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MTR clinches the contract to run Crossrail service

CROSSRAIL, the UK's biggest new transport link, is to be run by MTR, the Hong Kong government-owned company that is also bidding to run ScotRail.

MTR has won the £1.4 billion contract to operate services on the ambitious £15bn east-west link across London from 2018. It is one of five bidders hoping to land the ScotRail franchise in September, against opposition from the incumbent operator FirstGroup as well as National Express, Dutch state-owned rail firm Abellio, and German-owned Arriva.

MTR, 77 per cent owned by the Hong Kong government, runs metro lines in three Chinese cities, subways in Stockholm and Melbourne, and the London overground in partnership with Arriva, the former north-east of England group bought in 2010 by German state operator Deutsche Bahn. It is also considering a bid to operate part of the S-Bahn underground network in Berlin.

The Hong Kong group has signed a contract for eight years with an option to extend to 10 and is expected to employ around 1,100 staff with up to 850 new posts. Crossrail will connect Reading and Heathrow to Essex through 42 kilometres of new tunnels in a bid to speed up connections and relieve pressure on London's crowded underground.

Arriva, National Express and Govia, a joint venture between French state-owned Keolis and Go Ahead, were the other shortlisted bidders for Crossrail, with the latter expressing its disappointment at the decision in a statement yesterday.

Govia, however, has already landed one success in the current major franchising round which will see as many as 10 lucrative deals signed with the Department for Transport (and Scottish Government).

It was last month awarded the government contract to run the £8.9 billion Thameslink "super-franchise", which swallowed up the Capital Connect territory run by FirstGroup.

MTR, Stagecoach, FirstGroup and Dutch state operator Abellio were all unsuccessful in that competition, as they all were, bar Stagecoach, in the relatively small Essex Thameside franchise award in May, which went to the incumbent National Express - the only franchise now held by the group that once ran ScotRail and the East Coast line.

FirstGroup has also lost its Caledonian Sleeper contract to Serco, prompting chief executive Tim O'Toole to tell last week's annual meeting that FirstGroup's losing bid had been for zero profit.

In response to analyst claims that the ScotRail and East Coast franchises were now "must win" for the group, Mr O'Toole said: "There will be wins and losses, we will get our fair share."

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