The Scottish Government has announced that its contract with Abellio ScotRail will cease in 2022.
Speaking in the Scottish Parliament on Wednesday afternoon, transport Secretary Michael Matheson confirmed that the current franchise agreement will come to an end early.
Addressing fellow MSPs, he claimed that extending the current contract with Abellio would not deliver the required “benefits for passengers, communities and the economy”.
He added the current contract commenced in 2015 and was let by the Scottish Government through “open commercial competition”.
Transport secretary Michael Matheson said Abellio ScotRail contract will not be "re-based". Says ministers are not satisfied re-basing would be good value for money.
— Paul Malik (@C_PMalik) December 18, 2019
The government and Abellio ScotRail could have agreed to “re-base” the contract – but ministers have decided against this.
Instead the agreement will be terminated in March 2022.
Abellio said the government’s decision has placed “unnecessary uncertainty” on thousands of members of staff.
Mr Matheson said: “The benefits that our railways bring are well-rehearsed. They help our economy grow, they connect our cities ab our communities with jobs, education, health services and leisure activities.
“Our commitment to investing in rail is unquestionable.
“It is therefore vital that as we make those considerable investments we do so in a way which ensures best value both for passengers and for taxpayers.”
He added: “After careful consideration Scottish ministers have decided not to re-base the contract.
— Transport Scotland (@transcotland) December 18, 2019
“We are not satisfied that the significant increase in public subsidy that would otherwise be required would generate commensurate benefits for passengers, communities and the economy.
“As such we do not consider that re-basing would secure the delivery of the policy objectives that underpin the current franchise.
“I can confirm that I have today issued a notice to inform Abellio ScotRail of the decision. Therefore the current franchise agreement is expected to come to an end in March 2022.
“The existing provisions within the franchise agreement continue as…there have been both successes and challenges over the first five years of the franchise. We have maintained a good working relationship with Abellio ScotRail throughout that period.
“I fully expect that to continue throughout the remainder of the contract. I believe that the decision that I’ve advised the parliament of today in respect of the ScotRail franchise is the right one for passengers, communities, the economy and for taxpayers.
“It is of course necessary to plan for the future and future provision of ScotRail services and I can confirm that work has already been under taken to examine the options open to Scottish ministers after the current contract comes to an end.
“This will of course mean regular engagement with trade unions and with other stakeholders.”
Reacting to the Scottish Government’s decision, managing director of Abellio UK Dominic Booth said: “We are hugely disappointed by this decision and believe it’s the wrong choice for Scotland’s railway and its customers.
“Abellio has invested more than £475million in new and upgraded trains, added 23% more seats for customers and created more than 500 extra jobs in Scotland since the start of the franchise in 2015 – the biggest investment in trains and stations in over 150 years.
“Our offer to Transport Scotland would have delivered an improved service for our customers at a reduced cost to the taxpayer.
“We will remain fully committed to running a safe and reliable service until the end of the contract in 2022.
“While this decision creates unnecessary uncertainty for more than 5,200 staff and our customers, we will maintain our focus on delivering vital projects for Scotland’s railway and seeing through the delivery of significant customer benefits until 2022.”
The UK train drivers’ union ASLEF has welcomed the decision to strip Abellio ScotRail of the contract.
Scottish organiser of the union Kevin Lindsay said: “We are delighted by the decision announced today because we have argued for a long time that Abellio has been letting down passengers and staff here in Scotland.
“We also welcome the opportunity for a public service provider to bid to run the franchise in two years’ time.
“Those of us on the front line – ScotRail train drivers and other railway staff – can see every day how the company comes up short.”
However he said the Scottish Government should have used the opportunity to return the country’s railways into public ownership.
Mr Lindsay said: “ASLEF has consistently called for the railway to be brought back into public ownership.
“That will be better for passengers, better for staff, better for businesses, and better for taxpayers.”
Those of us on the front line – train drivers and other railway staff – can see every day how #ScotRail comes up short. We therefore welcome the decision to end the franchise early but continue our calls for Scotland's railway to return to public ownership https://t.co/Y7AJTQNQZF
— ASLEF (@ASLEFunion) December 18, 2019