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8 October 2014, 12:00
The franchise to run Scotland's trains for the next decade has been awarded to Dutch rail operator Abellio, transport minister Keith Brown has confirmed.
The announcement comes after current Scotrail operator FirstGroup revealed it had failed in its bid to continue to run the rail service from the spring of 2015.
Mr Brown said Abellio will invest millions in providing an improved service and facilities for passengers and a better deal for staff.
"This is a contract that will benefit the whole of Scotland,'' he said.
FirstGroup, which was among five bidders to run the service from April 2015, said it was "disappointed'' by the news and that its bid would have delivered "even greater levels of service and growth''.
The new contract includes benefits for passengers such as free wifi on all trains, 23% more carriages across the network, reduced fares for jobseekers and high-speed intercity diesel trains, with over a third more seats.
Abellio will also introduce advance fares of £5 between any two Scottish cities, a great scenic railway scheme bringing more tourists to the north, the south west and the Borders, and major shopping developments at stations at Aberdeen and Inverness.
For staff, benefits include a commitment to paying the living wage for all staff and subcontractors, at least 100 apprenticeships and a guarantee of no compulsory redundancies throughout the life of the contract.
The contract is worth up to £6 billion and there will be a break clause after five years, Mr Brown said.
"We've already ensured that regulated rail fares will stay in line with inflation or less and Abellio has come up with some truly innovative ways to make rail even more affordable, such as the #5 intercity fare anywhere in Scotland and reduced ticket prices for jobseekers and those newly in work, as well as a price promise for guaranteed best value fares,'' he said.
"There will be benefits all over the country, with faster services between all our cities, new trains in the central belt, a great scenic railway scheme bringing more tourists to the north, the south west and the Borders, and major shopping developments at the stations at Aberdeen and Inverness. Glasgow will be the new base for Abellio in the UK with around 200 jobs.
"These exciting plans mean that our railways will continue to be innovative, passenger-led and a hugely important driver in Scotland's long-term success and sustainability.
Tim O'Toole, FirstGroup's chief executive, said: "Our bid would have delivered even greater levels of service and growth, and we are disappointed we will not have the opportunity to implement the credible plans we submitted, building on our record of improvement across every measurable score, for the benefit of ScotRail's passengers and employees.
"We shall continue to operate First ScotRail until the new franchise commences on April 1 2015.''
Mr O'Toole said that today's news does not alter the group's stated medium-term targets.
He said: "As one of the largest and most experienced rail operators we are actively participating in franchise competitions with the objective of achieving earnings on a par with the last round of franchising, with an acceptable level of risk.''
Union bosses reacted angrily to reports Abellio was to be handed the contract.
RMT general secretary Mick Cash said: "It is scandalous that just a few weeks after the referendum, and promises from all quarters that the Scottish people would have an increased say in every aspect of their lives, that the continued privatisation of Scotland's railways has been bulldozed through with the SNP colluding with the political elite in Westminster to deny the opportunity for this franchise to be brought back into public ownership.
"There is no question that this whole franchising process could and should have been halted, pending the ratification of the post-referendum devolution settlement, instead of rushing headlong into a deal that will deny the Scottish people ownership and control of their railways for many years to come.''
Patrick Harvie, Green Party MSP for Glasgow and transport spokesman for the Scottish Greens, called on ministers to give an assurance over the new ScotRail franchise.
He said: "It would be ironic to have a Dutch national railway company taking over most of Scotland's trains. While it would be great to see public transport run by a public-sector firm, it should be our public sector.
"We need an assurance from the transport minister that the optional five-year break in the ScotRail franchise will allow for a Scottish public sector operator to bid, assuming power is devolved from Westminster to allow it.''
The Dutch firm said: "Abellio is pleased to announce that Transport Scotland has confirmed its intention to award the ScotRail franchise to Abellio ScotRail Limited.
"Although we are not listed, an announcement will be made to this effect to the London Stock Exchange in due course.''