UK: The operation of Caledonian Sleeper is to be taken over by Scottish Rail Holdings, an arm’s length company owned by the Scottish government, from June 25.
In 2014 Transport Scotland awarded Serco a contract to operate the night train services between London and Scotland for 15 years from April 1 2015. The contract included a ‘rebase clause’ whereby after seven years Serco could propose alternative financial arrangements for the remaining years.
On October 5 2022 the Scottish government announced that Serco’s contract would end in June 2023, with Managing Director of Serco’s Transport business John Whitehurst saying it had not been able to reach agreement on revised terms.
Options as to what would replace the contract were left open.
’Carefully assessed the options’
On March 2 Scottish Minister for Transport Jenny Gilruth said the Scottish government had ‘carefully assessed the options for successor arrangements in accordance with the current legislative framework and our franchising policy statement’, before deciding that Scottish Rail Holdings would replace Serco.
‘Having regard to continuing uncertainty regarding market conditions, travel behaviours and ongoing UK rail reform, it was decided that a direct award was not viable and that sleeper services should instead be provided by the Scottish government in line with their operator of last resort duty’, she said.
Staff will transfer with their terms and conditions protected.
A similar situation saw the operation of ScotRail services transfer from Abellio to a company owned by the Scottish government in April 2022.
No costed proposal for direct award
Commenting on the announcement, Whitehurst said the Scottish government had not requested a costed proposal for a direct contract award, which would have allowed a comparison with the operator of last resort.
He said a direct award ’would have allowed Scotland to benefit from the expertise of our Serco Transport senior management team who understand this complex and unique hospitality-focussed train operation like no-one else, while also enabling Scottish ministers to be in complete control of the contract’.
He added that ‘since Serco took over the management of the Caledonian Sleeper in 2015, we have brought about massive improvements to every aspect of the service for our employees, our passengers and for Scotland, despite having made significant losses on the contract’.
