New holder of Wales & Borders rail franchise named next week
The winner of the biggest ever contract awarded in Wales to run the trains and deliver the next phase of the Metro with electrification of the core Valley Lines will be revealed next week.
After a complex bid process, which started with a competitive dialogue stage nearly two years ago, the Welsh Government is expected to confirm early on Wednesday – ahead of the opening of the London Stock Market – the company that will run the next Wales & Borders rail franchise and deliver the next phase of the Metro project in south east Wales.
With £734m committed to electrification of the core Valley Lines into Cardiff – which wouldn’t be completed until 2023 – and rail operating subsidies for the new 15-year franchise, the bid could be worth around £5bn over the long-term.
The procurement process has been overseen by the Welsh Government’s at-arm’s-length transport body Transport for Wales.
With the current holder of the Wales & Borders franchise, Arriva Trains Wales, having withdrawn from the procurement process just before final bids were expected last December, and Dutch transport group Abellio earlier this year after the collapse of its bid construction partner Carillion, it leaves just KeolisAmey and MTR in the race.
However, details on the winning bid, including what mode of rolling stock they have opted to operate on the core Valley Lines, new stations and plans for rolling stock on the rest of the Wales & Borders franchise network, will not be revealed until early June.
This is because the losing bidder effectively has a 10-day window from Wednesday to lodge a legal challenge if they are unhappy with how their bid was scored.
However, if no challenge comes forward, or one is quickly ruled out, that means that full details of the plans of the winning bidder can be published.
It is understood that both Hong Kong-based MTR and Frenchowned Keolis, in its partnership with Amey, have submitted high-quality bids delivering far more than what Transport for Wales was seeking.
With the two bidders having strong track records in delivering and operating rail projects, the scoring is likely to have been very close.
The new franchise will come into effect in October.
While bidders during the process have not been allowed to comment, there is speculation that KeolisAmey could introduce battery-powered trams on the core Valley Lines (or on sections of it).
Although not introduced at scale on a major network with a challenging topography, this would mean less being spent on electrification.
However, it would have to invest in charging points across the network, while battery-powered trams can be more expensive to procure than electrified tram rolling stock.
However, it is understood that MTR would seek to run electrified trams on the Valley Lines, which would require wires being put up across the network.
Both Keolis and MTR are world leaders in delivering tram and light rial schemes.
However, the majority of services and passengers will be on the rest of the Wales & Borders franchise, where diesel services will remain in operation for the foreseeable future.
The profit margin (around 3%, but with incentives for higher than expected passenger growth) will be far less than that provided under the terms of the current franchise, issued by the Department for Transport to Arriva back in 2003.