Britain
Bidders will also need to show how they intend to work more closely in alliances with NR, as the current franchisee FirstGroup has already demonstrated through pilot projects. “The framework alliance that already exists has delivered tangible benefits, and it makes sense to take that a stage further in the next franchise,” Grisewood says. “The industry sees opportunities to reduce costs through alliancing, and we want to encourage the industry to develop a proposition for how to take the concept forward. Paisley Canal and other projects demonstrate that good progress has already been made in this area in Scotland.”
The 15-year Caledonian Sleeper contract covers the operation of overnight services from London to Edinburgh, Glasgow, Fort William, Inverness, and Aberdeen. Turnover for the service in the 2011-12 financial year was £20m and operating costs totalled £25m. The total cost of operation across the duration of the new franchise will be around £375m, and investment of £100m is planned, half of which will come from the British government with the remainder coming from the franchisee and the Scottish government. Grisewood argues that it makes sense to split sleeper services from the main franchise because they are a niche operation with a discrete market. “The sleeper is a very distinct product,” he says. “Within a larger franchise it would never receive the management attention necessary to develop and grow the business. A separate franchise,
benefiting from a dedicated management focus, driven by innovation and coupled to a major investment provides the opportunity to transform the product and allow it to realise its potential. This is the best way to achieve an internationally-renowned service which is emblematic of the best of Scotland.” Prospective bidders will be invited to
prequalify this Spring for the contract, which is being tendered three months ahead of main ScotRail franchise. “We’ve decided to stagger the procurement because of the resource requirements and also because it makes things easier for bidders,” says Grisewood. “From the discussions we’ve had so far we look forward to receiving some very innovative bids for this franchise. If, however, we are not satisfied with the quality or value for money of those bids we still have the option to fold the sleeper services back into the main franchise as a contingency.” Naturally the impact of the botched
procurement of the Intercity West Coast franchise and the crisis that followed has been felt north of the border, and Grisewood says Transport Scotland has carefully studied the conclusions of the reviews led by Sir Sam Laidlaw and Mr Richard Brown. The current contract has been extended by four months until March 2015 to give Transport Scotland time to fully evaluate the findings and make any necessary amendments to the bidding process. “The failure of West Coast has obviously been a shock for everyone involved in franchise, and given the scale of what’s happened it was
important for us to consider recommendations on both the policy and process sides,” says Grisewood. “Scottish ministers had already decided to pursue a 10-year franchise with a five- year review point, which is consistent with Brown’s recommendations. We have a well-resourced commercial unit at Transport Scotland managing the process and we’ve also been cautious with our programming, allowing at least 20 months for procurement.” Grisewood says that despite the West Coast fiasco, bidders remain confident in the Scottish franchise contests. “Engagement with the market so far has been good and the timescale has been well received by prospective bidders,” he explains. “We haven’t seen any evidence of bidder confidence in our programme being knocked by what happened with West Coast.” From the scenic but isolated lines of the sparsely-populated Highlands to Glasgow’s dense and busy suburban network, the diversity of Scotland’s railway presents many challenges. But with passenger numbers rising consistently across the country, improving journey times, and the prospect of further investment in infrastructure and rolling stock, the prospects look extremely positive. “The minister’s objective is to maintain passenger growth, make the railway more affordable, and improve accessibility for the people of Scotland,” Grisewood concludes. “There is clear evidence that investment has spurred a modal shift to rail and we need to ensure that continues in the future.” IRJ
The Caledonian Sleeper is being split from the main ScotRail franchise and is earmarked for significant investment. Photo: Robin Ralston
30 IRJ April 2013
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