Serco loses Docklands franchise to Keolis

Outsourcing group Serco has failed in its bid to continue running the Docklands Light Railways (DLR) franchise, which it has operated since 1997.

Transport for London has chosen French company Keolis to run the route until 2021, with an option for this to be extended until 2023. The new DLR contract will start on 7 December.

Serco, headed by former Aggreko chief executive Rupert Soames, recently won the franchise to run Caledonian Sleeper overnight train services between Scotland and London. It said the DLR deal generated revenues of about £90 million last year, or 2 per cent of its total, “at a margin that was significantly below the average level the group achieves on its contracts”.

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Perth-based transport giant Stagecoach had also been in the running for the route and a spokesman for the “disappointed” group said its bid would have delivered “good value to the taxpayer”.

The DLR began operating in 1987, with 11 trains serving 15 stations and in its first year of operation it carried 6.7 million people. The railway now has 45 stations and carried a record-breaking 101 million passengers last year.