Citing the British government's reform of the franchise system as well as major upcoming investments in the Great Western region, including redevelopment of Reading station, re-signalling and electrification of the Great Western Mainline, the Intercity Express Programme (IEP) and Crossrail, the group says it would be better placed to manage these projects and capture future benefits through a longer-term franchise agreement.
"We intend to bid for the new Great Western franchise reflecting the changed environment," says Mr Tim O'Toole, chief executive of First Group in a statement. "We will continue to operate First Great Western until March 2013 and will meet all of our obligations under the franchise agreement."
First made the announcement during the release of its preliminary results for the year to March 31, in which it revealed that it has made a contract provision of £59.9m against the franchise following the decision not to proceed with the extension. Overall the group reported a 6.5% increase in revenue to £2.27bn on its British rail services during the year, while operating profit increased by 23.1% to £108.7m.
In addition to Great Western, First also holds the TransPennine Express, Capital Connect, Hull Trains and Scot Rail Franchises. The company has pre-qualified for the West Coast franchise tender while it recently submitted a bid to the Department of Transport to extend the TransPennine Express franchise.
"We are focused on retaining our leadership position in UK rail and will continue to leverage our unrivalled expertise and experience," O'Toole says.
