27th Jun 2014 08:00
LONDON (Alliance News) - National Express Group PLC Friday retained its c2c Essex Thameside rail franchise for a further 15 years, after committing to investments of GBP160 million in new trains, more peak-time services, station improvements, and adding free wifi on trains and at stations.
In a statement, the UK government's Department for Transport said the new franchise will run until November 2029, and the award reflected c2c's "impressive" performance on the franchise so far.
c2c, which runs the services between London and towns like Barking, Basildon and Southend, often comes out near the top of passenger satisfaction surveys.
The government said National Express has agreed to invest in 17 new trains, adding 25,000 more seats each week during morning peak time by the end of the new contract, as well as investing over GBP30 million in improving stations including Fenchurch Street in London and Barking.
The operator has also committed to hitting tough new targets for punctuality, with more than 90% of services required to reach their destination within one minute of the timetable by December 2018, the government said.
In its statement, National Express said it will add 68 new train carriages and upgrade the existing fleet. It will add 438 services in and out of London every week from December 2015, and will invest GBP33 million in station upgrades. A total of GBP5.3 million will be spent redevloping Barking station, and GBP1.7 million upgrading Fenchurch Street.
The company added that it will make around GBP1.5 billion of payments to the UK government over the life of the franchise. Based on Department for Transport methodology, the net present value of the franchise payments is estimated to be GBP1.1 billion, it added.
"National Express will support c2c's commitments by providing parent company guarantees for both capital expenditure funding and liquidity funding. External bonds will cover 50% of liquidity funding and a GBP6 million performance bond, together with the usual season ticket bonding," it said.
National Express shares were up 2.9% at 255.3 pence early Friday, the top gainer on the FTSE 250.
By Steve McGrath; [email protected]; @SteveMcGrath1
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