FirstGroup to replace Virgin on West Coast rail line

Aberdeen-based bus and rail giant FirstGroup plc said on Wednesday its First Trenitalia partnership has been awarded the contract to operate the lucrative train services on the Glasgow-London West Coast Main Line from December 8, 2019 until 2031.

The UK’s Department for Transport said First Trenitalia has been awarded the West Coast Partnership (WCP) contract, which also includes responsibility for running the first HS2 trains from 2026.

First Trenitalia is a joint venture between FirstGroup and Italian-owned train operator Trenitalia, with FirstGroup owning 70%.

First Trenitalia will pay £1.6 billion real net present value in premiums to the UK Government over the first phase — from December 8, 2019 to March 2026.

Trenitalia currently runs trains on the c2c line between east London and Shoeburyness in Essex.

Virgin Trains, a partnership between Virgin Group and Stagecoach, has run services on the West Coast line since March 1997.

“Today’s award confirms that, from December 2022, passengers will benefit from 263 extra train services every week, with Motherwell set to become a major calling point for most West Coast Partnership services,” said the Department for Transport.

In a stock exchange statement FirstGroup said: “The new Partnership will operate from 8 December 2019 and comprises two distinct phases.

“In the first phase to March 2026, First Trenitalia will operate existing InterCity West Coast services while providing a range of design, development and mobilisation services as Shadow Operator to the High Speed 2 (HS2) programme.

“First Trenitalia will then operate HS2 and the reshaped InterCity West Coast rail services together as an integrated operation in the second phase, from March 2026 until March 2031, under a management contract.”

FirstGroup chief executive Matthew Gregory said: “The West Coast Partnership includes operation of one of the most consistently successful intercity mainline franchises over the last 20 years.

“We are committed to delivering a range of improvements for InterCity West Coast passengers during the first phase of the partnership and our aim is to provide exceptional service as standard for our customers.

“In 2016, we and our partner Trenitalia committed to bidding for the West Coast Partnership as it is a unique opportunity to help shape and then run HS2.

“We look forward to playing our part in the success of the once-in-a-generation project to bring Britain’s largest cities closer together.

“The differences between this contract and more traditional rail franchises were reflected in the terms set out by the DfT, which has resulted in a more appropriate balance of risks and rewards for us as operators.

“The West Coast Partnership’s first phase allows us to earn returns on the significant investments in services and facilities for passengers but protected by a much improved revenue risk sharing mechanism.

“This will transition to a management contract in the second phase, ensuring we can really focus on using the respective skills and experience within our joint venture to deliver the desired benefits of the HS2 project for passengers and the country.

“We are pleased to have won the West Coast Partnership with Trenitalia, a strong partner who is committed to playing an increasing role in UK rail.

“The Partnership strengthens and adds a fourth franchise to our UK rail portfolio.

“Following this award we will not therefore be seeking new franchising opportunities for the foreseeable future over and above our current negotiations with the DfT to extend GWR.

“Our focus remains on delivering sustainable shareholder value and we will actively manage our rail portfolio and its risk and reward profile accordingly.”

UK Transport Secretary Grant Shapps said the award of the contract is supported by Keith Williams, who is leading a UK Government-commissioned review into the railway.

“This award is positive news for passengers, with more services, more direct connections and ambitious plans for a cleaner, greener railway, and also represents a decisive shift towards a new model for rail,” said Shapps.

“It is a partnership supported by Keith Williams, built with the flexibility to respond to his recommendations and deliver fundamental reform to a flawed system.”

Shadow transport secretary Andy McDonald claimed giving the contract to FirstGroup is a “gross error of judgment” following the DfT’s decision last week to scrap the South Eastern franchise competition after admitting it would not deliver enough benefits for taxpayers or passengers.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.