LONDON (Alliance News) - French transport group Kelois Amey Docklands has been awarded a new franchise from Transport for London to run the Dockland's Light Railway in London from December 7, 2014.
Keolis, a joint venture majority owned by French state rail operator SNCF, will operate and maintain the network until April 2021, with an option for this to be extended until 2023.
Transport for London said around 100 million passenger journeys are made on the DLR network annually and this new contract, which is valued in excess of GBP700 million, will see Keolis Amey Docklands work with TfL to ensure that passengers continue to see improvements to the service.
The Docklands Light Railway is an automated light metro system opened in 1987 to serve the redeveloped Docklands area of London.
TfL said that in 2018 Crossrail services between central London, Shenfield and Abbey Wood will begin to interchange with DLR at several stations ? Canary Wharf / West India Quay, Stratford and Custom House, where a set of new platforms, a new ticket hall and entrance are being constructed.
The French company has won the franchise following a procurement process which saw bids from UK companies including FTSE 250-listed companies Serco PLC and Stagecoach PLC.
There were four original bidders in the DLR competition: Go-Ahead/Colas, Keolis/Amey, Serco and Stagecoach. Go-Ahead/Colas withdrew from the competition before it reached its conclusion.
Support services company Serco has operated the DLR franchise since 1997 under two franchises. In a statement released ahead of the market open Friday the company said its rebid had been unsuccessful.
Serco said that the DLR contract generated revenue of approximately GBP90 million, or 2% of the group's overall revenues in 2013, at a margin that was significantly below the average level the group achieves on its contracts
Stagecoach also confirmed Friday that it had been unsuccessful in its bid for the DLR contract.
Through its Govia rail joint venture with UK bus and rail operator Go-Ahead Group PLC, Keolis already runs the Southern, Southeastern and London Midland UK rail franchises. In May the joint venture was awarded the giant new rail franchise covering a swathe of southeast England that will combine the existing Southern, Great Northern and Thameslink franchises. That seven-year deal begins in September.
Shares in Serco were trading marginally lower Friday morning, down 0.74% at 360.3 pence per share. Stagecoach shares were also slightly down, trading 0.37% lower at 383.77 pence per share.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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Serco (SRP)