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Serco wins contract to run Caledonian sleeper service Serco wins contract to run Caledonian sleeper service
(about 4 hours later)
Serco, the outsourcing company that runs railways, prisons and GP out-of-hours services, has been given another piece of the country's infrastructure to manage: the much-loved Caledonian sleeper service connecting London and the Highlands. Serco, the outsourcing company which runs railways, prisons and GP out-of-hours services, has been given another piece of the country's infrastructure to manage: the much-loved Caledonian sleeper service connecting London and the Highlands, after Scotland's transport authority awarded the company a 15-year franchise to run the sleeper service from April 2015.
Scotland's transport authority has awarded the company a 15-year franchise to run the sleeper service from April 2015. Transport minister Keith Brown said the successful bid "reflected the Scottish government's objectives to transform this iconic Scottish rail service. The contract secures the future of the Caledonian sleeper, ensuring it delivers a service fit for the 21st century."
The decision is a blow to its rival bidder the Aberdeen-based First Group, which currently operates the service as part of a bigger contract to run ScotRail. Arriva ~also lost out on the sleeper contract. But the RMT rail union said Serco was "a company with a truly shocking track record in the delivery of public services" and should never have been considered to run the service.
The decision is a blow to its rival bidder, the Aberdeen-based First Group, which currently operates the service as part of a bigger contract to run ScotRail. Arriva also lost out on the sleeper contract.
The Scottish government decided to split the sleeper contract from the main ScotRail franchise after a recent review of transport policy. Serco estimates that it will earn £800m from the 15-year deal, including £180m from franchise payments.The Scottish government decided to split the sleeper contract from the main ScotRail franchise after a recent review of transport policy. Serco estimates that it will earn £800m from the 15-year deal, including £180m from franchise payments.
The firm, which already runs luxury train services in Australia, landed the deal with a promise to create hotel-style cabins with ensuite bathrooms, as well as a top-notch dining service serving Scottish produce.The firm, which already runs luxury train services in Australia, landed the deal with a promise to create hotel-style cabins with ensuite bathrooms, as well as a top-notch dining service serving Scottish produce.
More than £100m will be spent on new rolling stock, which will come on track in the summer of 2018. Around £60m will come from the Scottish government, which has promised trains that are "emblematic of Scotland". Serco said it would be spending around £40m on trains under the terms of the franchise agreement. More than £100m will be spent on 72 "state-of-the-art" carriages for four trains, which will come on track in the summer of 2018. Around £60m will come from the Scottish government, which has promised trains that are "emblematic of Scotland". Serco said it would be spending around £40m on trains under the terms of the franchise agreement.
Serco chief executive Rupert Soames has been an outspoken critic of Scottish independence in his previous role at Aggreko, but the company said it has no plans to invoke the seven-year break clause in the event of a 'yes' vote in September.
The company said it had no plans to cut staff, while unions vowed "fierce resistance" in the event of threats to jobs and conditions.
The sleeper service has seen a resurgence in popularity in recent years, with around 270,000 passengers a year taking the train, which links London, Edinburgh, Glasgow, Fort William, Inverness and Aberdeen.The sleeper service has seen a resurgence in popularity in recent years, with around 270,000 passengers a year taking the train, which links London, Edinburgh, Glasgow, Fort William, Inverness and Aberdeen.
The contract is a fillip for Serco, which has been dogged by scandals, from overcharging the government for tagging prisoners to claims that it failed to investigate sexual abuse allegations at an immigrant detention centre.The contract is a fillip for Serco, which has been dogged by scandals, from overcharging the government for tagging prisoners to claims that it failed to investigate sexual abuse allegations at an immigrant detention centre.
Serco's running of the Northlink ferry service, connecting the Orkney and Shetland Islands to the mainland, has also been come under fire after engine failure led to a temporary suspension of the "lifeline" service last year. Serco's running of the Northlink ferry service, connecting the Orkney and Shetland Islands to the mainland, has also come under fire after engine failure led to a temporary suspension of the "lifeline" service last year.
The company, which employs 120,000 people in more than 30 countries, has a vast transport business: it runs the Docklands Light Railway and the "Boris" bikes hire scheme in London and holds the UK's largest passenger rail franchise with Northern Rail in partnership with the Dutch company Abellio. Beyond the UK, it operates the Dubai metro system, as well as major railway routes in India and Australia.The company, which employs 120,000 people in more than 30 countries, has a vast transport business: it runs the Docklands Light Railway and the "Boris" bikes hire scheme in London and holds the UK's largest passenger rail franchise with Northern Rail in partnership with the Dutch company Abellio. Beyond the UK, it operates the Dubai metro system, as well as major railway routes in India and Australia.
Serco's chief executive, Rupert Soames, who took up his post this month, said: "I am delighted that we can use this unique blend of expertise to transform the iconic Caledonian sleeper into a modern, high-quality hospitality service to make Scotland proud. Serco has a very constructive relationship with many parts of Scottish government and already operates essential public transport and many other services." The RMT rail union said it was deeply concerned about the decision to award the franchise to Serco. "Quite frankly, with their appalling list of failures in the UK and globally they should never have even been considered as contenders for the Scottish sleeper service. The logical option of public ownership was not even looked at," said the RMT's acting general secretary Mick Cash.
First Group said the sleeper service accounted for just 2% of its annual revenues and its medium-term targets were unchanged. It added that it was shortlisted for a number of other rail franchises with the aim of maintaining its earnings. "We will continue to provide sleeper passengers with the best possible service until the new franchise commences, and will work closely with the new operator to ensure a seamless handover," said the First Group chief executive, Tim O'Toole. Manuel Cortes of the TSSA union said: "This decision flies in the face of everything Alex Salmond has been saying about an independent, financially strong Scotland. He has taken the contract away from a Scots firm and handed it to an English based firm which will be given a £60m subsidy to build new trains in Spain."
Soames, who took up his post this month, said: "I am delighted that we can use this unique blend of expertise to transform the iconic Caledonian sleeper into a modern, high-quality hospitality service to make Scotland proud. Serco has a very constructive relationship with many parts of Scottish government and already operates essential public transport and many other services."
First Group said the sleeper service accounted for just 2% of First ScotRail's annual revenues and its medium-term targets were unchanged. It added that it was shortlisted for a number of other rail franchises with the aim of maintaining its earnings. The company found out last week it had lost out in the bid to run the Thameslink rail link, one of the UK's busiest commuter routes.
"We will continue to provide sleeper passengers with the best possible service until the new franchise commences, and will work closely with the new operator to ensure a seamless handover," said the First Group chief executive, Tim O'Toole.
The ScotRail franchise is also up for renewal, with the winning bidder to be announced in the autumn.The ScotRail franchise is also up for renewal, with the winning bidder to be announced in the autumn.