Shares of Perth-based train and bus giant Stagecoach rose 13% after the UK’s Department for Transport (DfT) announced a number of changes to franchises currently operated by Stagecoach.
Stagecoach said planned new arrangements include the introduction from 2020 of the East Coast Partnership, a joint venture between the public and private sector, operated by a single management, under a single brand and overseen by a single leader.
“The Government is currently in discussion with Stagecoach-Virgin, which runs the existing East Coast franchise, with the aim of putting in place new contractual arrangements in early course to facilitate the transition to the East Coast Partnership model over the next two years,” said Stagecoach.
The Perth firm said the new arrangements also include “the next competitively tendered East Midlands franchise being operated by a joint team under an alliance.”
“The Department for Transport previously exercised its pre-contracted option to extend our East Midlands Trains franchise to March 2019, with plans for a further Direct Award franchise from March 2019.
“We look forward to hearing the detailed plans beyond that for a franchise operated by a joint team under an alliance agreement.”
The DfT also published the Invitation to Tender for the new South Eastern franchise, for which Stagecoach is shortlisted.
Stagecoach CEWO Martin Griffiths said: “We welcome the Secretary of State’s clear statement of intent to seek to negotiate new terms for the East Coast franchise with Virgin Trains East Coast and we are hopeful of reaching an agreement through to 2020 within the next few months.
“We look forward to exploring further with the DfT its vision for the franchise from 2020, leveraging our knowledge and expertise from the South Western Railway deep alliance and our longstanding interest in greater vertical integration of UK rail.
“We are excited by the potential to be a trailblazer for a new regional partnership railway on East Coast, building on the huge transformation we have already delivered in customer experience and benefits for local communities on the route.
“With a strong commitment to partnership working by all industry stakeholders, we see a successful future for the UK rail market as a whole which will benefit customers, communities and the country.”