Govia wins Thameslink rail franchise

Mock-up of new Thameslink train The new franchise will see £6.5bn worth of upgrades

Related Stories

The franchise to run the expanded Thameslink rail network has been awarded to Govia Thameslink, a joint venture majority-owned by Go-Ahead.

The new Thameslink, Southern and Great Northern (TSGN) franchise will run for seven years from this September.

The rail franchise is the largest in the UK in terms of passenger numbers, trains, revenue, and staff.

The government said the franchise would open new routes across London and improve commuter services.

It added that nearly 1,400 extra carriages would be supplied by the end of 2018, increasing capacity by 50% during the peak morning rush-hour into central London.

Analysis

There will be an awful lot of things being crossed at the DfT right now, fingers, toes etc, in the hope that this franchise award passes off without a hitch.

It's the first big deal handed out since the mother of all cock-ups in the autumn of 2012, when the government had to scrap the deal for the West Coast Mainline because overstretched civil servants got all their numbers wrong.

The government's keen to tell me that things will be different this time. They've beefed up their team, got a new franchising boss and they've changed the way they pick a winner, focusing more on the full package of benefits offered to passengers and less on who's offering the most money.

I'll be keeping a close eye on how well the new deal goes. A, because it's my job, and B, because I'll be one of their customers.

Investment

The newly-created TSGN franchise replaces the existing Thameslink and Great Northern franchise - more familiar to passengers as First Capital Connect - and the South Central franchise, which includes Southern and Gatwick Express services.

Govia - which is 65%-owned by Go-Ahead and 35%-owned by French firm Keolis - already runs Southern Railways, London Midland and South Eastern train services, and previously ran Thameslink between March 1997 and March 2006.

First Group, which has been running Thameslink services since 2006, had also bid for the franchise.

First Group said it was disappointed not to be awarded the contract. Tim O'Toole, FirstGroup's chief executive, said "We submitted a strong bid which would have delivered high quality services for passengers, value for taxpayers and an economic return for shareholders."

The government said the TSGN franchise would form a key part in delivering its £6.5bn Thameslink investment programme.

Up to 24 trains per hour will travel in each direction along the Thameslink route after the investment programme is completed.

New tunnels will link Peterborough and Cambridge to the existing Thameslink route, providing greater access across London via St Pancras to Gatwick and Brighton.

The inside of a new Thameslink train carriage due to be rolled out before 2018 Rush-hour services should see a 50% increase in train capacity by 2018

Services to destinations along the Thameslink route including Brighton, Kings Lynn, Peterborough, Cambridge, and Gatwick Airport will be improved.

A small number of services and stations will also transfer from the Govia's Southeastern franchise into the new TSGN franchise in December 2014.

'Symbolic' moment

The DfT said Govia would invest significantly in improving station facilities including free wi-fi at more than 100 stations, better retail and catering facilities and improvements to customer information systems.

David Leam, head of infrastructure at business group London First, said the new franchise would greatly improve journeys on key north-south routes across London.

He added: "As the first franchise let since the West Coast Mainline debacle this is also an important moment symbolically for the government.

"Passengers and taxpayers have suffered as a result of the delayed franchising programme so it's good news all round that it's now back on track."

New contract

The new franchise is being let as a management contract where ticket revenues are passed directly to the government rather than retained by Govia, the train company said.

It is the first time a rail franchise has been awarded under such terms.

A Department for Transport (DfT) spokesman said train fare and season ticket pricing policy would be unaffected.

The government will pay £8.9bn to Govia over the course of the seven year franchise with the government expecting to receive around £12.4bn back in ticket sales from Govia by the end of the franchise.

The DfT spokesman said the new contract reduced the chances of rail operators "handing back the keys" to the government as happened with the East Coast mainline.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Business Live

  1.  
    06:20: Brazil economy Radio 5 live
    Copacabana beach

    The Brazilian currency - the real - has hit a 10-year low after the central bank raised interest rates by half a point to a stonking 12.75% overnight. The BBC's Daniel Gallas in Sao Paulo tells Wake Up to Money that the country could tip into recession this year as the government embarks on an austerity drive, raising taxes and cutting spending.

     
  2.  
    06:11: Interest rates Radio 5 live

    It's been six whole years since the Bank of England cut the base rate to 0.5%. That's been good for borrowers, but not so great for savers - of which there are many more after all. Vivan Slattery, an independent financial adviser, tells Wake Up To Money many of her clients have stayed in cash but are now looking at alternatives given that rates do not seem set to increase sharply anytime soon - particularly as many mortgage holders are now on the standard variable rate.

     
  3.  
    06:05: China growth Radio 5 live

    China has announced that its target growth rate for 2015 is 7% - down from 7.5% for last year. The BBC's Ali Moore in Singapore says the new target is not a reflection of panic in Beijing but part of its drive to lower expectations and rebase the economy to focus more on domestic demand. "It's more about quality than quantity," she adds.

     
  4.  
    Welcome to Thursday Chris Johnston Business reporter

    Good morning from me and Matthew West. Another busy day of business news coming up - we'll be here to guide you through it all. Get in touch with your comments at bizlivepage@bbc.co.uk or on Twitter at @bbcbusiness.

     

Features

From BBC Capital

Programmes

  • Kinetic sculpture violinClick Watch

    The "kinetic sculpture" that can replicate digital files and play them on a violin

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.