Abellio won ScotRail on quality, not price
Abellio won the new ScotRail franchise with a bid that required £29m more subsidy than second placed National Express Group but was rated significantly higher in quality.
Information released to Passenger Transport by Transport Scotland shows that Dutch group Abellio will receive £776m subsidy over the seven-year contract. One bidder, understood to be National Express, required lower subsidy (£747m) but lost out due to Transport Scotland’s view of the quality of its proposals. Abellio’s quality score (70.7) was the highest of any bidder competing for the franchise and well ahead of any of its rivals. National Express’s quality score (62.8) was the lowest.
The formula for awarding the contract was weighted 65% on price and 35% on quality. When both factors were taken into account, Abellio beat NEG by just 0.24%. Analysis of the bid scores shows that if NEG had received the quality rating awarded to any other bidder, it would have won the contract.
Abellio’s plan for the new franchise, which begins in April, includes: increasing the number of carriages by 23%; providing quicker, higher quality intercity services by replacing the current rolling stock with refurbished HSTs; a new range of cheaper more flexible fares; and major integrated transport and station development programmes (PT094).
However, a National Express spokesman told Passenger Transport that NEG was “baffled” by Transport Scotland’s decision and the quality ratings. NEG’s bid included new trains for Scotland’s seven intercity routes compared to the 35-year-old HSTs that Abellio will source from Great Western or East Coast after those franchises receive new Intercity Express stock. NEG believes its offer would also have provided faster journeys than Abellio’s. It is understood that a further cause of consternation to NEG is that its bid included customer service innovations that contributed to its successful Essex Thameside bid receiving the highest quality score from the Department for Transport in that competition.
NEG considered a judicial review of the decision, but opted not to proceed.
The information released by Transport Scotland also shows that the other bidders – incumbent operator FirstGroup, Arriva and MTR – were all a considerable way behind the top two. The third placed bidder, thought to be First, required £65m more subsidy than NEG and £36m more than Abellio. Its quality score was comparable to NEG’s but well behind Abellio.
One bidder, which industry sources speculated was likely to be MTR, submitted a bid which required subsidy of £1.1bn. The high subsidy requirement meant it was knocked out of the competition automatically because the subsidy offered was over £175m more than the lowest priced bid.
