Caledonian Sleeper rail service to be nationalised by Scottish ministers

theguardian.com:

The Caledonian Sleeper rail service will be nationalised after Scottish ministers moved to terminate the operating company’s franchise agreement seven years early.

It will be operated by an arm’s length company owned by the Scottish government from 25 June, transport minister Jenny Gilruth told MSPs in Holyrood on Thursday.

The service, which connects Highland stations with London, has been operated by Serco since March 2015 and was due to run for 15 years until 2030.

But Gilruth insisted the decision to terminate the contract seven years early and take the service under the Scottish government’s control should not be seen as a reflection on the firm’s operation of the service.

She said: “The decision will provide a stable platform for the provision of Sleeper services and it will also provide certainty for staff and, of course, the travelling public.

“I would like to make it very clear that the Caledonian Sleeper staff will transfer to the Scottish government-owned entity, with their terms and conditions protected.”

The decision was taken when Serco attempted to renegotiate the agreement through a “rebase clause”, to ensure the loss-making service was on “a more sustainable financial footing”.

The Scottish government announced last year an offer to rebase the Serco contract did not represent “value for money”.

However, Gilruth added that the decision to bring the service into public hands would not be a permanent one, saying she and officials would continue to monitor “market conditions”.

John Whitehurst, managing director of Serco’s transport business, told BBC News that the company was disappointed that the Scottish government “did not ensure value for money by examining the possibility of a direct contract award to Serco”.

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