TIDMSGC
RNS Number : 3175S
Stagecoach Group PLC
07 July 2015
Stagecoach Group plc
7 July 2015
South West Trains franchise
Stagecoach Group plc ("Stagecoach") confirms that it has been
notified by the Department for Transport ("DfT") that it is ending
the discussions with Stagecoach subsidiary, Stagecoach South
Western Trains Limited ("South West Trains"), regarding the direct
award of a new rail franchise.
The current franchise is due to end in February 2017 and, as
previously reported, South West Trains had submitted proposals to
the DfT as part of previously announced government plans for the
direct award of a new franchise to at least April 2019.
The DfT has now indicated that it plans to invite applicants to
tender for a new long-term franchise to commence sometime in
2017.
In the meantime, the DfT has indicated that it expects to
exercise its pre-contracted option to extend the current South West
Trains franchise beyond February 2017. The option allows the DfT to
extend the franchise to no later than August 2017. Stagecoach does
not currently expect South West Trains to earn a significant profit
during any extension period.
Our direct award proposals sought to build on the extensive
improvements delivered under our operation of the franchise since
1996, providing more benefits for customers, good value for
taxpayers and an appropriate return for investors.
However, despite extensive negotiations, a significant
difference has remained between both parties regarding the
financial evaluation of the proposals. As a result, South West
Trains has been unable to reach an agreement on a direct award.
Nevertheless, as the incumbent operator with nearly 20 years'
experience in growing and improving one of the most complex and
busiest rail franchises in the country, we believe we are in a
strong position to submit a powerful and attractive bid for a new
South West Trains franchise.
In the meantime, we will continue to deliver on our commitments
to government and customers, including the GBP50m package of
investment agreed with the DfT earlier this year as part of a Deed
of Amendment to the existing franchise.
We remain positive about the opportunities in the UK rail
market. Constructive discussions are continuing regarding a direct
award at East Midlands Trains for a period of at least two years.
In addition, we are currently shortlisted for both the Transpennine
Express and East Anglia franchises.
Stagecoach will continue to evaluate opportunities to bid for UK
rail franchises on a case-by-case basis. We seek new opportunities
that offer the right balance of risk and reward, provide scope for
us to improve services to customers, and which are compatible with
maintaining an acceptable balance of the Group's portfolio between
bus and rail businesses.
South West Trains operates around 1,600 trains a day on a
network in the south and south-west of England, serving more than
200 stations. The South West Trains network includes routes through
Hampshire, Surrey, Dorset, Wiltshire, Berkshire, Devon, Somerset,
and Greater London, serving a mixture of commuters and
longer-distance travellers.
ENDS
For further information, please contact:
Stagecoach Group plc www.stagecoachgroup.com
Investors and analysts
Ross Paterson, Finance Director 01738 442111
Bruce Dingwall, Group Financial Controller 01738 442111
Media
Steven Stewart, Director of Communications 01738 442111 or 07764
774680
John Kiely, Smithfield Consultants 020 7360 4900
Notes to Editors
Stagecoach Group
-- Stagecoach Group is an international public transport group,
with extensive operations in the UK, mainland Europe, the United
States and Canada. The Group employs around 39,000 people, and
operates around 13,000 buses, coaches, trains and trams.
-- Stagecoach is one of the UK's biggest bus and coach operators
with around 8,500 buses and coaches on a network stretching from
south-west England to the Highlands and Islands of Scotland.
Low-cost coach service, megabus.com, operates a network of
inter-city services across the UK and mainland Europe.
--Stagecoach is a major UK rail operator, running the South West
Trains, Island Line and East Midlands Trains networks. It has a 49%
shareholding in Virgin Rail Group, which operates the West Coast
rail franchise. It also has a 90% shareholding in Virgin Trains
East Coast, which operates the East Coast rail franchise.
-- Stagecoach operates the Supertram light rail network in
Sheffield.
-- In North America, Stagecoach operates around 2,400 buses and
coaches in the United States and Canada. megabus.com links around
130 key locations in North America. Stagecoach is also involved in
operating commuter, transit, contracted, charter, airport shuttle
and sightseeing services.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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