THE UK Strategic Rail Authority announced on July 11 that it had signed a replacement franchise for South West Trains with incumbent operator Stagecoach Group. Originally planned as a 20-year deal, the franchise will now run for three years from February 1 2004, although there is an option to extend it for a further five. SRA said the subsidy will be £165m to £170m per year, which is around three times the level in the existing franchise agreement. Profit and revenue-sharing agreements are included.

The increased subsidy will fund introduction of 625 new Desiro EMU cars of Classes 450 and 444, together with dedicated maintenance depots at Northam and Strawberry Hill which will be operated by Siemens Transportation Systems as part of a train service provision contract. The Northam Traincare Facility was formally opened on July 2 by Stagecoach Group Chairman Brian Souter (right), and the first Class 450 units are expected to enter service later this month. Other investment proposals include a mid-life refurbishment of the Class 455 inner-suburban EMUs and a £6m programme of fleet reliability improvements. The introduction of ’new state-of-the-art automatic ticket machines’ will also go ahead.

Stagecoach emphasised that the shortening of the franchise term places responsibility for funding and delivering infrastructure projects with SRA, ’leaving SWT to focus on delivering a better train service to passengers’. Plans for the extension of suburban trains to 10-car formations and major remodelling of Clapham Junction and Waterloo stations have been dropped, and the ’growth build’ of 32 five-car Class 450/2 Desiros is now expected to be redeployed on another franchise.

H On July 16 FirstGroup confirmed that it was making a recommended bid to take over GB Railways at around £2·50 per share; part of the cash deal is deferred pending the outcome of current franchise negotiations. GB has been shortlisted for the Greater Anglia franchise, which will merge GB’s Anglia Railways operation with First Great Eastern; FGE’s owner FirstGroup failed to qualify.