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Ken Skates, Cabinet Secretary for Economy and Transport

First published:
9 November 2017
Last updated:

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I am writing to members following my written statement on rail issued on Monday 30 October.

In my statement I made clear that Arriva Rail Wales (ARW) had notified Transport for Wales (TfW) that they intended to withdraw from the bidding process underway to select an operator and development partner for the next Wales and Borders franchise and Metro.  It is not uncommon for bidders for major projects to withdraw during the tender process and ARW has been clear they have done this for their own commercial reasons.

The decision to withdraw was made solely by ARW and they have confirmed that this was driven by their own commercial analysis of the contract.

The competitive dialogue procurement process we are using is designed to find a world class operator and development partner for the new franchise and which can develop the innovative solutions needed to develop services on both the South Wales and North East Wales Metro projects.

We are being supported through this process by TfW. We continue to publish as much information about the tender process as soon as we can, allowing for the nature of the process. Once the service provider has been appointed, early next year, we will make further documents, including the tender document, publically available.

During the dialogue stage there was frequent engagement with all bidders to develop the commercial and technical terms of the tender in response to our priority outcomes. Our priorities have been summarised by TfW in Rail Services for the Future.  

Scheduled discussions between TfW and bidders continue during the current bidding phase, which is due to end on 21 December. Now formal tenders have been issued these discussions are limited to providing clarifications rather than negotiating changes. These discussions and clarifications are strictly confidential. No complaints have been received from bidders over the process or terms of the tender.  The process of Competitive Dialogue we have used was specifically designed to allow both bidders and Transport for Wales to surface issues of clarification and concern during the process as commercial and technical solutions were developed.

Following a 5pm telephone conference on Friday 27 October, ARW indicated to TfW that they intended to withdraw from the franchise process. ARW advised the senior management of Arriva Train Wales (ATW) on Monday 30 October of their decision. TfW issued a press release that same day, timed at the request of ARW in light of their desire to communicate to affected staff.

The TfW team managing the procurement on our behalf report that the other bidders remain fully engaged in the process.

Both TfW and the Welsh Government are now working with Arriva Train Wales (ATW), the arm of the Arriva group operating the current franchise, to ensure that the 2,500 staff employed by ATW are kept informed, so that the transition to their new employer next year does not disrupt them unduly and that they are able to continue to focus on providing rail services for Wales and the borders. TfW has established a dedicated de-mobilisation team to manage this transition.

TfW have sought assurances from ATW that all commitments relating to the existing franchise will be honoured in full. As Cabinet Secretary I will be working with TfW to closely monitor the delivery of those existing obligations.  We are working with ATW to deliver a number of key projects, on which the successful mobilisation of the next franchise will depend. These include the upgrade of elements of the existing fleet to ensure compliance with accessibility regulations, the mobilisation of a new fleet of four carriage trains and the deployment of Wi-Fi across trains and stations.

My primary concerns are that staff remain motivated; that services continue to operate smoothly for passengers across Wales and that we have a successful transition to the next Wales and Borders franchise operator in October 2018.

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