Posted 19th September 2023 | 3 Comments
New contracts for Avanti West Coast and CrossCountry
► Incumbent operators win right to stay
► DfT avoids any more renationalisations
► Avanti warned improvements must continue
Updated 11.42
The Department for Transport has awarded National Rail Contracts for Arriva West Coast and CrossCountry. Both will start on 15 October, when the present agreements expire. The decisions have avoided the need to renationalise any more former franchises, following the surrender of TransPennine Express.
Avanti West Coast, which is owned by FirstGroup and Trenitalia, has been battling with performance problems and had been given two six-month terms to allow time to recover.
Its new contract will run for at least three years, until 18 October 2026, and possibly up to nine, although the transport secretary will be able to end the contract at any time during the six-year extension period by giving three months’ notice.
The DfT said that by March this year ‘Avanti had already made significant progress towards its recovery, with 40 per cent more services being run and cancellations within Avanti’s control falling to 4.2 per cent. Those arrangements were further extended to ensure these improvements would continue and passengers would feel confident in using the services again.’
It continued: ‘Since then, Avanti West Coast’s services have seen further improvements. Cancellations have consistently been below 3 per cent since March, and as low as 1.1 per cent in July 2023, down from 13 per cent in January 2023. Over 90 per cent of trains now arrive within 15 minutes of their scheduled time, improved from 75 per cent in December 2022. Over 100 additional drivers have been trained and brought on since April 2022.’
West Coast Partnership, which comprises Avanti West Coast and the future operator of HS2, will earn a fixed management fee of £5.1 million a year, with the opportunity to earn a variable fee of up to £15.8 million a year if punctuality and other targets are met. As with other National Rail Contracts, the owners of AWC will continue to take no revenue risk, meaning that AWC will pay all revenue to the DfT and will not suffer if earnings fall.
FirstGroup chief executive officer Graham Sutherland said: ‘The new National Rail Contract agreed today will allow our team to use its expertise on further improvements. These include programmes to refurbish the existing fleet and to introduce new, more environmentally friendly trains, which will encourage more passengers to return.’
Transport Focus director David Sidebottom said: ‘After previous poor performance, leading to missed meetings, appointments and leisure events, passengers will be relieved that Avanti are now delivering a more frequent and reliable service.
‘In Transport Focus’ latest Rail User Survey, passenger satisfaction with Avanti West Coast has improved, now at 87 per cent, the highest level seen for more than a year. Satisfaction with punctuality and level of crowding on board is also recovering, although still lower than previous levels.
‘Avanti must continue to focus on improving reliability.’
Labour shadow transport secretary Louise Haigh said: ‘Passengers who rely on this abysmal service will be appalled that, despite being almost rock bottom of the league table for delays, Avanti is being awarded a lucrative new contract. That’s on top of millions of pounds in performance bonuses.
‘The only reliable thing about Britain’s railways under the Tories is the waste of taxpayers’ money, which the government has put into the pockets of shareholders. Rather than rewarding failing operators by renewing their contracts, Labour would end this scandal by bringing them back into public ownership as they expire and put passengers first.’
Meanwhile, Arriva has won a new contract for CrossCountry with a core term of four years and a maximum possible term of eight years.
The contract includes the replacement of High Speed Trains with ‘more modern rolling stock’, refurbishment of existing fleets and direct daily services between Cardiff and Yorkshire, north east England and Edinburgh from December 2024.
Arriva Group’s UK Trains division David Brown said: ‘This is great news for Arriva Group, our colleagues at CrossCountry and for customers of the railways. I’m proud of our long-standing reputation in the UK rail industry and our track record of successfully managing and delivering train services across the country. The government’s confidence in Arriva will ensure we can deliver connectivity and more comfortable services.’
The CrossCountry award has come as the future of Arriva, which is owned by Deutsche Bahn, is in the melting pot. Infrastructure fund I Squared is a lead contender, although reported interest shown by FirstGroup may now have receded.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
david C smith, Bletchley
We now have, since 1994 , a passenger railway that , as far as innovation, enterprise and investment go, has to all intents and purposes become renationalised , with the TOCs just there as the DfT's employee ( little wonder there are fewer and fewer "takers" these days ). Hardly anybody thought , 30 ( nearly ) years ago, that the only people wanting to run our rail services would be state railways of other countries.
If all the important decisions are to be made in Whitehall , and investment funding to rely on HM Treasuary, the whole point of privatisation is lost . Of course, there are some passenger operations that are natural monopolies with captive markets, which need to be in a public sector structure, but the rest could bring extra benefit as independent , competing businesses.
Finally, none of the above needs to preclude subsidies and charges that can act as motivators to take into account "hidden" costs and benefits.
Chris Jones-Bridger, Buckley Flintshire
I suppose the award of these contracts to the incumbent operators provides some stability. Hopefully given the introduction of the new Avanti Hitachi fleets will allow a managed cascade of Voyager sets to Cross Country. Since Arriva took over the latter operation it has always been tightly resourced for rolling stock and with the withdrawal of it's remaining HST's even more so.
The devil will be in the detail as to what incentives both operators have to grow revenue given the current perverse relationship between the DfT and the operators where the former is the direct recipient of receipts. There is only so much cost control the operators can exercise and as the industry stabilises post covid revenue growth is vital.
Also Avanti is still only operating approximately 80% of the pre pandemic timetable. What assurances are there that the remaining services will be reintroduced. For example the Chester/North Wales service group is still a long way to being fully restored. Given part of the Hitachi order is to replace the Voyager diagrams on this service group will they still be deployed as ordered?
John Porter , Leeds
What does “more modern rolling stock” for Cross Country mean? Does it mean inheriting Avanti’s Voyager diesels and converting them to bimodes?
[Who knows? Those are the words of the DfT. We put them in quotes to indicate that.--Ed.]