FirstGroup signs new Avanti West Coast rail contract

Aberdeen-based FirstGroup plc announced that a new nine-year National Rail Contract (NRC) has been agreed with the UK’s Department for Transport (DfT) for the West Coast Partnership (WCP), which is a partnership between FirstGroup (70%) and Trenitalia UK Ltd (30%).

“The WCP NRC comprises Avanti West Coast and the West Coast Partnership Development (WCPD), the shadow operator for the HS2 programme,” said FirstGroup.

FirstGroup said the new NRC will commence on October 15, 2023, when WCP’s current contractual agreement ends.

It said the contract is for nine years and “has a minimum core three-year term to 18 October 2026, following which a further six years until 17 October 2032, subject to ongoing DfT approval.”

FirstGroup said: “The NRC is a management contract under which the DfT retains all revenue risk and substantially all cost risk.

“WCP will earn a fixed management fee of £5.1m per annum to deliver the contract with the opportunity to earn a variable fee of up to £15.8m per annum based on a number of criteria.

“Punctuality and other targets required to achieve the maximum variable fee are designed to incentivise the highest level of performance. Fees are also linked to milestones in WCPD’s programme.

“Since the introduction of Avanti’s new timetable in mid-December 2022, the operator has delivered a significant recovery in operational performance, and customer satisfaction.

“Over the last six months, cancellations that Avanti is responsible for stabilised at below 2% of scheduled services.

“Avanti is working through a £117m refurbishment programme for its 56-strong electric Pendolino fleet which is delivering a step change in onboard customer experience.

“Further improvements for customers have included the introduction of a new Standard Premium travel class, a new low-cost flexible ticket and initiatives to support customers who require additional assistance.

“FirstGroup’s ambition is to be the partner of choice for low- and zero-emission transport.

“As part of the new contract, WCP will continue to develop and implement initiatives to reduce its impact on the environment and, as such, Avanti has placed a £350m order for 23 brand new electric or bi-mode Hitachi trains.

“These trains will reduce our carbon footprint, and the operator will continue its work to improve air quality and increase waste recycling.”

FirstGroup CEO Graham Sutherland said: “Our West Coast Partnership team has worked hard over recent months to deliver improvements for Avanti passengers, including an increase in the number of services in the timetable and high levels of reliability for customers.

“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 to the network and help deliver the UK’s decarbonisation agenda.”