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Stagecoach and SNCF lead Virgin-branded bid for HS2 operations

25 Apr 2017

UK: On April 24 a consortium led by Stagecoach Group with SNCF and Virgin Holdings as minority partners submitted a formal expression of interest in bidding for the Department for Transport’s upcoming West Coast Partnership franchise.

The WCP franchise is scheduled to begin in May 2019. The winner will take over the existing InterCity West Coast business and operate trains over the first phase of High Speed 2 from its planned opening in 2026 for a period of ‘three to five years’, according to DfT.

Currently Virgin (51%) and Stagecoach (49%) operate inter-city services under the Virgin Trains brand on the West Coast Main Line between London, Birmingham, northwest England and Scotland, having done so since 1997 under a series of franchises and management contracts. Passenger-journeys have grown from approximately 15 million/year in 1997 to 36 million in 2015-16. Its direct award agreement is being extended by DfT until April 2019.

One stipulation from the government is that the winning bidder for WCP must have experience of operating dedicated high speed services over purpose-built infrastructure, hence the need for Stagecoach and Virgin to find an international partner. It is understood that talks had been held with Spanish national operator RENFE, but no agreement could be reached.

While the existing Virgin West Coast business has Virgin Holdings as the majority shareholder, the composition of the WCP bid team is Stagecoach 50%, SNCF 30% and Virgin Holdings 20%. Stagecoach also holds a 90% share of the Virgin Trains East Coast business, which operates the franchise to run inter-city services between London and Edinburgh.

‘I’m delighted that SNCF has come on board, and together we will put forward what we hope is the winning bid for the next West Coast, and first HS2, franchise’, said Patrick McCall, Co-Chairman of Virgin Trains. ‘We’re thrilled about the prospect of continuing and improving this record of innovation with the UK’s first long distance high speed network, as well as with our friends and communities along the West Coast Main Line.’

‘The new franchise has an important role to play in delivering the improvements and space on our railway that can support our communities and economy’, added Martin Griffiths, Chief Executive of Stagecoach Group. ‘Together, we have a very strong track record of working effectively with other rail partners and infrastructure providers, as well as using cutting edge technology to achieve a step change in customer service.’

‘We are world leaders in high speed rail’, commented SNCF President Guillaume Pepy, adding that ‘SNCF has a long-standing commitment of working in partnership with British companies, using their local knowledge and sharing our expertise and experience. We are delighted to announce this next step in our commitment to UK rail, working with partners who have demonstrated their own expertise in long distance rail services and are highly regarded in the industry.’

Following the submission of an expression of interest, the partners said that they would now focus on preparing for the WCP invitation to tender, which is expected to be issued by the end of the year.

For detailed analysis of the UK market, read Rail Business Intelligence