New era for North West rail services as joint venture to take over West Coast mainline

A joint venture between FirstGroup and Trenitalia is to run train services between the North West and London.

The new partnership has won the bidding competition to operate services on the West Coast Mainline from December of this year.

As part of the deal the joint venture will also operate the long awaited HS2 service from the spring of 2026.

The UK’s busiest rail route connects London, Birmingham, Liverpool, Manchester and Glasgow.

Virgin Rail is currently running the majority of services on the route but was barred from bidding for the new franchise.

The Government is claiming the announcement is a major turning point for rail services in the region.

The decision means there will be 263 extra train services on the mainline  from December 2022.

As part of the new service two trains per hour will run between Liverpool and London.

In the first phase of the deal which runs to March 2026, First Trenitalia will operate existing InterCity West Coast services while providing a range of design, development and mobilisation services as Shadow Operator to the High Speed 2 (‘HS2’) programme.

First Trenitalia will then operate HS2 and the reshaped InterCity West Coast rail services together as an integrated operation in the second phase, from March 2026 until March 2031, under a management contract.
A statement said the joint venture is committed to delivering a range of improvements.

The partnerships fleet of 56 Pendolino trains will be completely refurbished, incorporating 25,000 brand new comfortable seats and additional luggage space for passengers.

Better and more reliable free Wi-Fi and at-seat power will be provided for all customers across the fleet, with wireless charging and onboard entertainment.
Catering will be upgraded with at-seat service for all.

The will be clearer fares with fewer ticket types; easy and rapid refunds when things go wrong; and simpler fares with mobile tickets and smartcards for all fare types.

There will be new direct services to destinations including Liverpool South Parkway, Walsall and Gobowen (for Oswestry), and offer more stops at stations including Rugby, Llandudno Junction and Motherwell.

There will be investment in stations with refreshed waiting rooms, better customer facilities, more car park spaces, and greater accessibility.
There will also be major upgrades including Coventry and Birmingham International stations.

Secretary of State for Transport Grant Shapps said: “This award is positive news for passengers, with more services, more direct connections and ambitious plans for a cleaner, greener railway, and also represents a decisive shift towards a new model for rail.

“It is a partnership supported by Keith Williams, built with the flexibility to respond to his recommendations. Meeting Keith last week confirmed our shared determination to deliver a future that puts passengers – and punctual trains – at the heart of the railways.

“That is why I have asked Keith to produce a White Paper in the Autumn, with fearless recommendations that will deliver a railway system fit for the 21st century.”

FirstGroup Chief Executive Matthew Gregory said: “We are pleased to have won the West Coast Partnership contract to operate existing InterCity services on the West Coast Mainline and help deliver high speed rail.

The West Coast Partnership includes operation of one of the most consistently successful intercity mainline franchises over the last twenty years. We are committed to delivering a range of improvements for InterCity West Coast passengers during the first phase of the partnership and our aim is to provide exceptional service as standard for our customers.

“In 2016, we and our partner Trenitalia committed to bidding for the West Coast Partnership as it is a unique opportunity to help shape and then run HS2. We look forward to playing our part in the success of the once-in-a-generation project to bring Britain’s largest cities closer together.

“The differences between this contract and more traditional rail franchises were reflected in the terms set out by the DfT, which has resulted in a more appropriate balance of risks and rewards for us as operators.

“The West Coast Partnership’s first phase allows us to earn returns on the significant investments in services and facilities for passengers but protected by a much improved revenue risk sharing mechanism.

“This will transition to a management contract in the second phase, ensuring we can really focus on using the respective skills and experience within our joint venture to deliver the desired benefits of the HS2 project for passengers and the country.

“We are pleased to have won the West Coast Partnership with Trenitalia, a strong partner who is committed to playing an increasing role in UK rail. The Partnership strengthens and adds a fourth franchise to our UK rail portfolio. Following this award we will not therefore be seeking new franchising opportunities for the foreseeable future over and above our current negotiations with the DfT to extend GWR.

“Our focus remains on delivering sustainable shareholder value and we will actively manage our rail portfolio and its risk and reward profile accordingly.”

FS Italiane Chief Executive Gianfranco Battisti said: “After only three years in the UK, we are strengthening our presence through the management of one of the country’s most important railway operating companies, alongside our partners at FirstGroup.

“This award represents another significant step in our ambition to play a major part in the UK rail industry. With this partnership, our international business continues to go from strength to strength, particularly in a high-potential market such as the UK.

“We have more than 20 years of expertise in the high speed sector in Italy, which has significantly improved connectivity for Italians. Trenitalia is operating in the only competitive and open market for high speed services in the world.

“Starting with the acquisition of c2c in 2017, our development in the British market has seen progress through investments in technology and in client services. We are proud with the results achieved in terms of performance punctuality, and customer satisfaction, which has proved to be amongst the best in the UK.

“Trenitalia is now one of the main railway companies in Europe with operations in France, Germany and Greece as well as in Italy and in the UK. We also operate partnerships in Austria and Switzerland and we aim at growing further in the UK and elsewhere in the coming years.”

First Trenitalia will deliver £1.6bn real NPV in premium payments to the Government over this first phase.

First Trenitalia will directly fund £11m of residual value assets, and deductions from the premium will fund investment of £252m by First Trenitalia in the first phase.

A further £453m will be funded by rolling stock leasing companies for new and refurbished trains.

These investments, together with additional routes and other timetable changes, will drive a combined annual growth rate (‘CAGR’) for seat miles of approximately 1.2% per annum over the first phase.