Eight-week extension to London Midland franchise

The Government has extended the London Midland franchise by a minimum of eight weeks.

The deal had been due to expire on October 15, but is now due to end on December 10 under the existing terms. A further eightweek extension to February 4 2018 is possible, but the Department for Transport must exercise this option by August 18.

Govia has operated the LM franchise since November 11 2007. LM Managing Director Patrick Verwer said: “This extension means we can continue to build on the successes that have made this an international award-winning franchise. Our focus will remain on delivering the best possible service to our passengers each and every day, and maintain strong levels of customer satisfaction.”

In a Commons Written Reply on July 20, Rail Minister Paul Maynard told Shadow Transport Secretary Andy McDonald: “Franchise competitions have always varied in how long they take to conclude - that’s one of the reasons that almost every franchise has this kind of extension facility written into it.

“Calling this short extension enables us to ensure that the eventual outcome of the competition represents the best deal for passengers. We will make an announcement in due course.”

McDonald had asked when the award of a new deal was planned, why it had been delayed, and if a statement was planned.

Two companies are bidding for the franchise: London and West Midlands Railway Ltd (a subsidiary of Govia Ltd) and West Midlands Trains Ltd (a wholly owned subsidiary of Abellio Transport Group Ltd with East Japan Railway Company and Mitsui & Co Ltd as minority partners).

Under the new deal, the operator will be required to run the franchise in two separable ‘Business Units’, with one dedicated to local rail services led by West Midlands Rail (WMR) in collaboration with DfT. The creation of the business unit specifically for West Midlands local services will also allow for full devolution when the franchise comes up for renewal, should WMR and the Secretary of State for Transport agree to take this forward.