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Serco loses DLR franchise Serco loses DLR franchise
(about 14 hours later)
French firm Keolis is to take over the running of London's Docklands Light Railway from December. Troubled outsourcing group Serco has lost the contract to run London's Docklands Light Railway after 17 years. The driverless trains serving east London's inner suburbs and the financial centre of Canary Wharf will pass to French firm Keolis from December, having been run by Serco since 1997 over two consecutive franchises.
The driverless train service serving east London's inner suburbs and the financial centre of Canary Wharf has been run by Serco since 1997 over two consecutive franchises but it was beaten to the next contract by the SNCF-owned Keolis. The state-owned French company will initially run the service until 2021 as the majority partner in a joint venture with Amey, with responsibility for maintaining the stations, track and trains.
Keolis will take over the running of the service until 2021 as the majority partner in a joint venture with Amey, with responsibility for maintaining the stations, track and trains. The light railway, which carries 100m passengers a year, generated £90m for Serco last year, around 2% of its overall revenues.
Alistair Gordon, chief executive of Keolis UK, said: "This win is a major achievement for Keolis. As the world's largest operator of light rail networks Keolis looks forward to using our global expertise to enhance one of the capital's iconic public transport networks and we will work closely with all stakeholders to deliver a world-class service both during this franchise and beyond for London."
Around 100m passengers a year travel on the DLR.
Keolis could strengthen its grip on London transport as one of five shortlisted bidders (in a joint venture with Go-Ahead) to run Crossrail trains from 2015, when services partially open overground in east London. It currently runs a swath of the capital's commuter train services with Go-Ahead, as part of four rail franchises under their Govia partnership: Southern, Southeastern, London Midand, and Transpennine Express. In partnership with Eurostar, Keolis is also one of three firms shortlisted to take over East Coast main line trains.
Serco's loss of the DLR franchise is the latest blow for the embattled outsourcing group, which has become mired in a series of scandals and recently disclosed that 10 of its staff had been fired amid allegations of improper sexual contact with female detainees at the Yarl's Wood immigration detention centre.
On Thursday, Serco warned that it would have to write down the value of several big contracts relating to asylum seekers' accommodation centres and clinical healthcare, after its new boss, Rupert Soames, embarked on a review of the business. The move could dent annual profits, although for the time being the firm is sticking with previous guidance.On Thursday, Serco warned that it would have to write down the value of several big contracts relating to asylum seekers' accommodation centres and clinical healthcare, after its new boss, Rupert Soames, embarked on a review of the business. The move could dent annual profits, although for the time being the firm is sticking with previous guidance.
Serco said it was disappointed by the loss of the DLR, although profit margins on the rail service were significantly below the average it earns on contracts. In 2013, the DLR franchise generated for Serco around £90m, around 2% of its overall revenues. Serco said it was disappointed by the loss of the DLR, although profit margins on the rail service were significantly below the average it earns on contracts. Alistair Gordon, chief executive of Keolis UK, said: "This win is a major achievement for Keolis. As the world's largest operator of light rail networks Keolis looks forward to using our global expertise to enhance one of the capital's iconic public transport networks and we will work closely with all stakeholders to deliver a world-class service both during this franchise and beyond for London."
Around 100 millionm passengers a year travel on the DLR.
Keolis could strengthen its grip on London transport as one of five shortlisted bidders (in a joint venture with Go-Ahead) to run Crossrail trains from 2015, when services partially open overground in east London. It currently runs a swath of the capital's commuter train services with Go-Ahead, as part of four rail franchises under their Govia partnership: Southern, Southeastern, London Midand, and Transpennine Express. In partnership with Eurostar, Keolis is also one of three firms shortlisted to take over East Coast main line trains.
David Stretch, managing director of Serco's transport business, said: "We remain excited by the opportunities we see to transform services for passengers in the transport market, as illustrated by the recent award of the 15-year contract to run the Caledonian Sleepers service for Transport Scotland. We will continue to provide DLR passengers with the best possible service until the new operator starts later this year and we will work closely with them to ensure a seamless handover."David Stretch, managing director of Serco's transport business, said: "We remain excited by the opportunities we see to transform services for passengers in the transport market, as illustrated by the recent award of the 15-year contract to run the Caledonian Sleepers service for Transport Scotland. We will continue to provide DLR passengers with the best possible service until the new operator starts later this year and we will work closely with them to ensure a seamless handover."
Unions expressed fears over the upheaval ahead and said they were seeking an urgent meeting with Keolis to secure assurances. The RMT acting general secretary, Mick Cash, said: "RMT members on DLR are deeply concerned that we will be facing a major period of upheaval in the run up to December when Keolis takes over from Serco. RMT will fight to defend the jobs and working conditions of our members on DLR." Unions have expressed fears over the upheaval ahead and said they were seeking an urgent meeting with Keolis to secure assurances. The RMT acting general secretary, Mick Cash, said: "RMT members on DLR are deeply concerned that we will be facing a major period of upheaval in the run up to December when Keolis takes over from Serco. RMT will fight to defend the jobs and working conditions of our members on DLR."
Serco's loss of the DLR franchise is the latest blow for the outsourcing group, which has become mired in a series of scandals and recently disclosed that 10 of its staff had been fired amid allegations of improper sexual contact with female detainees at the Yarl's Wood immigration detention centre.