ANOTHER major franchise renewal, another tussle between two of Scotland’s biggest listed companies.
Like sparring heavyweight boxers, FirstGroup and Stagecoach will again slug it out for one of the UK transport sector’s biggest prizes. T
his time they are going to toe for the right to run the new West Coast Partnership, which will include responsibility for the first HS2 services between London and Birmingham.
The renewal comes at an intriguing point in the rail business.
To resume the boxing analogy, FirstGroup looked to be on the ropes when it lost the ScotRail franchise to Abellio of The Netherlands in April 2015.
FirstGroup boss Tim O’Toole lamented the decision as a “bitter disappointment”, but fast forward two years and his company’s fortunes in the UK rail sector are looking decidedly better.
Having won the renewal of the TransPennine Express, in partnership with Aviva, in late 2015, it received a major boost when it secured the South Western franchise earlier this year, this time under a joint bid with the Hong Kong-listed MTR Corporation.
That FirstGroup prevailed over current incumbent Stagecoach in the South Western auction adds spice to the West Coast duel. But it is sure to be a closely-fought contest.
Stagecoach certainly has the experience of the West Coast line to bring to the table.
The company, founded by Sir Brian Souter and his sister Ann Gloag, currently runs the franchise in partnership with Sir Richard Branson’s Virgin Group. It also runs the East Coast Main Line in a joint venture with Virgin, and operates the East Midlands Trains in its own right. That franchise is due for renewal next year.
Of course, we should not overlook the fact third bidder, the MTR West Coast Partnership, is in the running for the HS2 bid. It will be fascinating to see who delivers the knock-out blow.
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