Stagecoach loses SWT franchise to rival FirstGroup

Aberdeen's FirstGroup and China's MTR will take over the South West Trains route from Perth-based Stagecoach. Picture: Andrew Matthews/PA Wire

Aberdeen's FirstGroup and China's MTR will take over the South West Trains route from Perth-based Stagecoach. Picture: Andrew Matthews/PA Wire

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Perth-based Stagecoach was dealt a blow yesterday when the UK government switched the group’s flagship rail operation to a joint venture of its leading Scottish rival FirstGroup and a Chinese transport operator.

Sir Brian Souter’s group, which has run South West Trains (SWT) out of London Waterloo station since the subsidiary became the UK’s first rail privatisation in February 1996, said it was “disappointed” at the decision.

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Stagecoach chief executive Martin Griffiths said: “We are proud to have operated the network under the South West Trains brand for more than 20 years and we are disappointed that we have been unsuccessful in our strong bid for the new franchise.

“Over the past two decades, we have delivered real improvements for our customers right across the network. That success has been built on fantastic people, detailed knowledge of the business and strong relationships with our stakeholders and railway partners. But we have never thought our job was finished.”

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The change of operator to Aberdeen-based FirstGroup and Hong Kong-based MTR kicks in on 20 August until at least August 2024.

FirstGroup and MTR, which operates the Hong Kong ­Metro, will invest a total of £1.2 billion in SWT, which runs what is Britain’s busiest ­commuter rail services across Surrey, Hampshire, Dorset and parts of Berkshire to and from Waterloo.

However, the RMT union hit out at the franchise switch, saying it was concerned for the potential impact on its members and the safety of passengers. It also claimed that the Chinese state-owned MTR was “set to make a killing at the British taxpayers’ expense”.

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Tim O’Toole, chief executive of FirstGroup, said he was “delighted” that the joint venture – 70 per cent owned by the British company – had been selected. He said: “Our successful bid will deliver the tangible improvements that customers and stakeholders have told us they want from this franchise.

“Passengers can look ­forward to new and better trains, more seats and services, quicker journey times, improved stations and more flexible fare options.”

The new franchise owners have pledged 400 extra Sunday trains across the network from December 2018, and 52,000 more peak seats per day at Waterloo station by December 2020. Every year 100 million people travel to and from London’s busiest and biggest rail terminus.

The new operators have promised £90m of investment in stations, and a £2.6m annual fund to support community projects across the network.

Stagecoach, which is also a major UK bus operator, will still run the East Midlands and Isle of Wight-based Island Line rail networks. The company also operates the major West Coast and East Coast franchises as a joint venture with Virgin Rail Group and Virgin Trains East Coast respectively.

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