Serco JV awarded extension on Northern Rail franchise

27th Mar 2014 07:48

Support services firm Serco Group on Thursday announced that, together with its 50/50 joint venture (JV) partner Abellio, it has signed a 22-month interim franchise agreement with the Department for Transport (DfT).The JV will continue to operate the Northern Rail franchise on behalf of the DfT until February 2016, with Serco earning an estimated £520m over the length of the contract. The agreement, which was co-signed by all five North of England Passenger Transport Executives (PTEs), enables Northern Rail to continue to operate local and regional rail services across the north of England. David Stretch, Serco's Managing Director for Transport Services, said: "Serco has a strong track record of providing high quality rail services in the UK and internationally. We are delighted that the strong performance of our partnership with Abellio, and focus on doing the right thing for our passengers, has been recognised with the award of this new contract [...]"We look forward to continuing to work alongside Abellio, the PTEs and other regional stakeholders to help drive improvements and greater efficiencies - benefiting both our fare-paying passengers and the taxpayer."The new interim agreement, which is anticipated to be run at a lower profit margin than the existing franchise, includes a gain share agreement to provide incentives to drive continued performance improvements.During its time working on the franchise so far, the JV has improved punctuality from 84% to 90%, fleet reliability has doubled, and in the most recent measure of public performance for UK railways, Northern Rail scored 90.9%, above the national average. NR