Great Western Coffee Shop

Widespread improvements to trains in the north of England and Scotland have been promised with the announcement of new contracts for two rail franchises.

The Northern Rail franchise is being awarded to Arriva Rail North Ltd, while TransPennine Express is going to First Trans Pennine Express Ltd.

The Department for Transport said the deals would see the introduction of 500 new carriages.

The outdated and unpopular Pacer trains would also be phased out.

Trains would have room for 40,000 extra passengers at the busiest times, and more than 2,000 extra services a week would be delivered, the DfT said.

The two train operators will oversee ^1.2bn of investment into the railways, according to the announcement.

Transport Secretary Patrick McLoughlin said the plans would help deliver a "world class rail service" as part of the government's Northern Powerhouse project. "As a one nation government we are committed to closing the economic gap between north and south," he said. "This deal, and the joint management of the franchises, will bring the Northern Powerhouse to life."

Other promises in the announcement include:

- Free wi-fi on TransPennine Express services and stations by July 2018, and on Northern Rail services and 36 stations by December 2019

- ^55m of investment to improve stations

- A new direct Liverpool to Glasgow service from December 2018

- Additional services from Manchester to Glasgow and Edinburgh from December 2017

- Doubling the number of Manchester to Newcastle services, and running more daily services to Hull from Manchester and Leeds, both from December 2017

Mr McLoughlin added: "Arriva Rail North Limited and First Trans Pennine Express Limited went far beyond our requirements with exciting, ambitious plans that will make a real difference to customers. Coupled with our commitment to push ahead with electrifying the vital TransPennine route, [they] will help the region realise its full economic potential, ensuring it has a modern 21st Century transport system."

During the life of the franchise more than ^500m will be invested to transform
rail services across the North of England and into Scotland. There will be a
large increase in the number of carriages compared with today, meaning an 80
per cent rise in capacity at the busiest times of the day. The new TransPennine
Express will increase connections between the largest cities in the North and
Scotland by 55 per cent by 2019, keeping their communities and businesses
prospering.

220 brand new vehicles will be introduced by 2019 providing an additional 13m
seats a year. These state of the art intercity trains will be faster and more
reliable with more seats and luggage space. Journey times will be reduced as we
realise the benefits of these new trains and the Government's investment in
electrification. The remaining vehicles will be refurbished to the same
standard.

The new TransPennine Express will also operate a timetable that gives a similar
level of service at weekends as on weekdays, reflecting the changing nature of
work and leisure travel needs. Pioneering fares will be introduced, including
half price travel for jobseekers and 16-18 year olds, as well as further
discounted travel for groups.

FirstGroup will have responsibility for 19 of the region's railway stations and
will invest more than ^18m to further develop these transport hubs. Customer
information at stations and via websites and mobile apps will be improved and
all TransPennine Express trains and FirstGroup-operated stations will be fitted
with free
Wi-Fi by 2018.

[snip]


The new franchise will start on 1 April 2016 and is planned to run until 31
March 2023, with the option for a two-year extension at the DfT's discretion.
Under the contract, FirstGroup will deliver ^303m real NPV* in premium payments
to the Government over the core period, with 2017/18 marking the transition of
this franchise from being a subsidised railway to one which delivers a premium
to the taxpayer.

The franchise will benefit from investment of more than ^500m, primarily during
the first four years of the franchise, leading to enhanced customer experience
and passenger capacity more than doubling across the network over the life of
the franchise. Franchise passenger revenues, which were ^213m in 2014/15, are
expected to increase significantly from the additional capacity created. The
full revenue risk franchise includes a profit sharing arrangement whereby a
proportion of profit in excess of pre-specified thresholds will be payable to
the DfT. FirstGroup will provide up to ^189m in subordinated contingent loan
facilities to the operating company, of which ^84m is bonded, as well as a ^15m
performance bond and a season ticket bond of up to ^3m. The Group expects to
earn an appropriate return over the life of the contract, reflecting the
franchise risk profile.

My suspicion is another order for Hitachi's AT300s.

The new trains for TPE are to be 125mph capable. Bearing in mind their operating area it could mean these will have to be bi-mode. My suspicion is another order for Hitachi's AT300s.

Or transferred from the GW franchise should First not retain it in 2019?

Being ordered by First & paid for by them....

Being ordered by First & paid for by them....

FirstGroup have put all the work in regards procurement of these sets

It's also been reported that the cost of leasing an AT300 is substantially less than the equivalent government procured order which says a lot about the DfT.

Because there seemed little immediate prospect of run-on orders and the concept really only being a UK thing, the first batch of trains would have carried much of the development costs so they would be more expensive.  The clever thing would have been for DfT to negotiate a reduction in the cost of their order if other UK orders were to follow. Anyone know if they did this?

Instead of deflecting away from your error by making assumptions about my presumed assumptions, why not just fess up and say, oops I was mistaken about the AT300 order.

They, or a successor franchisee, will be leasing the AT300s.

They may have secured them for longer than their franchise. A wise commercial move possibly.

That's better. Yes, that is of course a possibility too. But you don't *know*.

Because there seemed little immediate prospect of run-on orders and the concept really only being a UK thing, the first batch of trains would have carried much of the development costs so they would be more expensive.  The clever thing would have been for DfT to negotiate a reduction in the cost of their order if other UK orders were to follow. Anyone know if they did this?

They certainly would on the 800/801s, but the AT300s (802s) were offered as an option by GWR & could easily be differently contracted IMHO.

The legal teams that advised on the AT300s contract say they will initially be leased by First Greater Western Ltd. That word initially does rather suggest there could be a different lessee in the future. IMHO that initially refers to the period from introduction until the end of the current franchise in April 2019.