UK: Transport for London has selected the First Rail London Ltd subsidiary of FirstGroup for the next concession to operate London Overground inner-suburban passenger services.
The preferred bidder was announced on December 10 and the standstill period before the formal award of ends on December 18.
FRLL is scheduled to take over from current London Overground operator Arriva Rail London on May 3 2026. The contract is to run for an initial eight-year term, with an option to extend for up to two additional years at TfL’s discretion.
TfL will specify the service levels, with FRLL responsible for train services and station management. TfL retains all passenger revenue risk, and some cost risk for electricity pricing, regulatory charges and inflation protection up to an agreed amount.
FirstGroup said the contract is estimated to have a value of around £3bn over eight years plus the optional extension.
The contract includes a profit margin on concession payments, with the opportunity to earn additional fees if the operator achieves greater levels of operational performance, customer service delivery, customer satisfaction and reduced ticketless travel.
FirstGroup is obliged to retain a £30m Performance Bond and a parent company guarantee of £80m.
Plans for the next concession
FirstGroup said it will make use of its ‘long-standing expertise and rail services capabilities’ to work alongside TfL to deliver improvements set out in the contract.
Plans include the provision of additional peak-time trains on the Mildmay Line from May 2026, with shuttle services between Clapham Junction and Shepherd’s Bush during peak hours to provide more capacity.
There will be more frequent trains on the Windrush Line from December 2026, with services through the core section of increasing to 18 trains/h.
Help points and CCTV will be upgraded, and there will be an expansion of digital screens to display live travel updates for stations and nearby interchange services such as buses across all operator-managed stations.
FRLL will collaborate with infrastructure manager Network Rail and rolling stock supplier Alstom to maintain performance and customer satisfaction. There will be ‘targeted upgrades’ of the Mildmay Line infrastructure to boost performance.
Investment in people and technology will aim to improve reliability, manage disruption and provide better customer information
Work to improve accessibility will continue in partnership with advocacy groups.
Customers at its heart
‘London Overground is one of the most popular parts of our transport network, and this new concession puts customers at its heart, helping make the service even better’, said David Thomas, Head of Concession for London Overground at TfL.
‘London Overground has greatly improved connectivity in London, with around four million passengers now using the service every week’, said FirstGroup CEO Graham Sutherland.
‘We are an experienced and trusted partner in public transport and look forward to building on our relationship with TfL, for whom we already operate buses, trams and the London Cable Car. Our successful bid for this contract represents another significant step in our strategy to diversify and grow our portfolio, and we will continue to evaluate further growth opportunities like this.’
‘Outrageous decision’
While London Overground and Elizabeth Line services are part of the National Rail network, the operating contracts are awarded by TfL rather than the national Department for Transport, and as a result they are not transitioning to the public sector under the government’s rail reform plans.
Commenting on the contract, General Secretary of the RMT trade union Eddie Dempsey said ‘despite the Mayor [of London] saying he backs public ownership of rail, the London Overground is being re-privatised on a lucrative eight-year deal that puts profit before passengers.
‘It’s beyond belief, especially when a Labour government is bringing the railways back into public hands. This is another outrageous decision, landing on the same day we learn that cleaning staff are to be outsourced again despite previous commitments to bring them in-house.
‘Transport in London is being turned into a haven for exploitative outsourcing and privatisation and RMT will not accept it.
‘We will oppose any attempt by TfL to secure devolved control over publicly owned Great British Railways services while it continues down this path.’
