year,” he explains. “It also serves a soya producing region. If we don’t make open-access public policy, the entire capacity of the railway would be in the hands of the mining company. The government should ensure soya producers have access to international markets via the railway.”
V250 emu makes passenger debut
N
S Hispeed celebrated a long-awaited milestone on July 29, when one of its AnsaldoBreda V250 emus worked a scheduled passenger service for the first time. The train operated the 17.10
from Amsterdam Central to Rotterdam Central via HSL South, and made several more return trips that evening. Each passenger on board was served a celebratory cake to mark the occasion.
IRJ September 2012
Photo: Paul Bigland
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