The Caledonian Sleeper service, which currently comprises two trains per day -London – Glasgow/Edinburgh and London – Aberdeen/Inverness/Fort William - is being separated out of the existing ScotRail franchise. Transport Scotland will invest between £50m and £60m, and although the tender document omits to say so, the British government will also invest £50m. This will enable the franchisee to either modernise the existing rolling stock, which is about 30 years old, or acquire a new fleet of trains.

The service had a turnover (excluding subsidy) of about £20m in 2011-12 but cost £25m to operate. The franchise agreement will include a mechanism for profit support, and it will be possible to rebase the subsidy during the franchise.

Transport Scotland says the investment coupled with the launch of a new brand and a reinvigorated approach to marketing should to lead to an increase in passenger numbers and revenues.

Transport Scotland plans to invite tenders from the top four potential operators in September with a view to announcing the successful bidder in June 2014. There will then be a nine-month mobilisation period with the new operator taking over in April 2015.

An interview with Mr Aidan Griswood, director of rail with Transport Scotland, appears in the April issue of IRJ. For the latest tender news, subscribe to Global Rail Tenders.