Virgin and Stagecoach out of bidding for Sleeper

• Scotrail and Dutch outfit Abellio only runners left

Virgin Trains and Stagecoach have told The Scotsman they will not compete for the 15-year franchise for the Scotland-London overnight trains.

The news could put in doubt Scottish Government’s plans for the loss-making service to be run separately from the ScotRail franchise for the first time, if insufficiently high quality bids are lodged.

Transport Scotland said it would seek expressions of interest from potential bidders next month, with the new franchise due to start in April 2015.

Virgin Trains said it did not want to be “left with” running just the sleepers if it failed to both retain its west coast main line franchise and win the upcoming competition for the east coast main line contract.

Spokesman Damien Henderson said: “We did look at the Caledonian Sleeper franchise but made a decision not to bid for it.

“The reason is the risk of being unsuccessful in bidding for the east or west coast franchises and being left with the sleepers, which is a relatively small service and would not be attractive to hold alone. It could be an attractive option alongside a major cross-Border franchise.”

Perth-based Stagecoach, which jointly runs the west coast franchise with Virgin, and Megabus’ “sleeper coaches” between Glasgow and London, said: “We are not pursuing the Caledonian Sleeper franchise opportunity.”

Dutch railways offshoot Abellio is the only firm to have announced its intention to bid for the sleepers, although Aberdeen-based FirstGroup, which currently runs the service as part of ScotRail, is also expected to bid.

Rail expert Professor Iain Docherty said there was barely a contest left.

The professor of public policy and governance at Glasgow University said: “I’m a big fan of the separate sleeper franchise concept. The lack of enthusiastic bidders demonstrates the conservatism of the industry rather than the concept being wrong.”

The sleepers run six night a week between Edinburgh, Glasgow, Aberdeen, Inverness Fort William and London. They carry 270,000 passengers a year at a £5m loss.

“Emblem for Scotland”

A Scottish Government consultation on the next ScotRail franchise included an option to scrap the sleepers, prompting the UK Government to pledge £50m to upgrade the service. That was then matched with £50m from Scottish ministers.

The Scottish Government has since said it is committed to the service, which it wants to become “emblematic of Scotland”. However, bidders will be left to suggest how this can be achieved, such as by upgrading the coaches, which are up to 40 years old.

A spokeswoman for Transport Scotland said:

“The Caledonian Sleeper franchise is an exciting market opportunity which has already attracted a great deal of attention in the rail industry.

“While we cannot discuss any potential bidders, we can say that we have had significant engagement with potential bidders who have registered an interest following the prior information notice we issued last year.

“The proposal is to let a separate 15-year franchise and this, coupled with over £100m of investment, is intended to give this historic service the 21st century future it deserves.

“We are looking to bidders for innovative approaches in the development of the passenger product, as well as in marketing and retailing, and are very excited by some of the discussions that have already taken place.

“We are maintaining the option to reincorporate the Sleeper service in the main ScotRail franchise procurement as a prudent contingency should we not be satisfied with the quality or value of bids received for the Sleeper franchise.

“So the future of the sleeper service and our commitment to invest in its future are secure under any scenario.”