22/06/2007

Stagecoach Group today (22 June 2007) welcomed the decision by the Department for Transport (“The DfT”) to award it the new East Midlands rail franchise.

The new 7-year and 4-month franchise, which is worth £235million in annual total revenues, will run from 11 November 2007. The last 16 months are dependent on meeting performance targets.

Stagecoach engaged with more than 80 local, regional and national stakeholder organisations in developing its proposals for East Midlands, which combines the current Midland Mainline franchise and regional services transferred from Central Trains.

Brian Souter, Chief Executive of Stagecoach Group, said: “We are delighted to be entrusted by the Government with the contract to run a key rail franchise in a region that is the heart of the UK transport and logistics economy, with significant growth potential.

“We plan to win back customers from the car and grow the market by delivering a high-quality service that meets the diverse needs of short and long distance commuters, business and leisure travellers.

“Our innovative and value-for-money plans are designed to meet the challenges of growing demand, improving passenger perceptions of service and security, and making it easier for people to travel by train.

“We look forward to delivering a comprehensive package of train, station and security investment, improved operational performance, increased capacity, state-of-the-art ticketing options and a range of other customer benefits.

“This is an excellent result for passengers, taxpayers and our shareholders, and we will be working closely with local stakeholders to help meet their aspiration for the area to become one of the top 20 regions in Europe.”

The new franchise incorporates a multi-million-pound investment programme and will generate £133million (Net Present Value) in premium payments to the DfT over the period for the franchise.

Under the franchise, regulated fares will rise annually by RPI +1% in line with Government policy, while unregulated fares are expected to increase by an average of RPI + 3.4% per annum.

The East Midlands rail franchise will operate trains from the new St Pancras International station, providing direct connections with Eurostar services to Paris and Brussels following the opening of the Channel Tunnel Rail Link.

The key highlights of the new franchise, which will be operated under a single overarching brand and managed from headquarters in the East Midlands, include:

Improved journeys and improved punctuality

• Faster journeys to Sheffield (2h08mins) and Leicester (1hr07mins) from London as part of a new timetable in December 2008 with potential further infrastructure-based improvements thereafter
• Additional early morning train from Derby to cater for high levels of morning peak demand
• Further features of the December 2008 timetable change include:
  • A new daily direct service between London and Lincoln
  • An hourly Nottingham-Matlock service
  • An additional off-peak service each hour from London, allowing a new train service exclusively to serve stations south of Leicester
• Performance plans that will help improve the public performance measure (PPM) to 90.4% from 83.6% by focusing on poorer performing regional services and trains

Fleet improvement and capacity

• Significant increase in capacity, with more than 850 extra mainline peak seats into and out of London and an increase of nearly 10,000 off-peak seats per weekday
• Increasing main line frequency to five trains per hour between the peaks
• Bring forward first morning train arrival into London to provide an integrated connection to Eurostar for business passengers travelling to continent
• Additional high speed train set from June 2012 to increase capacity in time for the Summer Olympic and Paralympic Games
• A 35% increase in capacity on Norwich-Liverpool weekday services
• A 9% increase in weekday capacity on other regional routes
• A £26.5m fleet interior and performance improvement programme, including décor, seats, on-train CCTV and technical modifications
• Significant investment at Derby train maintenance depot (Etches Park), which will become the centre of train maintenance operations

Security

• A centralised Information and Security Centre to respond to Help Point requests and monitor CCTV cameras
• Additional CCTV cameras at 12 stations and mobile security staff coverage for stations and trains
• More than 60 new or upgraded Help Points at 35 stations
• Senior Conductors, Train Managers and Revenue Protection staff equipped with PDAs to improve information provision and security for customers
• Secure Station Accreditation covering 87% of passenger journeys on the franchise
• More visible staff presence on trains and at key stations to improve personal security
• Accreditation of three further secure station car parks

Fares and Ticketing

• Investment in Smartcard technology to make ticket purchasing much easier
• Promotion of internet purchasing and telesales
• Introduction of megabus.com fares
• Flexible ticket options, with different prices depending on the time of travel, including a trial to attract passengers to the shoulder peak using Smartcard
• Installation of around 70 new self-service ticket vending machines to reduce ticket office queues and provide ticket retailing at locations such as Syston and Sutton Parkway for the first time
• Introduction of automatic gates at four additional stations to improve security and reduce ticketless travel, resulting in nearly 90% of passenger journeys being gated at least at one end

Station enhancements

• A £5m station investment, including a programme at the busiest stations covering:
  • refurbishment of waiting rooms, shelters, booking halls and toilets, improved internal lighting, replacement seating, new cycle racks and repairs to forecourts.
  • fitting out East Midlands Parkway station building and completing access
• Repainting and new signage across all stations

Customer service and stakeholder relations

• New passenger charter with clear targets and compensation structure based on the ‘Delay Repay’ model supported by Passenger Focus
• Better customer information
• Provision of an additional 750 car parking spaces, in addition to 500 spaces at East Midlands Parkway funded by Network Rail and the DfT
• Improved links with local authorities and regional government agencies
• New dedicated management posts to improve stakeholder relations and manage a range of transport integration improvements, including additional cycle parking facilities, bus through ticketing and Community Rail partnerships

Corby Station and Rail Service

• A competitive option has been offered to the Department for Transport for the provision of rail services to a potential new rail station at Corby

ENDS

For further information, please contact:

NOTES TO EDITORS

East Midlands rail franchise

The East Midlands Franchise comprises:

• the former Midland Mainline franchise that operated high speed long distance services from London St. Pancras to Sheffield, Derby and Nottingham
• the regional services formerly operated by Central Trains between Nottingham and Derby/Lincoln/Cleethorpes/Skegness, between Derby and Crewe/Matlock/ and Norwich and Liverpool

It is planned that the franchise will run until 31 March 2015, the last year and 4 months of which will be conditional upon achieving pre-set performance targets.

Stagecoach Group

Stagecoach Group is a leading international transportation group, with extensive bus and rail operations in the UK and North America. The Group's businesses operate around 12,000 vehicles and rolling stock, and employ around 27,000 people.

Rail

Stagecoach operates the South Western rail franchise, which includes the South West Trains and Island Line networks. South West Trains, the UK's biggest commuter rail network, runs nearly 1700 trains a day in the south-west of England out of London Waterloo. Island Line, on the Isle of Wight, has been designated a Community Rail Partnership. In addition, Stagecoach has a 49% shareholding in Virgin Rail Group, which operates the CrossCountry and West Coast inter-city rail franchises.

Stagecoach operates the Supertram network in Sheffield, a 29km tram system incorporating three routes in the city, on a 27-year concession running until 2024.

Stagecoach Group plc has signed a contract with Greater Manchester Passenger Transport Executive (“GMPTE”) to operate and maintain the Manchester Metrolink tram network. The 10-year contract, which will commence in July 2007, involves the operation and maintenance of the 37km Manchester Metrolink system and the associated infrastructure. It will include managing a number of special projects sponsored by GMPTE to improve the trams and infrastructure to benefit passengers. Stagecoach Metrolink will also be responsible for operating tram services on the new Metrolink lines to Oldham, Rochdale, Droylsden and Chorlton.

A Stagecoach-Virgin joint venture, inter city – railways ltd, has been shortlisted for the InterCity East Coast rail franchise, which is expected to start in autumn 2007.

Virgin Rail Group has been shortlisted for the new Cross Country franchise, commencing in November 2007.