Fresh blow for FirstGroup as it loses ScotRail franchise to rival Abellio

The Scots will have a new company running their trains

The Scots will have a new company running their trains

Transport Scotland has informed FirstGroup that it has not been re-awarded the new ScotRail franchise, losing out to Dutch-owned company Abellio.

Abellio won the £6bn, 10-year contract, where current operator FirstGroup has held the contract since 2004. The news comes only months after FirstGroup missed out on the new mega-franchise to replace the Thameslink, Southern and Great Northern franchises, the former where it was the incumbent.

Scottish transport minister Keith Brown said the franchise would secure 23% more carriages, high-speed intercity diesel trains with a third more seats, advance fares of £5 between any two Scottish cities and regulated fares to be held in line with inflation, and reduced fares for jobseekers. Abellio announced Glasgow would be its new base in the UK, bringing 200 jobs to the city.

Jeff Hoogesteger, CEO of Abellio Group, said: "This is a huge day for Abellio and indeed the Netherlands... Abellio is delighted and incredibly excited to have been given this opportunity to manage Scotland's national rail network."

FirstGroup chief executive Tim O'Toole, commenting on a day shares in his firm fell in value by nearly 5%, said the operator had "delivered its promises and more for ten years, including Scotland's biggest ever timetable of 2,300 services each day, up by 300, attracting 34% more passengers".

The announcement did not "alter the group's stated medium-term targets," he said. "We are actively participating in franchise competitions with the objective of achieving earnings on a par with the last round of franchising - we are in negotiations with the DfT to operate the First TransPennine Express franchise until February 2016, and continue discussions in respect of a potential longer direct award to operate First Great Western."