Major rail franchise bidding contest scrapped

7 August 2019

The bidding process to operate the UK's South Eastern rail franchise has been cancelled, the Department for Transport (DfT) announced today. 

The contract held by Govia to operate South Eastern services between London, Kent and parts of East Sussex was due to expire on 10 November 2019, but has been extended until 1 April 2020.

The DfT said the decision to cancel the competition was due to “significant concerns” that the process would lead to additional cost to the taxpayer and so recommendations from the Williams Rail Review - due to be published in Autumn - could be incorporated.

A DfT spokesperson said:  “We have taken the decision to cancel the South Eastern franchise competition.

 “This follows significant concerns that continuing the competition process would lead to additional costs incurred to the taxpayer, with no certainty that this would deliver envisaged benefits for passengers in a timely fashion.

 “The department will use this period to develop a solution that delivers the capacity and performance benefits that passengers are expecting, and ensure that the recommendations of the Williams Review can be implemented.” 

The Williams Rail Review, led by Keith Williams, the former chief executive of British Airways, was established in September 2018 to look at the structure of the rail industry and the way rail services are delivered.

Govia, a joint venture between Go-Ahead Group and Keolis, has operated the South Eastern franchise since 2006 under the Southeastern brand. While the initial contract was for an eight-year franchise, the contract has been extended a number of times - most recently in June 2019. 

Go-Ahead chief executive David Brown said while he was “disappointed” the bidding process had been cancelled, the group would continue to work with the DfT on next steps. 

He said: “A lot of hard work was put into a strong bid that would have built upon the achievements of Southeastern in recent years in improving performance and customer satisfaction, delivering more capacity and investment.” 

David Statham, Southeastern's managing director, said: “Over this next extension period, our focus remains squarely on our passengers, delivering more improvements and continuing to improve the punctuality and reliability of our services.”

General secretary of the Rail, Maritime and Transport Union, Mick Cash added: “The cancellation of the competition for the South Eastern franchise shows yet again that the whole privatised rail system is broken and coming apart at the seams. The chaos of short-term extensions to get the Government off the hook is a measure of just how rotten their rail policies are.”

Earlier this year, the DfT disqualified Stagecoach from bidding for rail franchises including the South Eastern line after submitting “non-compliant bids”. 

Last week, Stagecoach alongside Virgin and Arriva were told by the High Court they could challenge the decision to ban them from bidding for the East Midlands, West Coast and South Eastern franchises.

CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates