Thursday, 6 December 2012

Virgin gets 23 month extension on ICWC franchise

So Virgin gets a 23 month extension to the InterCity West Coast franchise.

  • Revenue and cost remains with DfT (so risk transfer went well then).
  •  Virgin to get a guaranteed 1% of revenues under 'management contract'
  • The mad midi franchise of two years that was to follow this extension will now not take place.

Here the DfT press release...

Virgin Trains to run improved West Coast services

Rail passengers will experience better services including 28,000 more seats a day under an agreement announced today for Virgin Trains to continue operating rail services on the West Coast Main Line.

The new franchise agreement will run for up to 23 months after which the West Coast Main Line will be let under a long-term franchise.

It coincides with the early completion of a Government-backed deal to roll out 106 new Pendolino carriages, providing passengers with four new 11-carriage trains and lengthening 31 existing trains from nine carriages to 11. A new hourly service between London and Glasgow will also be introduced.

Patrick McLoughlin said:

“We are determined to ensure not only that passengers continue to experience the same levels of service they have in the past, but that services improve. There will be a new hourly service linking Glasgow and London and we will also work with Virgin Trains to explore other service improvements.

“I am also extremely pleased that passengers will benefit from up to 28,000 more seats daily thanks to the delivery of 106 new Pendolino carriages onto the West Coast Main Line which has happened on budget and ahead of schedule.”

Passengers travelling on Virgin Trains will also find it easier to claim compensation if their train is severely delayed thanks to plans for Virgin Trains to introduce an improved Passenger’s Charter incorporating a Delay Repay scheme from 1 April 2013, subject to agreement.

Notes to Editors

1. The 23 month franchise will run from 9 December 2012 until 9 November 2014 after which the West Coast Main Line will be let under a long-term franchise. The Department for Transport (DfT) will be able to shorten this period by up to six months if a subsequent franchise can be let on a shorter timescale.

2. The franchise will operate as a management contract with both revenue and cost risk being borne by the DfT. In return Virgin Rail Group (VRG) will receive a margin of 1% on revenue for operating services. The franchise also makes a provision for the DfT and VRG to agree revised commercial terms that would see VRG take greater revenue and cost risk in the period to 9 November 2014.

3. The 106 Pendolino carriages project has been delivered on budget and ahead of schedule and has resulted from a successful collaboration between the Department for Transport, Virgin Trains, Alstom, Angel Trains and Network Rail.

- ENDS -