Emphasis will ensure that rail services embody the principles of fairness, cooperation and value that underpin other public services, like the NHS


ATWCardiff Queen Street station and the rest of the core Valley Lines will transfer from Network Rail to the Operator and Development Partner for electrification and other enhancements


The Welsh Government wants the next Wales and Borders rail franchise to emulate the ethos of the NHS. The operator’s profits will be capped and key areas such as ticketing and stations potentially managed by the government.

Passenger Transport understands that bidders’ proposals to grow revenue will account for a relatively small proportion of the marks during evaluation of bids. This is on the basis that the franchise will inevitably require substantial revenue support. Officials believe that with only around one-third of the existing franchise’s revenue coming from fares, the focus should be less on maximising revenue than on ensuring that rail services embody the principles of fairness, cooperation and value that underpin other public services, including the NHS.

Four preferred bidders are now beginning a process of dialogue with the Welsh Government over the new franchise, which will include vertical integration on the core Valley Lines north of Cardiff. Network Rail will transfer the infrastructure for the government’s chosen Operator and Development Partner (ODP) to electrify and modernise. Separate contracts will be awarded for the civil engineering works.

Abellio, Arriva, Keolis with Amey, and MTR Corporation are the four bidders for the ODP contract, which is due to begin when Arriva Trains Wales’ franchise ends in October 2018. Previously the government kept open the option of awarding two contracts, one for the Valley Lines and one for the rest of the network, which includes long inter-urban routes and several rural services. It now intends to select only one ODP.

Bidders will set out how they would introduce new rolling stock across the franchise. They will propose what they believe is the best combination of heavy and light rail, and the most suitable form of light rail for the core Valley Lines. New trains are expected to provide better value for money than the current fleet, which is dominated by ex-British Rail DMUs.

Bidders will also be expected to show how they would provide rolling stock to cover the period from January 1, 2020, until the introduction of new trains. The existing ex-BR fleet does not comply with access regulations which will be mandatory after 2019, and concerns have been voiced by industry figures over the Welsh Government’s inaction on modifying vehicles. However, it is understood that the government will not apply for a temporary derogation because it is confident that sufficient compliant stock, including cascaded units, will be available by 2020.

The government has established its own company, Transport for Wales, to manage the franchise procurement. Eventually it is expected to operate the trains itself, and to be directly involved in bus services. Welsh infrastructure secretary Ken Skates said the UK government had refused to amend legislation in order that public sector bodies, such as TfW, could act as franchisees.

“We cannot bar for-profit operators coming forward to run some elements,” he said. “Our plan is that Transport for Wales will only let those contracts that it has to on a commercial basis. The profits from those services will be at a capped margin, with excess profits reinvested back into the wider transport system.”

Welsh first minister Carwyn Jones said that “for reasons that are not fathomable in logic” Wales, unlike Scotland, was prevented from having a rail franchise “run by a public body or public agency”.

The government will not necessarily require the ODP to take on all of the elements in ATW’s existing franchise. Community groups or local suppliers may be invited to play a role in station management and car park operation. TfW may manage activities such as marketing and ticketing. The longer-term aim is for TfW to become an organisation comparable with Transport for London.


This article appears inside the latest issue of Passenger Transport.

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