Caledonian Sleeper franchise agreement to be terminated
THE SCOTTISH Government has given notice to Serco that it intends to terminate the franchise agreement with the operator for the Caledonian Sleeper contract with effect from June 25 next year, claiming that Serco’s request to rebase the loss-making contract did not represent value for money. Transport Minister Jenny Gilruth made the announcement in an answer to the Scottish Parliament on October 5.
She said: “I can confirm that Serco Caledonian Sleepers Limited has been advised that its proposal to rebase the franchise agreement with Scottish Ministers for the provision of Caledonian Sleeper rail services has been rejected on the grounds of not representing value for money to the public. “Additionally, I can confirm that a notice was served today which confirms that the Scottish Ministers will terminate the franchise agreement with Serco Caledonian Sleepers Limited on June 25, 2023.
“Work is underway to determine arrangements for the continued provision of Caledonian Sleeper rail services beyond June 25, 2023 and this will be updated to Parliament once determined.
“It is worth noting that Serco Caledonian Sleepers Limited has, broadly, delivered well and significantly improved Caledonian Sleeper services over the last seven years.”
Serco took over the operation of CS in 2015 and has overseen the introduction of new Caf-built Mk.5 sleeper stock, which was brought into use in 2019, replacing the previous Mk.3 coaching stock.
Traction for the trains is provided by GB Railfreight, using a small fleet of rebuilt Class 73/9s and Class 92s, with Class 66s also used to pilot some of the ‘Highlander’ services.
CS is one of two dedicated sleeper services operating in the UK six days a week between Sunday and Friday. Great Western Railway is the other operator, running the Night Riviera between London and Penzance (see pages 48-54 of this issue).
However, the CS operation is far larger than that operated by GWR, with the CS running a ‘Lowlander’ service each night between London, Edinburgh and Glasgow in each direction.
Northbound services are split at Carstairs, with one portion continuing to Glasgow and the other to Edinburgh, while the trains originating from Glasgow and Edinburgh are coupled at Carstairs, before continuing along the West Coast Main Line to London Euston.
The operator also runs ‘Highlander’ sleeper services between Aberdeen, Fort William and Inverness to London Euston, with the three services either being coupled or split at Edinburgh Waverley before continuing north or southbound, depending on the direction of travel.
All services in or out of London are formed of 16 Mk.5 coaches, making the CS trains one of the longest passenger trains to operate in the UK. Responding to the announcement by the Scottish Transport Minister, Serco’s managing director for its transport business, John Whitehurst, said: “When Serco took over the Caledonian Sleeper service in April 2015, we inherited an unreliable and outdated fleet of carriages dating back to the 1970s. “We are extremely proud that under our leadership and management we have introduced new rolling stock and other significant innovations that have completely transformed the service. “The service Serco provides today is widely recognised as being outstanding, providing hotel-standard service and accommodation that is renowned and admired around the world and loved by the people who travel on it. “We thank the Minister for her warm words recognising the achievements of the Serco Caledonian Sleeper team. “The contract signed in 2014 included a rebase clause that meant that, after seven years of the 15-year franchise, Serco could present to the Scottish Government alternative financial arrangements for the remaining years of the franchise.
“The Government and Serco were not able to reach agreement on these revised terms and accordingly the franchise will now end in June 2023, at which point, unless other arrangements can be agreed, Serco will hand back the management of the Caledonian Sleeper to the Scottish Government.
“We note that the Government’s decision not to accept our proposals has not been made due to any performance issues. From Serco’s point of view, the service has been loss-making over the life of the contract and the proposals that we made to Transport Scotland were to put it on a more sustainable financial footing.
“We will continue to work with Transport Scotland around options for the future management of the service and in the meantime will continue to deliver a world-class service for our guests.”