ScotRail Franchise Replacement

ScotRail Franchise Replacement

Transport Scotland is implementing its procurement strategy for the replacement of the existing ScotRail Passenger Franchise.

United Kingdom-Glasgow: Railway transport services

2013/S 132-228852

Contract notice

Services

Directive 2004/18/EC

Section I: Contracting authority

I.1)Name, addresses and contact point(s)

Transport Scotland on behalf of The Scottish Ministers
Buchanan House, 58 Port Dundas Road
For the attention of: Sarah Aitken
G4 0HF Glasgow
UNITED KINGDOM
E-mail: transportscotlandcommercialunit@scotland.gsi.gov.uk

Internet address(es):

General address of the contracting authority: www.transportscotland.gov.uk

Further information can be obtained from: The above mentioned contact point(s)

Specifications and additional documents (including documents for competitive dialogue and a dynamic purchasing system) can be obtained from: The above mentioned contact point(s)

Tenders or requests to participate must be sent to: The above mentioned contact point(s)

I.2)Type of the contracting authority

Ministry or any other national or federal authority, including their regional or local sub-divisions
I.3)Main activity

General public services
I.4)Contract award on behalf of other contracting authorities

The contracting authority is purchasing on behalf of other contracting authorities: no

Section II: Object of the contract

II.1)Description
II.1.1)Title attributed to the contract by the contracting authority:

ScotRail Franchise Replacement
II.1.2)Type of contract and location of works, place of delivery or of performance

Services
Service category No 18: Rail transport services
NUTS code UKM

II.1.3)Information about a public contract, a framework agreement or a dynamic purchasing system (DPS)

The notice involves a public contract
II.1.4)Information on framework agreement
II.1.5)Short description of the contract or purchase(s)

Transport Scotland is implementing its procurement strategy for the replacement of the existing ScotRail Passenger Franchise. Under this notice Transport Scotland is seeking to appoint an appropriately experienced and qualified operator to operate the ScotRail Passenger Services Franchise (the “ScotRail Services”).
Expressions of interest are now being sought from the market. Shortlisted potential operators will receive the Invitation to Tender planned to be issued in January 2014. It is anticipated that the successful bidder will be announced in October 2014 with the contract commencing in April 2015.
It is anticipated that the maximum length of the franchise will be 10 years (subject to the exercise of a discretionary option to extend for up to 26 reporting periods). There will be an appropriate mobilisation period prior to the commencement of operations in April 2015.
The existing ScotRail Franchise currently includes the provision of the Caledonian Sleeper Services. From the expiry of the existing ScotRail Franchise, it is anticipated that the Caledonian Sleeper Service will be delivered under a separate Franchise Agreement. Transport Scotland is engaged in a separate procurement process for the Caledonian Sleeper Service.
The ScotRail Franchise will involve the operation of intercity services between Glasgow, Edinburgh, Inverness, Aberdeen, Perth, Dundee and Stirling together with a number of commuter, tourist and sub-urban routes.
The franchise operator will also be required to manage the delivery of the EGIP electrification programme and the procurement and delivery of the EGIP rolling stock.
The franchise operator will be required to actively promote social, economic and environmental interests in the delivery of the franchise. Contract performance conditions may therefore relate to particular social, economic and environmental considerations.
Further details will be set out in the Invitation to Tender.
II.1.6)Common procurement vocabulary (CPV)

60200000, 60210000, 34620000, 34622200, 34622400, 45234112, 80530000

II.1.7)Information about Government Procurement Agreement (GPA)

The contract is covered by the Government Procurement Agreement (GPA): no
II.1.8)Lots

This contract is divided into lots: no
II.1.9)Information about variants

Variants will be accepted: no
II.2)Quantity or scope of the contract
II.2.1)Total quantity or scope:

In 2011/12 the current ScotRail franchise received total revenue of GBP 614 000 000. This total revenue figure includes a subsidy payment made by the Scottish Ministers of GBP 298 000 000. Total operating costs (including fixed track access charges) amounted to approximately GBP 589 000 000 for the ScotRail Services. The estimated contract value is based on the estimated total revenue received in 2011/2012. No adjustment has been made for inflation. Unlike the current franchise, the new franchise is not intended to incorporate the Caledonian Sleeper Services (which is being procured separately). The total revenue figure above excludes revenue in respect of the Caledonian Sleeper Services, however the subsidy payment figure has not been adjusted and includes payments in respect of the Caledonian Sleeper Services.
The franchise operator will be required to procure and introduce new(or equivalent) rolling stock to complement the delivery of the EGIP infrastructure enhancements and will work closely with Transport Scotland to ensure that the envisaged services are delivered. This will include: procurement, delivery and introduction of new(or equivalent) rolling stock; working with Network Rail, the infrastructure provider, and the Office of Rail Regulation to facilitate the introduction of the rolling stock and any consequential alterations to depot facilities; managing the return of displaced stock to the owning ROSCO; proactively supporting the integration of operations and new infrastructure to deliver an enhanced train service; implementing the delivery, marketing and retail of enhanced passenger services.
The franchise operator will be required to deliver Wi-Fi accessibility across the network and smart ticketing systems across Scotland during the franchise term.
The franchise operator will be required to operate the timetable that is in place at the start of the contract, and to prepare for and implement the changes applicable at key dates throughout the franchise term. The franchise operator will also be expected to negotiate Track Access rights with Network Rail.
The franchise operator will be required to enter into Station Access Agreements with Network Rail and the relevant train operating companies for stations where the ScotRail Service will call. The franchise operator will be required to make available enhanced passenger facilities at designated stations.
The franchise operator will be required to provide sufficient traction capability and rolling stock to provide the ScotRail Services. The franchise operator will be required to enter into Depot Access Agreements with the relevant depot operators for light maintenance used to support the ScotRail Services.
The franchise operator will be required to work with the infrastructure provider to facilitate the introduction of major network upgrades. The franchise operator will also be encouraged to explore opportunities for forming an alliance or similar alternative arrangements with the infrastructure provider and to consider the extent to which resultant efficiencies can be captured in their bid.
Although Transport Scotland is undertaking a separate procurement process for the Caledonian Sleeper Service, a contract award will only be made under that process if Transport Scotland is satisfied that the procurement identifies a value for money solution which meets Transport Scotland’s objectives. If an award is not made as a result of the procurement process for the Caledonian Sleeper Service, Transport Scotland may seek to include the Caledonian Sleeper Service as part of the ScotRail franchise. In this event, bidders for the ScotRail franchise will be required to put forward bids which include the the focussed management and development of the Caledonian Sleeper Service and utilise the proposed GBP 50 000 000 – 60 000 000 capital investment to be made by the Scottish Ministers for improvements to the Caledonian Sleeper Service rolling stock.
The Franchise Agreement will be based on the current ScotRail Franchise Agreement updated in light of market developments and to reflect franchise specific requirements set out in the Ministerial Statement on rail delivered in June 2012.
It is anticipated that the Franchise Agreement will include a profit sharing mechanism. The Franchise Agreement will include a mechanism for revenue support and sharing and rebasing of the subsidy following an initial period of operation.
Transport Scotland may invite or require bidders to submit Priced Options which will be further detailed in the ITT.
It is anticipated that staff currently employed wholly or mainly in the delivery of the ScotRail Services will transfer to the franchise operator in terms of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Further details will be set out in the Invitation to Tender.
It is anticipated that the franchise operator will continue to contribute as employer to the First ScotRail section of the Railways Pension Scheme.
Estimated value excluding VAT: 6 150 000 000 GBP
II.2.2)Information about options

Options: no
II.2.3)Information about renewals

This contract is subject to renewal: no
II.3)Duration of the contract or time limit for completion

Duration in months: 126 (from the award of the contract)

Section III: Legal, economic, financial and technical information

III.1)Conditions relating to the contract
III.1.1)Deposits and guarantees required:

The potential provider appointed to operate the franchise should have sufficient financial backing to place a performance bond. It is anticipated the performance bond value for the ScotRail Franchise will bebetween £25 million and £35 million. The final performance bond value will be 5.5% of the total annual operating cost of the franchise.
The potential provider appointed to operate the franchise should also have sufficient financial backing to place a season ticket bond. It is anticipated the season ticket bond value for the ScotRail Franchise will be between £5 million and £6 million.
The potential provider appointed to operate the franchise will be required to have a covenanted liquidity ratio for the Franchise duration. The franchise operator will be required to provide a parent company loan facility (or equivalent form of liquidity) in support of its obligation under the franchise. The value of the parent company loan facility (or equivalent form of liquidity) will be determined in accordance with the criteria set out in the Invitation to Tender.
The potential provider appointed to operate the franchise may also be required to put in place an advance payment bond where a capital investment is made available through the ScotRail franchise.
III.1.2)Main financing conditions and payment arrangements and/or reference to the relevant provisions governing them:

Details to be provided in the contract documents.
III.1.3)Legal form to be taken by the group of economic operators to whom the contract is to be awarded:

The franchise operator will be required to form a special purpose vehicle.
III.1.4)Other particular conditions
III.2)Conditions for participation
III.2.1)Personal situation of economic operators, including requirements relating to enrolment on professional or trade registers

Information and formalities necessary for evaluating if the requirements are met: The franchise operator must be capable of obtaining operator licences for passenger rail services within the UK issued by the Office of Rail Regulation.
III.2.2)Economic and financial ability

Information and formalities necessary for evaluating if the requirements are met: The information and formalities necessary to assess whether a potential provider qualifies to receive an Invitation to Tender will be contained in the Pre-Qualification Questionnaire and associated documents.
III.2.3)Technical capacity

Information and formalities necessary for evaluating if the requirements are met:
The information and formalities necessary to assess whether a potential provider qualifies to receive an Invitation to Tender will be contained in the Pre-Qualification Questionnaire and associated documents.
III.2.4)Information about reserved contracts
III.3)Conditions specific to services contracts
III.3.1)Information about a particular profession
III.3.2)Staff responsible for the execution of the service

Section IV: Procedure

IV.1)Type of procedure
IV.1.1)Type of procedure

Negotiated
Some candidates have already been selected (if appropriate under certain types of negotiated procedures) no
IV.1.2)Limitations on the number of operators who will be invited to tender or to participate

Envisaged minimum number 3: and maximum number 5
Objective criteria for choosing the limited number of candidates: Transport Scotland anticipates issuing an Invitation to Tender to the top four ranked potential operators assessed in accordance with the criteria set out in the Pre Qualification Questionnaire and associated documents.
IV.1.3)Reduction of the number of operators during the negotiation or dialogue

Recourse to staged procedure to gradually reduce the number of solutions to be discussed or tenders to be negotiated yes
IV.2)Award criteria
IV.2.1)Award criteria

The most economically advantageous tender in terms of the criteria stated in the specifications, in the invitation to tender or to negotiate or in the descriptive document
IV.2.2)Information about electronic auction

An electronic auction will be used: no
IV.3)Administrative information
IV.3.1)File reference number attributed by the contracting authority:

TS/RD/SER/2013/04
IV.3.2)Previous publication(s) concerning the same contract

Prior information notice

Notice number in the OJEU: 2012/S 241-396562 of 14.12.2012

IV.3.3)Conditions for obtaining specifications and additional documents or descriptive document

Time limit for receipt of requests for documents or for accessing documents: 9.8.2013
Payable documents: no
IV.3.4)Time limit for receipt of tenders or requests to participate

23.8.2013 – 12:00
IV.3.5)Date of dispatch of invitations to tender or to participate to selected candidates

24.1.2014
IV.3.6)Language(s) in which tenders or requests to participate may be drawn up

English.
IV.3.7)Minimum time frame during which the tenderer must maintain the tender
IV.3.8)Conditions for opening of tenders

Section VI: Complementary information

VI.1)Information about recurrence

This is a recurrent procurement: no
VI.2)Information about European Union funds

The contract is related to a project and/or programme financed by European Union funds: no
VI.3)Additional information

The franchise procurement process is being undertaken in pursuance of the Railways Act 1993 (as amended). Bidders’ attention is drawn to the legal powers and duties of the Scottish Ministers set out in the Railways Act 1993 (as amended), including the provisions in section 25 that preclude a public sector operator from being a franchisee under the Act but would not preclude a not-for-dividend operation.
The Franchise Agreement will be either a Part B Services Contract or a Services Concession Contract and is
out with the full scope of the Public Contracts (Scotland) Regulations 2012. Transport Scotland has elected to
treat the Franchise Agreement as a Part B Services Contract for the purposes of the procurement. Transport
Scotland is therefore voluntarily utilising an OJEU Notice. The process by which the procurement will operate
will be set out as appropriate in the Pre-Qualification documentation and the Invitation to Tender, and will be
compatible with any applicable EU law.
Transport Scotland will require to confirm that the subsidy granted to cover the costs incurred in discharging the obligations under the Franchise Agreement has been calculated in a way that prevents over-compensation in accordance with Regulation (EC) 1370/2007.
Transport Scotland expressly reserve the right (i) not to award any contract as a result of the procurement process commenced by publication of this notice; and (ii) to make whatever changes it may see fit to the content and structure of the tendering competition and the contracts; and in no circumstances will Transport Scotland be liable for any costs incurred by the bidders.
VI.4)Procedures for appeal
VI.4.1)Body responsible for appeal procedures
VI.4.2)Lodging of appeals

Precise information on deadline(s) for lodging appeals: Transport Scotland will incorporate a standstill period at the point that information on the award of the contract
is communicated to tenderers. That notification will provide full information on the award decision. The standstill period, which will be for a minimum of 10 calendar days, provides time for unsuccessful tenderers to challenge the award decision before the contract is entered into. An economic operator that suffers, or risks suffering, loss or damage may bring proceedings in the Sheriff Court or the Court of Session.
VI.4.3)Service from which information about the lodging of appeals may be obtained

VI.5)Date of dispatch of this notice:5.7.2013