13th Dec 2006 08:25
Stagecoach Group PLC13 December 2006 13 December 2006 STAGECOACH GROUP WELCOMES NEW COMMERCIAL TERMS FOR VIRGIN WEST COAST RAILFRANCHISE Stagecoach Group ("Stagecoach") today welcomed the announcement that Virgin RailGroup ("VRG") and the Department for Transport ("DfT") have agreed newcommercial terms for the West Coast franchise. The agreement puts the franchise, which has been operated by VRG since 1997, onnew commercial terms that will run through to March 2012. Stagecoach has a 49% shareholding in VRG, which has operated the franchise on amanagement contract since July 2002. It followed the collapse of Railtrack andchanges to the infrastructure upgrade to the West Coast main line, whichprevented VRG from operating 140mph trains. Passengers will now benefit from a range of improvements, including: €10 million extra seats a year from December 2008 on West Coast routes between London Euston and the West Midlands, the North West, Cumbria and Scotland •a 32% increase in daily train services from December 2008 •a new timetable and enhanced frequencies •continued management focus on improving punctuality even further Under the deal, VRG plans to significantly increase the number of passengerjourneys from the current level of 20 million a year in 2006-07. Separate proposals being discussed with the DfT would provide a further 10million extra seats by adding two cars to each of VRG's 53 nine-car Pendolinotrains. Brian Souter, Stagecoach Group Chief Executive, said: "This new sustainablecommercial franchise is an excellent deal for passengers, taxpayers and ourshareholders. "It will give Virgin West Coast a strong platform for growth over the next fiveyears, allowing us to improve even further Britain's fastest growing railfranchise. "Following Stagecoach Group's successful bid for the 10-year South Western Railfranchise, this new agreement will give us the opportunity for a furthersignificant revenue stream and we look forward to developing our rail portfoliofurther in the future." Passenger volumes on West Coast grew by 21% in 2005-06, the biggest growth inthe UK rail industry, and similar growth figures are continuing on much of thefranchise. It follows a £1.1 billion investment in a fleet of state-of-the-art Pendolinotilting trains with enhanced levels of safety and performance as well as loweremissions. Combined with improved levels of punctuality, this has resulted in some 90% ofVirgin West Coast customers now being satisfied with their travel experience. Virgin West Coast will receive £1.36 billion in public funding support until 31March 2012. The support is mainly to contribute to Network Rail track accesscharges, which rise steeply to around £500 million each year from 2008-09 linkedto the £8.6 billion costs of the West Coast main line modernisation project. Ends For further information, please contact: Stagecoach Group •Martin Griffiths, Finance Director, 01738 442111 •Steven Stewart, Head of Media and Public Affairs, 01738 442111 or 07764 774680 Smithfield Consultants •John Kiely, 020 7360 4900 Notes to Editors Stagecoach Group Stagecoach Group is a leading international transportation group, with extensivebus and rail operations in the UK and North America. The Group's businessesoperate around 12,000 vehicles and rolling stock, and employ around 27,000people. Stagecoach operates South West Trains, the UK's biggest commuter rail franchise,which runs nearly 1700 trains a day in the south-west of England out of LondonWaterloo. The Group also runs Island Line, the country's smallest railfranchise. The Department for Transport announced in September 2006 that Stagecoach hadbeen selected to operate the new 10-year South Western franchise, which combinesSouth West Trains and Island Line and runs from February 2007. Stagecoach Group is shortlisted for the East Midlands rail franchise, which runsfrom November 2007. Stagecoach operates the Supertram network in Sheffield on a 27-year concessionrunning until 2024. Stagecoach Group has been shortlisted to submit a final bid to operate thecurrent Manchester Metrolink tram network. Greater Manchester PassengerTransport Executive (GMPTE) has invited Stagecoach to submit a Best and FinalOffer to run the existing system and carry out tram maintenance. Stagecoach hasalso been asked to submit its proposals for a combined operating, systems andinfrastructure maintenance contract. The 10-year contracts would run from 1April 2007. Virgin Rail Group Virgin Rail Group is owned 51 percent by Virgin Group and 49 percent byStagecoach. Virgin Trains is the brand name of Virgin Rail Group and operates two railfranchises - West Coast Trains and CrossCountry Trains. Both franchisescommenced in 1997. Virgin Rail Group is bidding to win the New Cross Countryfranchise, which is due to start in November 2007. Virgin Rail Group was awarded the West Coast franchise in January 1997 andoperations started in March 1997. West Coast Trains was put onto the Letter Agreement in July 2002 following thecollapse of Railtrack and the delays to the major upgrade of the West Coast mainline. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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