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South Eastern franchise competition cancelled

THE Department for Transport has cancelled the competition for the next South Eastern franchise, and confirmed that the existing contract with Govia will now continue until April 2020.

The decision to cancel the bidding has come only days after the High Court rejected an attempt by the DfT to quash legal action being brought by Stagecoach and Arriva. Arriva alone is known to be seeking at least £200 million after its bid for East Midlands was rejected in April.

A further doubt over the terms of any future franchise contract has been introduced by the impending Williams Rail Review, which is due to be published later this year.

The Department for Transport said: ‘We have taken the decision to cancel the South Eastern franchise competition.

‘This follows significant concerns that continuing the competition process would lead to additional costs incurred to the taxpayer, with no certainty that this would deliver envisaged benefits for passengers in a timely fashion.

’The Department will use this period to develop a solution that delivers the capacity and performance benefits that passengers are expecting, and ensure that the recommendations of the Williams Review can be implemented.’

The unions have been bitterly critical. Mick Cash of the RMT said: ‘The cancellation of the competition for the Southeastern franchise shows yet again that the whole privatised rail system is broken and coming apart at the seams. The chaos of short-term extensions to get the Government off the hook is a measure of just how rotten their rail policies are,’ while Manual Cortes of TSSA said: ‘This amounts to a vote of no confidence in the whole franchising process and an admission by the Government that competition on our railways simply does not work.’

The DfT had already extended the Govia South Eastern contract in June, after several months of talks yielded an agreement over the terms of an extension just ten days before the existing franchise expired.

The contract was extended to November, with provision for a further extension to April 2020, which the DfT has now activated.

After the Stagecoach bid for South Eastern was ruled ‘non-compliant’ over pension risks in April, only Govia and a consortium of Abellio, East Japan Railway and Mitsui remained. Apart from Stagecoach, a fourth bid from Trenitalia had also been shortlisted, but Trenitalia withdrew from the competition in August 2017.

One benefit for Southeastern passengers in the meantime will be improved compensation for late-running trains. Depay Repay 15 will be introduced later this year. At the moment, passengers on Southeastern only start to be entitled to compensation if their train is at least 30 minutes late.

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