87015
Established Member
Rail Division closing, c2c sold to Italians...
Rail Division closing, c2c sold to Italians...
Rail Division closing, c2c sold to Italians...
87015 is an informed source, so I expect it will be in the news soon....Where did you read that? Not seen anything about it in the news
Where did you read that? Not seen anything about it in the news
Acquisition of c2c franchise by Trenitalia
11 January 2017
National Express Group PLC ("National Express") has reached an in principle agreement for Trenitalia, the passenger rail transportation company part of FS Italiane Group, to acquire the c2c franchise.
Completion of the acquisition is conditional upon final consent from the Department for Transport and is expected to occur within the next three to four weeks. The total consideration is expected to be in the region of £70 million, resulting in a small net profit for National Express.
87015 is an informed source, so I expect it will be in the news soon....
Yet another foreign state railway operator with a UK franchise...
And is now as well qualified as DB and SNCF to bid for the West Coast Partnership franchise (ICWC+HS2)...
I would still put my money on Virgin Group + a foreign HS operator.
Does this mean Stagecoach, First and Go Ahead are the only british opperators left?
Sorry to mention the B word, but is Brexit going to change the ability of European rail companies and government bodies to buy up uk rail franchises?
Even with a hard brexit, global companies will still be able to buy up uk companies even if there is more paperwork.
So will we see any difference to the current trend of overseas ownership of the uk rail operating companies?
Arriva is based in Sunderland, not Berlin.
Will the new company be allowed to run the c2c franchise until whenever the c2c franchise is due for renewal?
Indeed. Some people (RMT included) are quick to label Arriva as a foreign company because they are a UK registered company with a German parent but try to label Bombardier Derby as British despite being a plant belonging to a German registered company with a Canadian parent.
Sorry to mention the B word, but is Brexit going to change the ability of European rail companies and government bodies to buy up uk rail franchises?
Even with a hard brexit, global companies will still be able to buy up uk companies even if there is more paperwork.
So will we see any difference to the current trend of overseas ownership of the uk rail operating companies?
They've been talking about not bidding for a fair time. The c2c bid hasn't been particulary successful in delivery because of some ridiculous requirements and ideas placed by said bid on the operators themselves. The sale of c2c is a surprise buts its classic NX to shuffle the rail division around shortly before binning in.This is rather a shock to everyone in the business, however I am surprised that Trenitalia wants to move into the UK rail market considering the low margins and crazy bids that have won the last few franchises.
however I am surprised that Trenitalia wants to move into the UK rail market
Both Trenitalia and Renfe have been saying for a while they want to get in to the UK market. I get the impression both really want the more lucrative Intercity franchises rather than the local franchises but possibly Trenitalia see getting 1 local franchise as a stepping stone towards getting an Intercity franchise.
Isn't there usually some wrangling with the DfT when this happens? I'm thinking back to when First bought out Great Western Trains and made a bunch of new franchise commitments to get it through.
UK: An agreement in principle for National Express Group to sell its c2c passenger franchisee to the Trenitalia subsidiary of Italian state railway group FS for £70m was announced on January 11.
NEG’s c2c holds the Essex Thameside franchise to operate commuter-focused services into London Fenchurch Street, carrying around 37 million passenger-journeys/year using a fleet of Bombardier electric multiple-units. The current franchise runs from 2014 to 2029, with the operator expected to pay DfT premia of around £1·5bn, with a net present value of £1·1bn.
The sale of c2c requires the approval of the Department for Transport, which National Express said it expects ‘within the next three to four weeks’. The deal is expected to bring a ‘small net profit’ for NEG, which is being advised by Ashurst. Trenitalia is to retain c2c’s existing management and staff.
Trenitalia has been seeking to enter the UK rail market as part of FS Group’s wider ambitions to be become an international multi-modal transport operator. In December 2015 it became the first potential new entrant to obtain a Pre-Qualification Questionnaire Passport enabling it bid for franchises. It held initial discussions regarding partnerships for future franchise bidding, before making an offer for c2c that National Express’ board believes represents ‘the best, and a fair’ deal for shareholders.
The agreement only covers the c2c business. NEG’s German rail operating activities are unaffected, and the group plans to bid for further contracts this year as part of its long-term growth strategy. CEO Dean Finch said the sale of c2c would ‘allow us to pursue further growth opportunities in markets where we have seen strong returns in the recent years’. These include Spain, North America and North Africa, where a bid for the Casablanca tram operating contract is to be submitted on January 13.
Finch insisted that NEG was not turning its back on the UK rail sector. It retains its bidding passport, and has not ruled out participating in future franchise competitions which would be considered on a case-by-case basis.
‘National Express has been immensely proud of c2c’s transformation’, said Finch. ‘While this has, therefore, not been an easy decision, the board believes the transfer of c2c to Trenitalia UK presents opportunities for all concerned. We have been impressed by the commitment and interest shown by Trenitalia and are grateful for the support shown by DfT in this process.’
Trenitalia CEO Barbara Morgante said the FS Group sees ‘significant chances to invest in UK rail’ and is ‘confident that British customers will benefit from our skill and capabilities developed in the highly competitive Italian market’. She said Trenitalia was ‘closely monitoring the franchising programme’ and intends to participate in future tenders.
Mick Cash, General Secretary of pro-nationalisation trade union RMT, was less enthusiastic about the announcement. ‘This is yet another part of Britain's rail operations being sold off to a European state-owned outfit’, he said. ‘This time it is Trenitalia, an Italian operator, that is being given an open door to plunder passengers and the public purse to subsidise rail services in their own country.’