NO 314 JUNE 29 2007 HIGH COURT BACKS ARRIVA IN CHESTER BUS CASE SEE PAGE 7 News and analysis for the passenger transport business inside 9 news 14 feature 11 interview 10 Opinion Edinburgh tram Trolleybus plans Tube boss Tim 17 Business comment plans given the offer life after O’Toole speaks out 18 Business monitor green light, but Supertram about his battle 21 Business back-up EARL must wait for Leeds with Metronet 28 People East Midlands defeat piles the pressure on National Express BY ROBERT JACK contract where it was the incumbent is not good news.” NATIONAL EXPRESS Group is Failure to bounce back with a A scene from one of the TV ads reeling after discovering that its victory in either the Cross Country must-win bid for the new East or East Coast competitions will see Midlands franchise has failed. NEG’s turnover fall sharply. This Stagecoach The Department for Transport could leave the group vulnerable to announced last week that a takeover bid from a rival group. to advertise Stagecoach would be awarded the Industry speculation suggests seven-year contract, which will that Arriva will shortly be named buses onTV combine the Midland Mainline as winner of Cross Country. But intercity operation and the eastern even if NEG is the victor, Brewer STAGECOACH HAS hired the section of Central Trains - both believes it would open a “Pandora’s agency behind the famous Irn-Bru currently operated by NEG. box” of competition issues relating soft drinks adverts to develop a TV The defeat came in the same k to its express coach network. u . o consumer advertising campaign week that the DfT announced that c This leaves the hotly-contested . s e “to encourage Britain to get on it will terminate NEG’s Gatwick g East Coast competition, where a m board the bus”. Express franchise on November 11 i NEG is bidding against First, Arriva, l i a r A series of three 40-second and hand the operation to Govia’s . and Virgin/Stagecoach. The w adverts, created by the Edinburgh- Southern subsidiary. w winners of this franchise will be based Leith Agency, have been The loss of these franchises w announced in late summer. aired in the Anglia West TV region further contributes to the dramatic NEG will surrender Midland Mainline to Stagecoach on November 11 NEG’s defeat was announced in since last week. The £350,000, dismantling of what was once the same week that the winners of 12-week pilot campaign is being Britain’s largest train operator. After c2c and its struggling One (Greater forward to the DfT explaining the the West Midlands franchise and targeted at consumers in the areas acquiring Prism Rail in 2001, NEG’s Anglia) operation. reasons for their decision.” Transport for London’s London around Cambridge and UK trains division held a total nine The East Midlands result is a Bowker will focus his attention Overground contract were named. Peterborough, where Stagecoach’s UK rail franchises. This has since major setback for former Strategic on the group’s bids for the new NEG was the incumbent operator buses are achieving strong growth. been reduced to six, but will drop Rail Authority chairman Richard Cross Country and Intercity East for both franchises, but failed to Plans are also being drawn up to further on November 11 this year Bowker, who was appointed as Coast franchises. The City believes reach the final stages of either roll the campaign out to further when the group will hand over NEG’s new chief executive last year that success in one of these competition. Govia has won the key locations around the UK if the Midland Mainline, Central Trains, in an effort to revive the group’s competitions is essential for NEG. West Midlands contract while the Anglia West pilot is a success. Silverlink and Gatwick Express fortunes in franchise competitons. Damian Brewer, transport analyst joint bid by Laing Rail and Hong “This is a completely fresh way Express to new owners. All of these Commenting on the East at JP Morgan, said: “We think that Kong’s MTR Corporation captured to market public transport and a operations have been run by NEG Midlands decision, Bowker said: to satisfy investors’ appetite for the London contract. first for the UK,” said Stagecoach since the mid-1990s. The group’s “We are very disappointed with National Express to grow [profits] Franchise news page2-3 chief executive Brian Souter. two remaining franchises will be [the] announcement. We look it ‘has to win’ one bid, and losing a Business comment page17 “Stagecoach has attracted rising numbers of passengers for the past five years in a row,” he continued. “We believe that with Tube boss defiant as Metronet begins Brown hands increasing congestion and more environmental awareness, there is Kelly transport huge potential to get even more proceedings to recover additional costs post in reshuffle people on board buses.” Actor Tom Baker recorded the METRONET HAS given notice to the infrastructure company. Ruth Kelly was appointed secretary of state voiceover for the adverts, which London Underground of its “Their [Metronet’s] behaviour fortransportinthisweek’scabinetreshuffle were directed by Damien intention to invite PPP arbiter Chris and their claims are typical of a bynewprimeministerGordonBrown.Kelly, O’Donnell, who is well known for Bolt to conduct an extraordinary contractor who is trying to put who was previously communities and local his comedy such as in the feature review. The Tube infraco claims the forward a great big hairy claim in government secretary, replaces Douglas length film East is East and TV review is necessary for it to recover the guise of this PPP adjustment,” Alexander, who has moved to international commercials for energy drink the “significant” additional costs it he said. “They are forgetting the development. Irn-Bru 32. The ads feature three claims to have incurred. extremely generous - some would Kelly, 39, began her career as an humorous characters: WAG Tanya Metronet claims that during the say outrageous - equity returns they economics reporter for the Guardian and Brown, academic Professor Harold first four years of its PPP contract to were guaranteed in return for later worked for the Bank of England. Hooterson and “green” enthusiast renew the LU’s Bakerloo, Central, management expertise to deliver After becoming MP for BoltonWest in 1997, Gayle Windybottom. Victoria, and Waterloo & City lines, these upgrades - which they priced she was made a parliamentary aide to Commenting on the use of costs have been higher than - efficiently and effectively.” NickBrown, formerministerforagriculture, humour, Leith Agency partner Ed anticipated. The extraordinary O’Toole believes that the root of fisheries and food. After the 2001 election Brooke said: “This kind of approach review is the process created to the consortium’s problems is its she become a minister for the first time, is novel in transport advertising, enable the recovery of these costs. unworkable structure, which gives joining Gordon Brown’s team as economic but our view is that if people feel Metronet and LU are currently it no control over its contractors. secretary to the Treasury. In 2004, Kelly was warm towards a transport brand consulting on the form and He fears that the extraordinary appointedasaministerintheCabinetOffice. then they’re more likely to use it.” conduct of the review. However, in review, which could take up to a Following David Blunkett’s departure she Stagecoach results page4 an interview in this edition of year, may delay vital rebuilding was promoted to education secretary. Business comment page17 O’Toole fears the extraordinary Transit , LU managing director Tim work on the Tube network. Opinion page10 review could delay renewal work O’Toole expressed no sympathy for Tim O’Toole interview page11 2 franchise news Highlights of Stagecoach and Corby winners East Midlands franchise in East Midlands franchise deal G A new hourly service between Kettering and London, increasing the BY ROBERT JACK number of off peak services on the Midland Main Line to five trains per CORBY MOVED a step closer to hour. It has also been agreed in being reconnected to the national principle to extend this service to a rail network last week when the new station at Corby from December Department for Transport named 2008. This removes the need to split and join trains at Leicester. Stagecoach as winner of the new G East Midlands franchise. A 9% increase in peak capacity into and out of London St Pancras by 2010. Trains have not served the G Northamptonshire town since More carriages on the busiest trains between Nottingham and Liverpool. 1966 and it is currently said to be G the largest in Europe without a The new station at East Midlands station. However, Stagecoach’s Parkway will be served by two trains an hour from December 200. winning bid for East Midlands G franchise contains an option to Daily direct service between Lincoln and London to be introduced. provide rail services to a potential G new rail station in the town. Journey times between Sheffield, In May this year Network Rail Derby and London reduced, saving up announced that it would fund a to 12 minutes on an average journey between London and Sheffield. £1.2m scheme to reopen the G station, saying that pending Improved performance, with a government approval the station forecast 90.4% of trains on time by the end of the franchise. could be open by December 2008. G The East Midlands franchise deal An artist’s impression of the new Corby station, which could be served by Stagecoach from December 2008 The Community Rail service contains a provisional agreement between Matlock and Derby will be to operate an hourly train service The new franchise will last for grow the market by delivering a pleased that this new franchise will increased to every hour and extended directly to Nottingham.