French firm wins 7-year Docklands Light Railway franchise

Serco has managed the Docklands Light Railway since 1997

French transport group Keolis has been awarded a new franchise to operate London's Dockland's Light Railway (DLR) from December 2014.

Keolis will operate the franchise as Keolis Amey Docklands until April 2021, Transport for London (TfL) said.

The group is a joint venture between the SNCF subsidiary and Amey, the UK services group owned by Spain's Ferrovial

The transport group has an option to extend the franchise until 2023.

Serco, which has held the franchise since 1997, said it was "disappointed" not to have been selected to continue operating the rail line.

Keolis already runs the Southeastern, Southern and London Midland rail franchises through its Govia joint venture with Go-Ahead Group.

In May, it won a seven year franchise to run a the newly extended Thameslink rail network, the largest in the UK in terms of passenger numbers, trains, revenue, and staff.

In 2018, Crossrail services between central London and Shenfield in Essex and and Abbey Wood in south east London will begin to interchange with the DLR at several stations including Canary Wharf, West India Quay, Stratford and Custom House.

Reliability targets

Keolis, through Go-Ahead Group, is also in the running to operate Crossrail. Last year, it was selected to join a short list of four rail operators including National Express and Arriva.

A decision on who will run the £14.8bn railway line is expected by the end of this year.

TfL's managing director of London Underground and Rail, Mike Brown, said: "The DLR is a rail network that continues to support regeneration across a huge area of London and the economic growth of the city as a whole."

TfL will pay Keolis £700m over the life of the franchise but Keolis must meet strict reliability and passenger satisfaction targets.

David Stretch, managing director of Serco's transport business said: "We are obviously disappointed that we have not been selected to continue to manage and operate the DLR.

"We will continue to provide DLR passengers with the best possible service until the new operator starts later this year and we will work closely with them to ensure a seamless handover."

Serco said the DLR franchise contributed about £90m, or 2%, to its total revenues last year. Its share price fell 2.3% to 354.4p in early trade on the London Stock Exchange.