South Western franchise.
Stagecoach operated the first train service of the privatised era when it commenced operations on February 4 1996, and it has held the South West Trains franchise ever since. In its first year of operation there were 95 million passenger journeys with revenue of £ 274 million, and a subsidy of £ 63m was paid by the then Office of Passenger Rail Franchising.
Today, the rolling stock that passengers would still recognise are the Class 159 diesel units used on the route between Waterloo and Exeter and the Class 455 electric units diagrammed for use on suburban services. Otherwise the substantial fleet of Mk 1 vehicles has gone, replaced by the Siemens Class 444 and Class 450 units, as well as the Class 442 Wessex Electric sets based on the successful Mk 3 coach.
The latter rolling stock continues to find favour - to provide more capacity, the fleet that is currently in store is to be recalled for use on services between Waterloo and Portsmouth.
Twenty years later the comparable statistics for 2015 reflect a transformation of operations carried out by the franchise. There are 238 million passenger journeys with revenue of £1,044m, and Stagecoach made a premium payment to the Department for Transport of £ 380m. Its own profit was £ 20m, which is a tiny return of 1.9% considering the risks associated with a business with this size of turnover.
Despite value added performance that most corporate organisations would envy, the incumbent is to be displaced with a new contract awarded to a consortium of FirstGroup and the MTR Corporation of Hong Kong. First MTR South West Trains - a mouthful that will surely be replaced with a brand name - will commence operations on August 20 2017 for a period of seven years.
There were only two bidders in the competition for the new contract, and it is the ‘quality’ element of the First/MTR bid that is likely to have resulted in its successful outcome. In time we will know how the DfT scored the bids, but in the meantime Stagecoach is obviously aggrieved that it has failed to retain operating rights after such a long period of time.
It can be speculated that if there was little difference in the financial offer, then the breakdown of the Deep Alliance between Stagecoach and Network Rail in 2015 was also a cause of making the change - the current Secretary of State is on a mission to increase the level of integrated management of rail operations and infrastructure.
A new attempt is being made to provide integrated management, and the DfT says the new franchise will feature closer partnership working between track and train, predominantly run by an integrated local team of people with a commitment to the smooth operation of their routes. The Government expects the new franchise to work closer with Network Rail, with the shared aim of improving day-to-day performance.
The failure of the previous Alliance, which ended two years before the intended termination date, has never been adequately explained. It is believed NR became restive that it did not have sufficient control of the activities for which it was ultimately responsible, as there was no Route Director within the reporting structure. For the train operator, it is also known that the approach to track access delay compensation arrangements created conflict.
Significantly, the commitment this time does not mention an Alliance, seemingly recognising that as separate legal entities the best that can be hoped for is that staff at stations and depots might share the same messroom.
In operational terms, the headline change is the restoration of the Class 442 Wessex Electric fleet for use on Portsmouth main line services, as well as the replacement of existing rolling stock used on suburban services with a new fleet of ( as yet) unspecified trains.
Although the planned enhancement of peak services at Waterloo will result in 30,000 additional seats in the evening peak, there has been a change in the way capacity is measured. Use of the number of seats to measure service delivery has been changed to providing more space.
There has been a realisation that a high- density seating layout with a 3+2 configuration and reduced seat pitch does not work well on inner-suburban services.
The effect has been to increase dwell time, and if station stops have to be longer the gains from running longer trains are lost.
Passengers are known to prefer standing over short distances if the suitable space is available, and there is the benefit of easier accommodation for bicycles, wheelchairs and those travelling with young children in pushchairs.
The 90 new trains that are to be introduced on the Reading and Windsor routes will replace the ageing fleet of Class 455 units that first appeared in 1982. There has been a programme of technical enhancement with conversion to AC traction motors, so it must be concluded that it is the approach to interior design that has led to the fleet being superseded.
More surprising is the replacement of the Class 458 Alstom Juniper units, which have been extensively modified to operate as five-car sets by incorporating vehicles from compatible Gatwick Express Class 460 vehicles. This rolling stock is very much mid-life, with less than 20 years’ service use.
Of note is the fact that there is no reference to the future traincrew arrangements for the new vehicles, wisely avoiding any premature reaction to future intentions.
Many customer-led improvements are to be put in hand. These include an investment to modernise Southampton Central with a new-look entrance, while at other stations waiting rooms are to be refurbished.
There are also ticketing innovations, with the introduction of season tickets that do not have to be used every day, a new smartcard automatically offering the cheapest walk-up fare, a discount scheme for students, and mobile phone barcode tickets that will be available for the first time. Delay repay compensation will also be applied if there are delays exceeding 15 minutes.
It is right to ask why the franchise contract is so short, given that there will be £1.2 billion of new investment, of which £ 80m will be directed funded by the train operating company.
“The failure of the previous Alliance, which ended two years before the intended termination date, has never been adequately explained.”