Stagecoach Agrees Deal With Network Rail

Stagecoach Agrees Deal With Network Rail

An agreement between Stagecoach and Network Rail that will see them jointly operate the trains and track used by the South West Trains franchise is to be followed by similar deals elsewhere on the network, including with ScotRail.

Sir Brian Souter, the famous Scottish entrepreneur and chief executive of Perth-based Stagecoach, has long argued there are "big savings" to be made from allowing rail companies to take over duties from Network Rail.

The alliance will establish a joint management team responsible for both trains and track on the Wessex route running out of London Waterloo.

Sir Brian said: "This new model is a real opportunity to deliver change that will benefit both passengers and taxpayers and support our objective of growing the railway.

"By working more closely with Network Rail than ever before, and with aligned incentives, we can deliver a more customer-focused and more efficient railway for the long term."

A spokesman for Network Rail said it is in discussions with as many as six other train operators about similar deals, but said these would not be as wide-ranging as the arrangement with South West Trains. He confirmed that FirstGroup's ScotRail is one of those with which it is seeking an arrangement.

The Stagecoach-Network Rail alliance will have responsibility for operation of the Wessex network, the maintenance of the line, its stations and South West's trains, which make up 86% of traffic on the route.

Both parties said they will use the new structure to seek improved performance by working together on decisions such as management and timing of work on the line, and response to disruptions. Savings will be split 50/50 between the two organisations and if they rise above a certain level, the Government will also get a share.

Each company will remain ultimately accountable for its own areas of responsibility.

David Higgins, chief executive of Network Rail, said: "This marks a new phase in the evolution of Network Rail as we continue to push decision-making away from the centre, empowering our front-line managers to run the railway more effectively, and forging closer relationships with the train operators."

The alliance has been set up to run until 2017, when the South West franchise expires.