The intercity train operator Avanti will soon win a contract to operate services along the West Coast Line despite being plagued with delays and cancellations which have caused passengers to be miserable.
Whitehall officials are in negotiations with Avanti bosses on a long-term agreement that will also involve the operator in the running of HS2 services, assuming that the line isn’t scrapped. Avanti is the joint venture of London-listed FirstGroup with Trenitalia.
Sources said that representatives from both sides were finalising an agreement that would be a short-term extension with the option of a longer-term deal.
A senior industry official suggested that an announcement might come as soon as this week. They cautioned, however, that complex contract negotiations can lead to new delays in finalising terms.
Sources said that the Avanti deal could be announced along with a similar agreement with Arriva, which would allow Arriva to retain control over the CrossCountry franchise, which runs intercity services between Aberdeen and Penzance. The Avanti and CrossCountry contract expires next month.
Separately there is growing expectation that the Government will reverse its plans to close almost 1,000 ticket offices at railway stations.
A senior rail industry official said the plans will “clearly be watered-down” or even scrapped completely. Huw Merriman summoned the rail chiefs last week to Whitehall to explain that he “would not put up with any change to staffing levels”, a source said. The consultation on the closures received a record 680,000 responses, which is more than the response to the equal marriage review by the government in 2012.
Avanti barely avoided losing its contract last year after calls for nationalisation. The bosses apologized for the major disruption in services which led to a skeleton schedule being run for several weeks and suspending advance ticket sales for weekend travel.
Avanti’s contract was awarded in 2019. It included a partnership between HS2 and Avanti to operate “shadow services” along the line. Rishi Sunak last week refused to rule out any further cuts to HS2, a project that could cost as much as £100 billion.
Avanti’s services have improved from last year’s low point — the company is now running more trains than a year earlier, and cancellations are down to just 3.5 percent.
The Department for Transport stated: “The Transport Secretary has made it clear that it is important to restore reliability and passenger trust and any decision regarding its contract will come in due time.”
Louise Haigh, MP, Shadow Transport Secretary, said: *Despite being at the bottom of league tables for delays, Avanti not only received a lucrative contract, but they also pocketed millions of dollars in performance bonuses. The only thing that is reliable on Britain’s rails are taxpayers moneys going straight to shareholders.
This waste is the result of a broken railway system. Labour would put an end to this scandal, take our railways under public ownership and place passengers first.
Arriva’s German owners will be delighted by the prospect of a contract extension on CrossCountry. The German owners of Arriva are close to a €1.6billion deal with a firm that is run by a senior adviser to President Biden.
I Squared Capital is expected to acquire Arriva in the next few weeks. Arriva is one of the UK’s largest transport companies.
Sources familiar with the situation expect a deal to be finalised by October.
Wahba is the great-grandson to the Egyptian Prime Minister Youssef Wahba. He founded I Squared after he rose to the position of head of Morgan Stanley Infrastructure.
He is among 30 senior executives who serve on Biden’s National Infrastructure Advisory Council. The council “provides advice to the President on how to protect the nation’s infrastructure”.
This will be a major coup for I Squared of Miami, which had failed to take over FirstGroup for £1.2 billion.
The National Infrastructure Advisory Council shocked onlookers last week by advocating to the White House that barriers be removed for the privatisation of the country’s Water Sector.