Posted 7th August 2019 | 2 Comments

South Eastern franchise competition cancelled

THE Department for Transport has cancelled the competition for the next South Eastern franchise, and confirmed that the existing contract with Govia will now continue until April 2020.

The decision to cancel the bidding has come only days after the High Court rejected an attempt by the DfT to quash legal action being brought by Stagecoach and Arriva. Arriva alone is known to be seeking at least £200 million after its bid for East Midlands was rejected in April.

A further doubt over the terms of any future franchise contract has been introduced by the impending Williams Rail Review, which is due to be published later this year.

The Department for Transport said: ‘We have taken the decision to cancel the South Eastern franchise competition.

‘This follows significant concerns that continuing the competition process would lead to additional costs incurred to the taxpayer, with no certainty that this would deliver envisaged benefits for passengers in a timely fashion.

’The Department will use this period to develop a solution that delivers the capacity and performance benefits that passengers are expecting, and ensure that the recommendations of the Williams Review can be implemented.’

The unions have been bitterly critical. Mick Cash of the RMT said: ‘The cancellation of the competition for the Southeastern franchise shows yet again that the whole privatised rail system is broken and coming apart at the seams. The chaos of short-term extensions to get the Government off the hook is a measure of just how rotten their rail policies are,’ while Manual Cortes of TSSA said: ‘This amounts to a vote of no confidence in the whole franchising process and an admission by the Government that competition on our railways simply does not work.’

The DfT had already extended the Govia South Eastern contract in June, after several months of talks yielded an agreement over the terms of an extension just ten days before the existing franchise expired.

The contract was extended to November, with provision for a further extension to April 2020, which the DfT has now activated.

After the Stagecoach bid for South Eastern was ruled ‘non-compliant’ over pension risks in April, only Govia and a consortium of Abellio, East Japan Railway and Mitsui remained. Apart from Stagecoach, a fourth bid from Trenitalia had also been shortlisted, but Trenitalia withdrew from the competition in August 2017.

One benefit for Southeastern passengers in the meantime will be improved compensation for late-running trains. Depay Repay 15 will be introduced later this year. At the moment, passengers on Southeastern only start to be entitled to compensation if their train is at least 30 minutes late.

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • Melvyn Windebank, Canvey Island, Essex

    The replacement of Chris Grayling at least means the old feud between Grayling and Khan is over .

    While Boris Johnson as Mayor of London campaigned for more London rail services to be transferred to Mayoral/ TFL control with South Eastern being near the top of tge list given the state of trains , stations etc on the network.

    Transfer of Southeastern services could allow extension of existing East London Line service from New Cross towards the Bexleyheath loop thus removing some trains from the route to Charing Cross via London Bridge releasing capacity for more longer distance trains from Kent .

    Southeastern passengers would also benefit from a fares cut with fares brought into alignment with the frozen TFL fares Mayor Khan has pursued.

    Longer term we have the breakup of the TSGN concession with completion of Thameslink meaning London services on both Southern and Southeastern could transfer to. TFL and maybe allow reconfigured services to create a 3rd rail equivalent to the Underground south of the river!

  • Chris Jones-Bridger, Buckley Flintshire

    Hardly unexpected given the turmoil that the franchise process has descended into. Perhaps now it is time to finally bury the mantra that has been mouthed by successive transport ministers that franchising has been delivering value for taxpayers money. Vast sums have been expended by both the exchequer & the bidding companies that would have been far better spent delivering investment in the industry.

    Prior to the tenure of the last transport minister rail policy appeared to be enjoying a relative period of consensus. The last three years have been a litany of progressive retrenchment & failure. While the DfT is clearly under new ministerial oversight given the overall distractions in the political world I think there is little likelihood of seeing any positive progress out of the current mess. While much has been anticipated from the Williams Review little has so far emerged to suggest that the fundamental problems regarding the industry's structure will be addressed just more of the same with some decorative deck chair adjustment.

    A vacuum now exists where strategy is urgently required. While the trains will still run capital investment much needed to implement the improvements required to meet the challenges of increasing demand are being kicked further into the future.