Contract win makes Dutch group the UK’s second largest train operator as it emerges that quality played a significant part in the franchise award



Abellio has won the new ScotRail franchise in a tight contest ahead of National Express and FirstGroup. MTR and Arriva were the other two bidders.

The 10-year contract awarded by Transport Scotland shores up Abellio’s position in the UK rail industry, but means First’s rail business has been further eroded after previously losing its First Capital Connect and Caledonian sleeper contracts this summer.

Abellio said the win means it is now the second largest UK train operator after Go-Ahead. It also gives the international arm of the Dutch state railways, whose Northern and Greater Anglia franchises expire in 2016, a secure presence in the industry. After being awarded the franchise, chief executive Jeff Hoogesteger said it was “a huge day for Abellio”.

Core aspects of the programme for the new franchise will include Abellio increasing the number of carriages by 23%. New trains will be introduced on the Edinburgh-Glasgow and Stirling-Alloa-Dunblane route after the current electrification projects are completed. On routes from Glasgow and Edinburgh to Inverness and Aberdeen, the current Class 170 fleet will be replaced by refurbished HSTs, cascaded after new IEP stock is introduced at the East Coast and Great Western franchises.

Other major initiatives include refurbished trains on ‘scenic lines’, expansion of smart ticketing across the franchise, measures to provide better value fares, and a range of initiatives to address wider Scottish government social policies.

A Transport Scotland spokeswoman told Passenger Transport that quality had also been a more significant factor when assessing bids than in any previous UK competition by a considerable distance. Bids were scored 35% on quality and 65% on price. Industry rumours suggest National Express and Abellio were the final two bidders competing for the franchise and bids were close on price, implying quality scores were a key factor in the franchise award.

Differences in Abellio’s approach which are likely to have strengthened its quality rating include conducting a full OJEU procurement process for the supply and funding of the new electric trains, enabling it to give Transport Scotland confidence that its pricing for the new fleet was realistic and the specification for the trains will be met.

Abellio’s bid will also have been able to draw on its parent company’s experience of implementing a national public transport smartcard in the Netherlands. Transport Scotland is aiming to introduce a national scheme, and intends that half of ScotRail journeys will be made on smartcard by 2019.

FirstGroup finance director Chris Surch attempted to play down the loss. He said First was disappointed not to have retained a franchise where it had “delivered significant improvements on every measurable score” during its tenure, but insisted that, financially, it was not a significant blow. He told City analysts that ScotRail had been contributing £13-14m annual profit which put it “towards the lower end of a small TOC”.


Abellio moves to Glasgow

Abellio will move its UK headquarters to Scotland after starting to operate the ScotRail franchise in April. Fifty UK head office staff will be based in Glasgow, sharing premises with 150 ScotRail head office staff.

The offer to move HQ was made to Transport Scotland and Scottish ministers as part of the company’s bid for the franchise. It was designed to increase the quality ranking of Abellio’s bid. Abellio will also retain its office in London.


This article appears inside the latest issue of Passenger Transport.

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