Serco selected for new Caledonian Sleeper rail franchise
28 May 2014
Serco Group plc, the international service company, has been selected by Transport Scotland to manage the new 15-year franchise for the Caledonian Sleeper service which is to be operated separately from the main ScotRail franchise. From April 2015, Serco will be responsible for operating all aspects of the Caledonian Sleeper including marketing, sales, passenger services, station facilities and fleet maintenance. To meet Transport Scotland's aim of transforming the service, over £100m will be invested in new rolling stock which, together with many other innovative changes, will give a dramatically improved customer experience. The Sleeper service provides a vital connection between London and Aberdeen, Edinburgh, Fort William, Glasgow, Inverness and many other of Scotland's main towns and cities.
Total revenue to Serco over the 15-year franchise period is estimated at up to £800m, of which approximately £180m will be in the form of franchise payments. A gain share agreement is included to incentivise performance improvements.
The new fleet, representing an investment of over £100m, is expected to be introduced by the summer of 2018. Reflecting their aspirations for the service, this is part-funded by a £60m capital grant from Scottish Ministers. The fleet, to be built by leading rolling stock manufacturer CAF, will be leased to Serco by Beacon Rail. Significant improvements include en-suite berths, Pod Flatbeds used for the first time in rail, and a brasserie-style Club Car. Customers will also benefit from being able to book through a new website with a much broader range of fares, earlier boarding of the trains, the ability to manage their journey virtually and use of many other new service features.
The new Caledonian Sleeper franchise is centred on creating an outstanding hospitality service that is emblematic of the best of Scotland. Serco will improve significantly the guest service using our extensive transport and tourism experience, together with that of our partners including leading Scottish hotel business Inverlochy Castle Management International (ICMI) and the Michelin-starred chef Albert Roux OBE KFO. Serco also plans to promote and support Scottish enterprise by sourcing local products and produce from small and medium-sized businesses. These changes, combined with the new sales and reservation system and other improvements in marketing, are anticipated to provide greater market penetration and growth in passenger numbers from UK residents travelling on business or leisure, as well as international tourists.
Rupert Soames, Serco Group Chief Executive Officer, said: "Serco has a strong track record of providing high quality and efficient rail services around the world, as well as experience in managing large-scale tourism-focussed transport services. I am delighted that we can use this unique blend of expertise to transform the iconic Caledonian Sleeper into a modern, high quality hospitality service to make Scotland proud. Serco has a very constructive relationship with many parts of Scottish Government and already operates essential public transport and many other services. With 3,000 Serco employees living and working in Scotland, we are tremendously excited to be delivering these new developments and meeting the vision of Transport Scotland."
Ends
For further information please contact Serco:
Stuart Ford, Head of Investor Relations T +44 (0) 1256 386 227
Marcus De Ville, Head of Media Relations T +44 (0) 1256 386 226
Serco's transport business
Serco delivers innovative transport solutions, whether by air, road, water or rail, to public transport authorities, government departments and commercial enterprises around the world.
Our focus on operational efficiencies and improving sustainability support our customers in meeting their strategic aims and objectives. Serco's experience in providing a wide range of multi-modal transport solutions in Europe, the Middle East, Asia and North America enables us to tailor our services to meet the needs of a diverse travelling public. Our aim is to ensure that by delivering high-quality services, we can make a difference to people's journeys and lives.
Serco has a successful track record and compelling offer in both the UK and global light and heavy rail markets. We operate Northern Rail, the UK's largest passenger rail franchise, as well as Merseyrail with our joint venture partner Abellio. Since 1997, Serco has operated and maintained London's award-winning Docklands Light Railway (DLR). In Australia, we own Great Southern Rail which operates iconic tourist trains - the Indian Pacific, the Ghan and the Overlander. And in the Middle East we have been operating the driverless Dubai Metro system since its inception 2008 and have recently secured a five-year extension to 2019.
Serco has operated NorthLink Ferries on behalf of the Scottish Government since 2012. The lifeline ferry service links the Orkney Islands and Shetland Islands with the UK mainland. Serco has refurbished the three passenger vessels and improved the services with innovative Sleeping Pods, new showering facilities, refreshed menus using more local produce, and better onward public transport connections. Serco has also invested in a marketing campaign, including partnerships with VisitScotland and local promotion bodies. Serco created a bold new brand for the service that is designed to excite tourists by using the Viking heritage of the Northern Isles.
Serco operates the iconic Barclays Cycle Hire Scheme in London on behalf of Transport for London (TfL). Launched in 2010, Serco designed, built and implemented this innovative scheme, in conjunction with TfL. Today, the scheme has seen over 26 million hires and has been expanded across the capital.
In the USA, Serco provides a bus transportation service to and from Washington Dulles International Airport for the US National Conservation Training Centre. We also provide on demand and scheduled bus services for the UK's Royal Air Force.
Serco is the only significant non-government provider of air traffic services in the world. We operate on a global basis and handle about six million aircraft movements each year at airports in Europe, the Middle East and North America on behalf of customers including the UK's Ministry of Defence, the US Federal Aviation Administration and the United Arab Emirates' Area Control Centre in Abu Dhabi.
Serco also recently secured a major US contract to integrate and operate the state of Virginia's five transport operation centres and the contract to operate the Dubai Tramway system.
About Serco
Serco is an international service company, which combines commercial know-how with a deep public service ethos.
Around the world, we improve essential services by managing people, processes, technology and assets more effectively. We advise policy makers, design innovative solutions, integrate systems and - most of all - deliver to the public.
Serco supports governments, agencies and companies who seek a trusted partner with a solid track record of providing assured service excellence. Our people offer operational, management and consulting expertise in the aviation, BPO, defence, education, environmental services, facilities management, health, home affairs, information and communications technology, knowledge services, local government, science and nuclear, transport, welfare to work and the commercial sectors.
More information can be found at www.serco.com
Forward looking statements
This announcement contains forward looking statements. The terms "expect", "anticipate", "may", "should", "will" and similar expressions identify forward looking statements. By their nature, these forward looking statements are subject to a number of risks and uncertainties and actual results and events could differ materially from those currently being anticipated as reflected in such statements. Factors which may cause future outcomes to differ from those foreseen in forward looking statements include, but are not limited to: general economic conditions and business conditions in Serco's markets; contracts awarded to Serco; customers' acceptance of Serco's products and services; operational problems; the actions of competitors, trading partners, creditors, rating agencies and others; the success or otherwise of partnering; changes in laws and governmental regulations; regulatory or legal actions, including the types of enforcement action pursued and the nature of remedies sought or imposed; exchange rate fluctuations; the development and use of new technology; changes in public expectations and other changes to business conditions; wars and acts of terrorism; and cyber-attacks. These forward looking statements speak only as of the date of this announcement. Except as required by any applicable law or regulation, Serco expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this announcement to reflect any change in Serco's expectations or any change in events, conditions or circumstances on which any such statement is based.
