Offline Suzy Scott

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You are here: Home > Media Centre > Latest News > 2014

23 May 2014
The Go-Ahead Group welcomes today’s announcement by the Department for Transport (DfT) to award Govia (Go-Ahead 65% / Keolis 35% joint venture) the Thameslink, Southern and Great Northern (TSGN) franchise. This is the largest rail franchise in the UK in terms of passenger numbers, trains, revenue, and staff.


New trains – introducing three new train fleets
More services – 10,000 additional morning peak seats into London
Increasing capacity – 50% more passenger capacity created
Better connections – up to 24 trains per hour through the Thameslink core in peak periods
Station enhancement – £50m investment in improving facilities
Commenting on the award, David Brown, Group Chief Executive of The Go-Ahead Group said:

“I’m delighted the DfT has chosen us to operate this important and complex franchise and to play an instrumental role in delivering the benefits of the Government’s £6 billion Thameslink Programme. This will be the UK’s busiest franchise and we will be introducing 50 per cent more capacity into central London during peak times, with 26 per cent more morning peak carriages providing 10,000 additional seats.

“This award is testimony to the experience of our people of working in partnership with the DfT, Network Rail and other industry stakeholders and in delivering major integration projects and change programmes.

“Our bid for the franchise was focused on improving customers’ experience and includes two new train fleets for Gatwick Express and Moorgate services, in addition to overseeing the introduction of the Thameslink trains already ordered, as well as delivering improvements at stations.

“I’m looking forward to working with existing colleagues and welcoming new staff and together delivering this transformational franchise.”

Alistair Gordon, Chief Executive of Keolis UK, added:

“We are pleased that the strengths of the Govia partnership have been recognised today in the awarding of this important franchise and look forward to delivering its challenging requirements.”


The seven year management contract, starting in September 2014, which replaces the Thameslink and Great Northern franchise (operated as First Capital Connect, FCC) will encompass the Southern and Gatwick Express routes from July 2015 and also include a small number of services and stations currently operated by Southeastern which will transfer in December 2014.

Combined, the existing FCC and Southern franchises carry 273 million passenger journeys per year, employ around 6,500 people and generate annual passenger revenues of £1.3bn.

The TSGN network will serve London as well as a number of important regional centres, including Cambridge, Luton and Peterborough to the north of the region, and Brighton, Portsmouth and Southampton in the south. It also provides direct rail links to major airports (Gatwick and Luton) as well as St Pancras International and Farringdon station for links to Heathrow and Crossrail in due course.

During the course of the franchise the Thameslink identity will be re-introduced and the Southern and Gatwick Express brands retained.

The new franchise is being let as a management contract where ticket revenues are passed directly to the Government rather than retained by Govia, due to the complexity and scale of the planned changes to services and infrastructure. We are committed to delivering these changes and minimising their impacts on customers.

Benefits for customers during the franchise

New trains

108 new Gatwick Express carriages designed for airline travellers by 2016
150 new metro carriages for Moorgate services in 2018
1,140 Thameslink Class 700 carriages already ordered from Siemens delivered between 2016 and 2018
More services

10,000 additional morning peak seats into London
26% more morning peak carriages into London
50% more passenger capacity created
Improvements to services including:
Up to 24 trains per hour during the peak periods through the Thameslink core (St Pancras to Blackfriars), up from 15 per hour today, an increase of 60%
More direct services to and from Gatwick Airport including a new direct Cambridge to Brighton service
Improved Brighton Main Line services
Stations and staffing

£50m investment to enhance all 239 stations including improving access, installing electronic information screens and working with partners on the redevelopment of St Albans and Luton stations
Staffing hours increased: 100 busiest stations staffed from first to last train
Simplified ticketing and extension of ‘the key’ smartcard
104 stations with free wifi
£1.5m on station access improvements including increased cycle storage and electrical vehicle charging points
Improving standards

Timetables designed to improve punctuality
20,000 days of customer service training for frontline employees
Investment in technology such as smartphone apps and websites to improve real-time information to make door-to-door travel easier
On-hand assistance for passengers during the Thameslink Programme works
Local community focus

Continuing support of Community Rail Partnerships
Providing young people with work experience and mentoring
Award winning education programme Go-Learn used with local schools
£1m per year for local communities to spend on improvements at stations

Revenue and operating profit: From the start of the franchise in September 2014 to June 2015, Govia’s revenue from franchise payments is estimated to be c.£350m. In the first full year to June 2016, which includes the Southern franchise from July 2015, Govia’s revenue from franchise payments is estimated to be c.£1.1bn. Target operating profit margins average c.3% over the life of the franchise including an estimated annual non-cash margin impact of c.1% for IAS 19 (revised) pension costs.
Performance incentives: There are performance regimes in place to incentivise or penalise Govia to meet a range of service quality targets (including for punctuality, customer experience at stations and on trains, and revenue protection). In addition to performance regimes, Govia can also achieve between £nil and £25m for delivery of key performance milestones in the Thameslink Programme, which would largely be payable in the mid-term of the franchise.
Franchise payments: Govia will work with the DfT to generate passenger revenue of an estimated £12.4bn over the life of the franchise for the benefit of the taxpayer. Franchise payments from the DfT to Govia amount to an estimated £8.9bn to reflect operating costs and a small margin allowance. Based on DfT methodology, the net present value (NPV) of the franchise payments is estimated to be around £6.8bn*.
Investment: Govia will procure around £430m of investment over the life of the franchise, including significant investment in rolling stock and franchise improvements. Approximately £40m of capital expenditure will be made by Govia directly, with most of this investment in the first two years.
Cash flow: At the beginning of the franchise we expect a working capital inflow of c.£45m in respect of season ticket monies which will be treated as restricted cash. In the year ended June 2015, operating cashflow after capital expenditure is expected to be broadly neutral. In subsequent years cashflow generated should largely reflect operating profit.
New franchise capital requirements and guarantees: Govia will subscribe for £5m of ordinary share capital in cash and provide two contingent subordinated loan facilities for capital expenditure and working capital purposes of £63.9m (unbonded) and £72.5m (50% bonded). There will also be a performance bond (£20m) and season ticket bond. The value of the season ticket bond is dependent on season ticket income and is expected to increase from c.£45m to c.£95m on the integration of Southern. Only the season ticket bond is required to be backed by cash.

*based on DfT discount rate of 3.5% in real terms
For further information, please contact:

The Go-Ahead Group   
David Brown, Group Chief Executive    020 7799 8971
Keith Down, Group Finance Director    020 7799 8973
Holly Gillis, Head of Investor Relations    07837 612 661
Citigate Dewe Rogerson   
Michael Berkeley/ Chris Barrie/ Eleni Menikou    020 7638 9571
David Brown, Group Chief Executive, and Keith Down, Group Finance Director, will be hosting a conference call for analysts and investors at 8.30am today (23 May 2014).

Presentation slides will be added to Go-Ahead’s website by 8.00am today.

Dial-in details:   
UK Toll Free   0808 109 0700
International Access Number   +44 (0) 20 3003 2666
Password   Go-Ahead

Go-Ahead is a leading UK public transport operator, providing high quality services in the bus and rail sectors. Employing around 23,500 people across the country, over one billion passenger journeys are undertaken on our services each year. We are committed to operating our companies in a safe, socially and environmentally responsible way and are proud to have been reaccredited with Carbon Trust Standard after taking action on climate change. In addition to the travelling public, our customers include the Department for Transport, Transport for London (TfL) and local authorities.

Keolis is one of Europe's leading public transport operators, established in 15 countries on four continents. The group offers a full range of transport solutions to meet the needs of local authorities and passengers and constantly strives to offer its clients mobility choices in tune with the priorities of each geographical region. Keolis employs 55,000 people worldwide.

The rail operation, Govia, is 65 per cent owned by Go-Ahead and 35 per cent by Keolis. It is the busiest rail operation in the UK, responsible for nearly 30 per cent of all UK passenger rail journeys through its three rail franchises: Southern (which includes the Gatwick Express), Southeastern and London Midland.
Suzy Scott
Dundee, Scotland, UK
Forum Administrator (and founder) of A&TVBF and DABF

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Offline benwesley123

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Well hope there certianly better than First Capital Connect!! 
Ben Wesley

Taking pictures here and there! Back again after a very long hiatus!
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Offline Palatine One

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Thanks to fellow forum member Bob who shared this link elsewhere, a rather interesting PDF detailing in possibly more detail what the changes are with the Great Northern franchise.

Offline AE55DKN

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My rumours where true.

The unit with the most rattles, is coming to cambridge deep joy.

"From May 2017, the frequency of off-peak services between
King’s Lynn and King’s Cross will double from 1tph (train per
hour) to 2tph in each direction (except at certain times when
scheduled freight trains on the King’s Lynn branch prevent
this)."  (Delay Repay?)

Offline Steves

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My rumours where true.

The unit with the most rattles, is coming to cambridge deep joy.

"From May 2017, the frequency of off-peak services between
King’s Lynn and King’s Cross will double from 1tph (train per
hour) to 2tph in each direction (except at certain times when
scheduled freight trains on the King’s Lynn branch prevent
this)."  (Delay Repay?)

At present the plan is to use the 377/5 units currently on loan to FCC.

I assume that timetable will just exclude the paths that conflict with the freight paths.  I think there are three in each direction.  One of the northbound paths is effectively out of passenger operating hours.  One looks like the autumn leaf train.  Current paths are shown on Realtimetrains.  This happens now on bank holiday Mondays when the Saturday service operates but the extra 930 (ish) SO from Kings Lynn runs at 0830 to avoid the freight that is booked to operate Monday to Friday including Bank Holidays.

With the exception of the leaf train, the freights operate between3 and 5 times a week.