First Group and Stagecoach shortlisted for East Midlands rail franchise
FTSE 250 listed transport operators FirstGroup and Stagecoach have been shortlisted by the government for the East Midlands rail franchise, which was due to run out in March 2018 but has now been extended.
Stagecoach, which has operated the network under the East Midlands Trains brand since 2007, is one of three bidders including Trenitalia East Midlands Rail, the joint venture between FirstGroup and Trenitalia, to have pre-qualified for the new franchise, which is due to start in November 2018.
The third company on the shortlist is Arriva Rail East Midlands, a wholly owned subsidiary of Arriva UK Trains.
The invitation to tender for the franchise, will encompass infrastructure enhancements and improvements in the area, is expected to be published in the next few months.
FirstGroup and Trenitalia, which is part of rail transportation firm FS Italiane Group, hold pre-qualification questionnaire passports' with Department for Transport’s rail executive which means they are financially able to submit franchise bids to the government.
In December 2015, Trenitalia became the first new entrant to be awarded a passport and is currently pursuing a number of franchises.
The East Midlands franchise incorporates intercity and regional services with around 470 services a day with 26m passengers a year.
It also includes intercity train services on the Midland Main Line linking Leicester, Nottingham, Derby and Sheffield with London St Pancras, as well as a local network for Grantham, Lincoln, Mansfield and services to Luton Airport and East Midlands Parkway.
Rail minister Paul Maynard said: “Network Rail is working on improvements which by 2019 will enable the next East Midlands franchise to deliver more carriages and faster journeys over the whole route, including almost twice as many seats into London St Pancras in the peak hours."
First Rail managing director Steve Montgomery said that both FirstGroup and Tednitalia “have a strong track record in delivering continued modernisation and investment, alongside industry partners, through our rail operating companies Great Western Railway, TransPennine Express and Rail Operator of the Year, Hull Trains".
He said: “Trenitalia’s knowledge will add further depth and understanding as we develop our proposals to deliver passenger benefits that take full advantage of the significant investment that government and the industry are making in the region’s rail infrastructure.”
Stagecoach chief executive Martin Griffiths said: "We are proud of our track record over the past decade of investment and working in partnership with Network Rail, local authorities and other stakeholders to transform rail services for customers, becoming consistently the most punctual long-distance train operator in the country.
"The railway in the East Midlands is crucial to the regional economy. There is a huge opportunity to build on the network's success to create new jobs, build the skills of our people and improve connectivity across the region."
Shares in FirstGroup were down 0.17% to 120p at 0832 GMT and shares in Stagecoach fell 0.43% to 206.70p at 0833 GMT.