Four bidders for Elizabeth line operations from May 2025 announced

[JaJaWa]

Tokyo Metro's first foray into the UK?

Four bidders for London’s Elizabeth Line operator contract​

The tender for the seven-year concession will be issued in April.

TRANSPORT for London (TfL) has confirmed a shortlist of four bidders to become the next operator of the Elizabeth Line from May 2025.

The shortlisted bidders are:

• Arriva UK Trains

• First Keolis Elizabeth line, a joint venture between First Group and Keolis

• GTS Rail Operations, a joint venture between Go Ahead, Sumitomo Corporation and Tokyo Metro, and

• MTR Corporation UK, the line’s existing operator.

TfL plans to issue a tender in April, with submissions expected in July.

The seven-year concession contract will have an option to extend by up to two years. Under the new contract, the mayor of London will continue to be responsible for setting fares, while TfL will market the services as well as specifying the train service. TfL will also retain revenue generated through ticket sales to reinvest in transport network improvements.

The new operator will be required to work closely with TfL, infrastructure manager Network Rail and HS2 on preparing for the operation of Elizabeth Line services to the new HS2 station at Old Oak Common, which is scheduled to open in 2028-33.

An early market engagement exercise with prospective bidders took place in June 2023.

The central section of the 21km Elizabeth Line opened in May 2022. The service runs from Heathrow and Reading in the west via the central London section to Shenfield and Abbey Wood.

More than 300 million passengers have used the railway since it opened and it is described as the most significant addition to London’s transport network in a generation, operating up to 24 trains per hour at peak times.

“The Elizabeth line has had a transformational impact, providing new, more direct journey options for customers, including at 10 new central London stations,” says Mr Howard Smith, Elizabeth Line director. “The new Elizabeth line operator will play a major role in supporting us to continue that growth and success, providing high levels of customer service and satisfaction.”

TfL is also in the process of selecting the next operator of the Docklands Light Railway (DLR). The shortlisted bidders for this contract, which will commence on April 1 2025, are:

• Keolis Amey Docklands, a joint venture between Keolis and Amey, the current operator

• Connecting Docklands, a joint venture between Go Ahead and Atkins, and

• ComfortDelGro.

The new eight-year franchise contract for the 40km automated light metro network is estimated to be worth £2.3bn.

Source: https://www.railjournal.com/financial/four-bidders-for-londons-elizabeth-line-operator-contract/

 

[TFN]

Would this be the first time a Japanese operator ran in the UK? (Albeit partly)

 

[Thirteen]

Arriva bidding makes sense as they already operate the London Overground. Tokyo Metro running the EL would be interesting.

 

[Diedinium]

I really don't get why TfL can't just operate the line directly and cut out the middle man?

 

[danbarjon]

Would this be the first time a Japanese operator ran in the UK? (Albeit partly)

I believe JR East (East Japan railway) owns 15% of West Midlands Trains.

 

[jfowkes]

I really don't get why TfL can't just operate the line directly and cut out the middle man?

There's a good Reddit question about this.

If you believe the answer, essentially it's because Crossrail (and the overground) are more like national rail services with TfL branding. It makes sense for TfL to just get someone else to run the service rather than build up the expertise of running said services in house.

Also until the franchising model for railways fell apart, there's an argument that it would have been politically risky for a public body to take on running trains that were previously operated by franchises.

 

[dmncf]

I don't understand why Go-Ahead and Tokyo Metro have Sumitomo Corporation as part of their team. What does Sumitomo Corporation bring to the team? From what I can see, they look like an investment bank, but running the Elizabeth Line doesn't demand any big investments; e.g. they're not being asked to buy new trains or build new infrastructure.

 

[Snow1964]

I don't understand why Go-Ahead and Tokyo Metro have Sumitomo Corporation as part of their team. What does Sumitomo Corporation bring to the team? From what I can see, they look like an investment bank, but running the Elizabeth Line doesn't demand any big investments; e.g. they're not being asked to buy new trains or build new infrastructure.

TfL owned, but sold the class 345 fleet about 5 years ago, to a consortium comprising Equitix Investment Management Ltd, NatWest and SMBC Leasing. They now lease them back.

TfL are known to want 3-5 extra trains for the services extended to Old Oak Common, if that becomes interim HS2 terminus, so potentially need funder.

Another possibility is one of the funding consortium is looking to offload their share to new funder.

 

[JaJaWa]

I don't understand why Go-Ahead and Tokyo Metro have Sumitomo Corporation as part of their team. What does Sumitomo Corporation bring to the team? From what I can see, they look like an investment bank, but running the Elizabeth Line doesn't demand any big investments; e.g. they're not being asked to buy new trains or build new infrastructure.

Similar to Greater Anglia which is 40% Mitsui & Co and West Midlands Trains which is 15% Mitsui & Co (and 15% JR East).

 

[stuu]

I don't understand why Go-Ahead and Tokyo Metro have Sumitomo Corporation as part of their team. What does Sumitomo Corporation bring to the team? From what I can see, they look like an investment bank, but running the Elizabeth Line doesn't demand any big investments; e.g. they're not being asked to buy new trains or build new infrastructure.

Sumitomo is a huge holding company, they have all sorts of industries including transport interests

 

[DanNCL]

So the choice is either the incumbent or three companies who were so bad that the Tories stripped contracts from them to hand to the OLR. Such an amazing choice…

 

[Thirteen]

Keep in mind a concession contract is different from a franchise so you wouldn't really notice the difference even if it changed operators.

 

[Meerkat]

I don't understand why Go-Ahead and Tokyo Metro have Sumitomo Corporation as part of their team. What does Sumitomo Corporation bring to the team? From what I can see, they look like an investment bank, but running the Elizabeth Line doesn't demand any big investments; e.g. they're not being asked to buy new trains or build new infrastructure.

Doesn't someone have to front various bonds?

 

[LNW-GW Joint]

I really don't get why TfL can't just operate the line directly and cut out the middle man?

The Railways Act mandates national rail services, which the Elizabeth Line is part of, must be put out to external tender.
The same would apply to the London Overground operation (presently Arriva), and seemingly to DLR.
TfL's directly-owned LU services are not included.
All of the current rail contracts follow the same legislation, even devolved TfW and Scotrail, though those two, like the OLR operations, have temporary dispensation to be in government hands.
New legislation is awaited (based on "GBR" or whatever model Labour decides to adopt, so many months away).
There used to be EU contracting rules as well, but those don't apply now.

 

[Mikey C]

ComfortDelGro making another attempt to win a UK rail contract (for the DLR this time).

 

[pepperpot80]

I don't understand why Go-Ahead and Tokyo Metro have Sumitomo Corporation as part of their team. What does Sumitomo Corporation bring to the team? From what I can see, they look like an investment bank, but running the Elizabeth Line doesn't demand any big investments; e.g. they're not being asked to buy new trains or build new infrastructure.

Probably because the EL contract involves maintenance of the track, signalling, and tunnel between Old Oak Common & Abbey Wood / Stratford. Sumitomo does railway infrastructure construction and maintenance in east Asia, North America, and India. Same reason Amey (and Atkins on DLR) are involved.

So the choice is either the incumbent or three companies who were so bad that the Tories stripped contracts from them to hand to the OLR. Such an amazing choice…

I think there's a discussion to be had about why the playing field is small, and why other parties have not bid or successfully passed TfL's pre-qualification. On the other hand, you're skipping over a lot of detail with "companies who were so bad that the Tories stripped contracts from them", e.g. Northern was a basket case of a franchise agreement, and those take two to tango.

I don't think that the Tories' great procurement experience should be held up as a shining example. Make of railway tendering as you will, but at least it consists of a bit more process than a few WhatsApp messages.

 

[TFN]

Probably because the EL contract involves maintenance of the track, signalling, and tunnel between Old Oak Common & Abbey Wood / Stratford.

This is done by Rail for London Infrastructure (part of TfL) and is not included with the current or future Elizabeth Line concessions.

 

[YorkRailFan]

Arriva currently operates LO and their Head is also the Chairman of RDG. MTR is the incumbent and could argue that they haven't had a long time running the full EL service. All to play for.

 

[thelongestroad]

I wouldn't get hyped into the idea that it being a Japanese company would make it any better. Take Hitatchi in the UK, it's Japanese style in nothing but name.

 

[Samzino]

I wouldn't get hyped into the idea that it being a Japanese company would make it any better. Take Hitatchi in the UK, it's Japanese style in nothing but name.

That's hardly fair considering what Hitachi does internationally. You get what you pay for and clearly the UK overall fails to put good Dosh to get something done right the first time.

 

[Energy]

That's hardly fair considering what Hitachi does internationally. You get what you pay for and clearly the UK overall fails to put good Dosh to get something done right the first time.

The IEP is certainly paying top money.

Hitachi isn't particularly impressive here, they don't ride particularly well, overcomplicated doors on the AT300s, availability of trainsets is fairly bad... The 385s have heavier bogies than their Bombardier and Siemens counterparts.

 

[Samzino]

The IEP is certainly paying top money.

Hitachi isn't particularly impressive here, they don't ride particularly well, overcomplicated doors on the AT300s, availability of trainsets is fairly bad... The 385s have heavier bogies than their Bombardier and Siemens counterparts.

When we say top money what are we comparing it to? The DFT has shown a history of cost cutting of which affected the IEP program ontop of delays. Hitachi built the solid Class 395s which were actually well funded.

Most of the new stock minus the Stadler units for GA have been of questionable quality and those have been orders with high cost cutting in mind. Alstom is maybe the old manufacturer that internationally hasn't been very good, it's delays in America with the Amtrack fleet.

 

[Energy]

When we say top money what are we comparing it to? The DFT has shown a history of cost cutting of which affected the IEP program ontop of delays. Hitachi built the solid Class 395s which were actually well funded.

Most of the new stock minus the Stadler units for GA have been of questionable quality and those have been orders with high cost cutting in mind. Alstom is maybe the old manufacturer that internationally hasn't been very good, it's delays in America with the Amtrack fleet.

The 801s are about £2.43m per carriage, and 800s were £2.93m per carriage in 2012. For comparison, the 395s were £250m for 140 cars, about £1.79m per car.

That doesn't include the later heavy prices for contract alterations to change GWR 801s to 800s.

The 800/801s inherited aspects of the 395 design, and the 395 carries the price premium of a small order with special signaling requirements.

Most of the new stock minus the Stadler units for GA have been of questionable quality and those have been orders with high cost cutting in mind. Alstom is maybe the old manufacturer that internationally hasn't been very good, it's delays in America with the Amtrack fleet.

The software has been poor but the 720s are otherwise fine. 720s were late but nothing like the 810s which have now been pushed back to 2025.

Anyway, I wouldn't justify one manufacturer being poor by another being worse.

 

[AndrewE]

Wouldn't it be best run by one of the operators of the trains at its outer ends? That way when things go pear-shaped there is just one company [at that end] to unscramble it, one control and one set of employees...

Further speculative discussion at https://www.railforums.co.uk/threads/wisest-choice-of-operator-for-elizabeth-line.262996/

 

[DynamicSpirit]

TfL owned, but sold the class 345 fleet about 5 years ago, to a consortium comprising Equitix Investment Management Ltd, NatWest and SMBC Leasing. They now lease them back.

What on Earth was the point doing that? Or to put it another way, that looks like an arrangement that has a similar effect as if TfL had just borrowed money with the trains as collateral. Was that the intention?

TfL are known to want 3-5 extra trains for the services extended to Old Oak Common, if that becomes interim HS2 terminus, so potentially need funder.

Uh? But running to Old Oak Common was always going to happen. Wouldn't it have made more sense for TfL to just order enough trains at the start (I would assume it would be a lot cheaper to build them all at once) rather than having to put in a special later order, which I would assume means TfL will now have to pay the cost of ramping the production line up again without any economies of scale?

 

[Samzino]

What on Earth was the point doing that? Or to put it another way, that looks like an arrangement that has a similar effect as if TfL had just borrowed money with the trains as collateral. Was that the intention?



Uh? But running to Old Oak Common was always going to happen. Wouldn't it have made more sense for TfL to just order enough trains at the start (I would assume it would be a lot cheaper to build them all at once) rather than having to put in a special later order, which I would assume means TfL will now have to pay the cost of ramping the production line up again without any economies of scale?

They needed some of the approximately 1billion returns to fund the new tube for London stock.

 

[JamesT]

Uh? But running to Old Oak Common was always going to happen. Wouldn't it have made more sense for TfL to just order enough trains at the start (I would assume it would be a lot cheaper to build them all at once) rather than having to put in a special later order, which I would assume means TfL will now have to pay the cost of ramping the production line up again without any economies of scale?

Why would the production line need ramping up? Aventras are still being produced for other operators. It might not necessarily be more expensive if these additional trains are an option to the original order. It’s also saved the cost of running those additional trains for 7 years.

 

[SynthD]

which I would assume means TfL will now have to pay the cost of ramping the production line up again without any economies of scale?

There is a specific timespan for them to order more at the same price. They are seeking money from the DfT before this soft deadline.

 

[thelongestroad]

That's hardly fair considering what Hitachi does internationally. You get what you pay for and clearly the UK overall fails to put good Dosh to get something done right the first time.

If the UK train operations were in Japan I'm sure most of the exec would have resigned in shame. There is no way that the standard would be tolerated, whether the cracking or interiors of train being held together with tape.

 

[The Snap]

"TfL will also retain revenue generated through ticket sales to reinvest in transport network improvements"

This is probably a really stupid question, but here goes...if TfL keep all the revenue generated by ticket sales, how does the operator make their money?