Go-Ahead subsidiary Go North West has been named as the winner of the first two major contracts to franchise bus services in Greater Manchester

 
Andy Burnham reveals the first franchise winners

 
The first step towards dismantling deregulation in Greater Manchester took place on December 23 when Andy Burnham, the region’s mayor, announced the winners of the first contracts under the region’s new franchising regime.

Speaking at a special event to reveal the winners, the mayor said locally controlled bus services were fundamental to the Bee Network vision for a better public transport network for all and Manchester was once again blazing a trail.

Franchising will enable us to better integrate services as part of a joined-up network, with simpler fares and ticketing, a price cap so no one pays more than they need to, a better customer service offer and a single look for the whole network

He continued: “Franchising will enable us to better integrate services as part of a joined-up network, with simpler fares and ticketing, a price cap so no one pays more than they need to, a better customer service offer and a single look for the whole network.”

The contracts relate to so-called ‘Sub-Area A’, covering the north west of the region and includes Wigan, Bolton and parts of Bury and Salford. The new Bee Network in those areas will commence on September 24.

As exclusively revealed in the last issue of Passenger Transport, Go-Ahead was a big beneficiary of the process with its Go North West business winning the first two large franchise contracts in Wigan and Bolton. Managing director Nigel Featham said he was extremely proud his company had been chosen to run the first franchises.

“We are absolutely committed to providing the best possible service and can’t wait to get started,” he said. “This new era of public transport will not only represent major change for passengers, but the thousands of people working to provide these vital services.
“While change can be exciting and full of new possibilities, it can also be unsettling and I want to reassure staff working at the depots to be run by Go North West from next September that we will be working hard to ensure a smooth transition.”

Rotala-owned Diamond Bus lost out on both of the large contracts, but it did manage to secure seven small contracts. Transport for Greater Manchester (TfGM) has confirmed to Passenger Transport that the final two small contracts will go to Go North West.

“The procurement process included a restriction that bidders could be awarded a maximum of seven small franchises,” said a spokesperson. “As a result, the two remaining small franchises are being incorporated within one of the large franchise agreements.”

Stagecoach reaction

Stagecoach has expressed disappointment that it has not been awarded any contracts as part of the first tranche of bus franchising. Chief executive Martin Griffiths said the group was “liaising with the combined authority to understand the areas where our bid fell short”.

“We will work collaboratively with the successful bidder for Wigan to ensure a smooth transition for our employees and for the customers who depend on bus services in the area,” he said.

As a major bus operator with several decades of experience serving communities across Greater Manchester with high quality services, we look forward to participating in other forthcoming franchise competitions

“As a major bus operator with several decades of experience serving communities across Greater Manchester with high quality services, we look forward to participating in other forthcoming franchise competitions.”

However, it appears that no agreement has yet been reached to sell the group’s Wigan depot to TfGM. A Stagecoach spokesperson confirmed to Passenger Transport that discussions over such an arrangement is still ongoing with the Greater Manchester Combined Authority (GMCA). TfGM also refused to be drawn on these negotiations, but it does have a ‘Plan B’ if the talks fail with plans on the drawing board for a new purpose-built 121-bus depot at Martland Park in Wigan (PT274). Planning permission for that scheme is still awaited.

Rotala sanguine

Bob Dunn, managing director of Rotala’s Diamond Bus operation in the north west of England, said he was pleased his company had secured seven of the small franchises. “In 2023, in partnership with the Mayor, TfGM and GMCA, we will be stepping up the quality on over 40 bus routes in Greater Manchester, supported by our team of over 250 colleagues and 80 buses,” he said.

In an announcement to investors, Rotala went further, revealing the contracts have a combined annual revenue of approximately £18.7m and each are for a period of between three and five years. The AIM-listed group also revealed it had agreed in principle to dispose of its Bolton depot and the majority of the bus fleet to the GMCA.

When the sale concludes, the depot and depot assets will be subject to a short lease with nominal rent to support the continued operation of services from the depot until the formal commencement of the Bolton area franchise.

The vehicles will pass into the so-called ‘notional asset pool’ ahead of the start of franchising with the vehicles then allocated by TfGM to the winners of the large and small franchises. These vehicles will then be acquired by the successful bidders at an
agreed price.

Rotala revealed it will receive £30.1m in cash as part of these transactions. It added the total unaudited net book value of these assets, at their respective dates of sale, is expected to be approximately £22.7m. Mortgages and hire purchase on the vehicles involved in the transactions will be repaid with the proceeds but the group adds its contracts for the seven small franchises require it to purchase 67 new buses, all of which will be financed by new hire purchase debt.

The small franchise contracts will be operated from a brand new purpose-built depot in Eccles. Diamond Bus North West already has a small depot there, but Rotala said this did not have the capacity to house around 100 vehicles needed for the new contracts. While the new Eccles depot is constructed, the group said it has secured temporary parking facilities nearby.

Going electric

And speaking of vehicles, Burnham also used the franchise announcement to reveal an order for a further 50 electric buses has been placed by TfGM. It follows an initial order for 50 vehicles to operate as part of the Wigan and Bolton franchises that was announced in the autumn of 2022. The additional buses will enter service in parts of Bury, Rochdale and Oldham when the second tranche of franchising launches there in April 2024.

The buses will be funded from the government’s ‘City Region Sustainable Transport Settlement’ (CRSTS), following Greater Manchester’s award of £1.07bn last year, £438m of which is already ringfenced to improve buses, routes and services.

Hopes for the future

TfGM said while the move to franchising will better enable integrated fares across other modes, bus passengers have been benefitting from new lower fares since September. It added patronage on commercial bus services in Greater Manchester was now also at the highest level since the onset of the pandemic.

With the move to the first franchises now confirmed for September 24, all eyes will be on whether TfGM can deliver.

 
This story appears in the latest issue of Passenger Transport.

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