(Story updated 12.28, 17 January.)
THE Department for Transport has revealed the list of contenders who have been shortlisted to take over the East Coast franchise in early 2015.
The three groups which have made it through to the final round are FirstGroup, Keolis/Eurostar and Stagecoach/Virgin Trains.
The return of East Coast to the private sector is a controversial move, which has been opposed by rail unions and others. It was taken over by the DfT's subsidiary Directly Operated Railways in November 2009, after National Express Group had been forced to withdraw when revenue failed to meet expectations.
However, the DfT is pushing ahead with what will effectively be a sale of the existing operator, offered as a going concern. The new contract is expected to last for eight to nine years, with a possible two-year extension.
Rail minister Stephen Hammond said in the Commons yesterday (16 January) that the result of the competition can be expected in October.
Virgin has recently revealed that it is the minority partner in its bid with Stagecoach, and if it succeeds will have 10 per cent of the operation. On Intercity West Coast Virgin has 51 per cent and Stagecoach the rest.
The ratio of the split between Keolis and Eurostar has not been published, but Eurostar has been described as having a 'minority' share.
There was one immediate comment from FirstGroup, which won and then lost the Intercity West Coast franchise in 2012 because of confusion within the DfT over bid calculations. First's director of UK Rail Vernon Barker said the group was 'delighted' to have been shortlisted, and added: "We look forward to reviewing the contract details and submitting an innovative, compelling, and value for money bid."
Stagecoach Group said that it had already started consultations with stakeholders along the route, while a spokesman for the joint venture of Keolis and Eurostar said its bid, which is being led by former East Coast chairman Elaine Holt, 'was set to focus on the combination of Keolis’ proven franchise management skills and Eurostar’s record of customer service delivery and product innovation'.
The DfT said the three bidders which have passed the Pre-Qualification Evaluation stage 'can now start working on developing their plans for the franchise, before they receive the Government’s Invitation to Tender'.
The winner of the franchise will be the operator of the new Intercity Express fleet which has been ordered from the Hitachi-led consortium Agility Trains by the DfT for the East Coast and Great Western Main Lines, and which is being assembled in County Durham.
The DfT commented that 'these potential operators will need to consider how they intend to use the latest high-tech trains, built in the UK by Agility, to deliver more passengers to more of the UK's biggest cities faster and in greater comfort'.
Apparently in response to the opposition, the official statement continued: 'While the East Coast franchise has been stabilised under government ownership since 2009, the route now needs a long term private sector operator to plan for the future and meet the increasing demands for more trains serving even more destinations.'
Rail minister Stephen Hammond said: “Giving passengers more will be at the heart of the new East Coast franchise. That means new services and journeys that are faster, more punctual and more comfortable. When these companies are developing their proposals they should be looking at ways to innovate and grow the service.
“We have embarked on one of the biggest programmes of rail investment ever, with over £35 billion being spent to enhance and run our rail network over the next five years. But for our railways to continue to grow we need strong private sector partners who can invest and innovate in ways that deliver a world class service.”
Rail Delivery Group director general Michael Roberts added: “This marks a further important step in bringing private sector innovation and investment back. Britain has a winning formula where private operators are focused on encouraging more rail use and Network Rail concentrates on improving the infrastructure."
However, voices opposing the new franchise have been heard again today. RMT general secretary Bob Crow said: “The truth is that out of pure ideology, this government is prepared to take a third gamble on their big-business friends in a desperate bid to privatise the East Coast Main Line before the election.
"The publicly owned East Coast is Britain's most successful rail operation carrying more passengers per mile, more efficiently and with the highest levels of passenger satisfaction and handing over £200 million a year back to the taxpayers. That is what the government are out to destroy."
The DfT is planning to issue the Invitation to Tender at the end of February. It said the shortlisted operators 'will then have at least three months' to develop their bids and lodge their final responses. The winner is due to take over the franchise in February 2015.
THE OFFICIAL LIST
East Coast Trains Ltd (First Group plc)
Keolis/Eurostar East Coast Limited (Keolis (UK) Limited and Eurostar International Limited)
Inter City Railways Limited (Stagecoach Transport Holdings Limited and Virgin Holdings Limited)