Department for Transport announces winner of East Midlands franchise

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Stock Market statement

For immediate release: 07.00 22 June 2007

More services and extra capacity for the Midlands

The Department for Transport today announced that Stagecoach Midland Rail Limited (a subsidiary of Stagecoach Group plc) has been awarded the contract to run the East Midlands franchise.

The new franchise will begin on 11th November 2007and end on April 1st 2015. However the DfT has the right to terminate the franchise after six years if the operator is failing to meet agreed performance targets.

The franchise will deliver increased capacity, better performance and the introduction of smartcard technology by 2010.

The East Midlands franchise brings together current Midland Mainline services from London St Pancras and the eastern section of Central Trains. It will receive a subsidy in the early years of the franchise and pay a premium in the later years. Over the seven year and four month life of the franchise a premium of £133m (NPV) will be paid to the Department.

Benefits to passengers include:

  • An extra hourly Kettering - London service, with agreement to extend this to a new station at Corby
  • A new direct daily service between Lincoln and London
  • Two trains an hour between London and the new East Midlands Parkway station from 2008
  • A 9% increase in peak capacity into and out of London St Pancras, plus more carriages on the busiest trains between Liverpool and Nottingham.
  • More than £5m of improvements at stations and more than £20m on enhancing rolling stock;
  • Provision of at least 1250 new car parking spaces and 400 more bicycle spaces;
  • Forecast 90.4% punctuality and reliability by the end of the franchise

The Government will continue to limit annual rises of regulated fares in line with national policy, which is currently RPI+1%.

As with all franchises, unregulated fares will be the responsibility of the operator. In the East Midlands, Stagecoach Midland Rail Limited is expected to increase unregulated fares by an average of RPI+3.4% per annum.

Passengers will benefit from new arrangements to be compensated for delays and poor performance.

ENDS

Notes to Editors:

1. The premium profile for the East Midlands franchise is:

Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
35,651* 64,291 36,461 424 (43,842) (77,355) (98,315) (154,978)

(Nominal, £000s, part years indicated with asterisks, premium numbers in brackets)

2. The parties invited to submit bids for the East Midlands franchise were Arriva Trains East Midlands Limited (Arriva plc); First East Midlands Limited (First Group plc); NXE Trains Limited (National Express Group plc); Stagecoach Midland Rail Limited (Stagecoach Group plc).

3. The new passenger refund system, Delay/Repay, will compensate season ticket holders for delays to journeys they have actually taken, not on the basis of overall performance. This is the same compensation system as currently operates for single, return and weekly ticket holders. Refunds will be on the basis of the proportional daily cost of season tickets, with a 50% single refund for delays of 30-59 minutes, 100% single refund for delays of 60-119 minutes, and 100% return refund for delays of 120 minutes+. This system will be rolled out nationally during the term of each new franchise.

4. More details are available on the Department for Transport website at www.dft.gov.uk