Next generation InterCity East Coast Prospectus October 2013 InterCity East Coast Prospectus October 2013 Contents Foreword Department for Transport 1. Introduction 06 Great Minster House 1.1 Purpose of this document 07 33 Horseferry Road 1.2 Important notice 08 London SW1P 4DR Telephone 0300 330 3000 Part A 10 Website www.gov.uk/dft 2. Executive Summary 10 General email enquiries [email protected] 3. Background and context 18 3.1 The UK rail industry 18 © Crown copyright 2013 3.2 The UK market 20 Copyright in the typographical arrangement rests with the Crown. Part B 22 You may re-use this information (not including logos or third-party material) free of 4. The Existing Business 22 charge in any format or medium, under the terms of the Open Government Licence. 4.1 Overview 23 4.2 Routes and services 25 To view this licence, visit 4.3 Key achievements in last 3 years 25 http://www.nationalarchives.gov.uk/doc/open-government-licence/version/2 4.4 The East Coast market 26 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or e-mail: [email protected]. 4.5 Current employees 27 Where we have identified any third-party copyright information you will need to obtain 4.6 Service delivery 30 permission from the copyright holders concerned. 4.7 Fleet and engineering 34 4.8 Stations 35 Photo credits: 4.9 Timetabling 36 Front cover: © Graeme Peacock/Alamy 4.10 Safety and environment 36 Page 6: © Tim Cordell/Alamy 4.11 Operations 36 4.12 Marketing and communications 38 We would like thank East Coast for the permission to reproduce certain 4.13 Financial information 39 materials and photos in this document. 4.14 The 5 year plan 43 4.15 The franchise opportunity 43 2 3 InterCity East Coast Prospectus InterCity East Coast Prospectus Part C 44 5. Franchise Requirements 44 Foreword 5.1. Franchise objectives 45 5.2 Franchise length & extension criteria 46 5.3 Geographical area 46 5.4 Key events 46 This Government is committed to the principle that partnership between the 5.5 Service quality 50 public and private sector works. 5.6 Operations 56 We have seen great improvements on our railways since privatisation, with 5.7 Fares and ticketing 70 unprecedented growth in passenger numbers and the best safety record in Europe. We want to further strengthen our partnership with the private sector 5.8 Commercial structure 72 and continue to build on this growth and deliver world class railways for 5.9 Sustainability 74 passengers and best value for the taxpayer. 5.10 Community rail partnerships 75 This Prospectus sets out a major opportunity for us to do just that on the InterCity East Coast franchise. It describes the East Coast business as it stands today 5.11 Branding 76 - a successful railway that serves a unique mixture of business, leisure and 5.12 Improving efficiency 77 commuter passengers between Scotland and London and the many important destinations between. East Coast passenger rail services have been operated Part D 80 by the public sector since 2009, which has stabilised a business in difficult 6. The Bid Process 80 circumstances so that it is now ready to be transformed by the private sector. 6.1 Background 81 We want to see a revitalised East Coast railway; one that rekindles the spirit of 6.2 Procurement approach 81 competition for customers on this great route to Scotland and competes with the West Coast on speed, quality and customer service. We need a strong partner 6.3 The procurement timeline 82 to ensure we successfully deliver the investments that we are making on the 6.4 The procurement process 83 infrastructure, through our Rail Investment Strategy, and deliver the significant improvements in rolling stock that the InterCity Express Programme will provide. 7. Evaluation Process 84 We need a partner with vision, a long term plan and the best team to deliver it. 7.1 Delivery Plans 84 Above all, we are seeking a partner that is wholly committed to putting passengers 7.2 Financial deliverability 84 at the heart of their business, realising the full potential in the franchise. 7.3 Quality of bids 85 We will be offering enormous scope for bidders to invest and innovate using their own flair. In return, we want to receive genuinely creative bids for this key rail 7.4 Contracting committed objectives 85 business. These bids should transform the experience for passengers and provide 8. Transfer of ownership 86 tough competition for other operators going north. The bids will match passenger 8.1 Why there is to be a share sale 86 demand and improve the long term value of the business to Britain. It will also provide long term certainty and underpin the economies and communities that 8.2 Due diligence 87 rely on this historic and successful railway. 8.3 The share sale agreement 87 I am confident that through the partnership approach my Department is taking 8.4 ECML as franchise operator 88 in franchising, combined with the skills, investment and innovation of the private sector, we can deliver a new railway for the East Coast. One that meets my three objectives for franchising across the network: that the passenger gains; Glossary 90 the industry thrives; and the taxpayer benefits. Rt. Hon. Patrick McLoughlin MP Secretary of State for Transport 4 5 InterCity East Coast Prospectus InterCity East Coast Prospectus 1.1 Purpose of this document In line with UK Government procurement principles, the competition for the East Coast rail franchise includes significant market engagement, where potential bidders are invited to help the Department test its thinking and generate ideas for innovation. As we move closer to publication of the Invitation To Tender (ITT), our aim is to set out the Department’s intent with regard to this franchise – while being transparent about the fact that our thinking and final position on a number of areas within the scope of this procurement are still being developed – and to provide relevant and detailed information to the market. This Prospectus is being issued as part of a suite of documents including the OJEU Notice3, the Pre-Qualification Questionnaire (PQQ) and the Pre-Qualification Process Document (PPD) and is divided into four sections: PART PART PART PART A B C D includes the gives information sets out the provides executive summary, on the existing Department’s information about some market context ECML passenger requirements and the bid process, the and information about services and specifications for the evaluation process the UK rail industry. summarises the franchise and gives and the mechanism opportunities detail about the for the transfer of presented by this commercial and ownership. business. financial dimensions of the opportunity. The principal aims of this Prospectus are to: • Give detail and information about the East Coast franchise opportunity to allow prospective bidders to decide whether they wish to seek pre-qualification, 1. Introduction either as a single entity or as part of a consortium • Communicate what is important to DfT in relation to the franchise which This Prospectus has been produced to give information to potential will enable interested parties to begin preparations to bid bidders about the sale of the East Coast passenger rail business. • Indicate some of the key areas, risks and responsibilities which bidders East Coast passenger services are currently run by East Coast Main Line will need to consider when preparing their bid Company Limited (ECML) and it is intended that ECML will be sold to the successful bidder who will continue to run the passenger services under We are seeking feedback from applicants on certain areas of the franchise a new franchise. specification. These feedback requests are highlighted throughout the Prospectus. Following the recommendations of the Richard Brown review into Rail Franchising1, the Department for Transport (‘DfT’ or ‘the Department’) is Please send your feedback to seeking to provide a greater level of information to bidders at the start of the competition. Publication of this Prospectus alongside the OJEU2 [email protected] by 15th November 2013. Notice forms part of this new approach. 1 https://www.gov.uk/government/publications/the-brown-review-of-the-rail-franchising-programme 2 Official Journal of the European Union 3 DfT has submitted for publication, a Contract Notice in the Official Journal 6 7 InterCity East Coast Prospectus InterCity East Coast Prospectus The continued success of the rail franchising programme in the UK relies on The only information which will have any legal effect and the only information upon fair and open competition, contested by as wide a field of participants as which any person may rely will be such information (if any) as has been specifically possible, bringing a mix of experience and innovation to the franchising market. and expressly represented and/or warranted in writing to the purchaser of ECML The Department aims to broaden market interest in the opportunities that rail or to ECML in the relevant Franchise Agreement or in any other relevant agreement franchising offers and wants both the continued interest and engagement of entered into at the same time as the Franchise Agreement is entered into or current and former market participants as well as expansion of the potential becomes unconditional. Nothing in this document is intended to create a contract supplier market to suitable organisations. Such organisations may be companies, between the Secretary of State and any bidder or prospective bidder. consortia or other suitable bodies, based within the UK or overseas and will need Legal, technical and financial advisers will be acting for the Secretary of State in to demonstrate their capability to operate a business of the scale and challenge of relation to the letting of this franchise and will not regard any other person as their a UK InterCity passenger rail franchise.