Train Services Agreement in relation to a fleet of class 350 electric multiple units and associated equipment

Overview

Direct Award of a 16-year Train Services Agreement for the provision of train maintenance services (including light and heavy maintenance and certain cleaning activities) in relation to Northern Trains Limited's ("Northern") leasing of a fleet of 37 Class 350/2 electric multiple units. Additional services will be provided to rectify damage arising from, for example, vandalism and accidents. The Train Services Agreement includes an ability for Northern to break the agreement after 8 years (in August 2034) where the rolling stock fails to meet performance targets in respect of reliability and availability. The fee is paid based on the mileage covered by the electric multiple units and this reflects the estimated value contained in this notice. The scope of standard services includes all maintenance planning, management of technical records, scheduled maintenance (including both light maintenance and overhauls), in-service and train recovery technical support, fault finding, the procurement and management (including maintenance, repair and overhaul) of all spares, maintenance and management of on-train systems, and certain interior and exterior cleaning of the electric multiple units. Additional services (being non-scheduled maintenance and repairs required due to, for example, damage, vandalism and accidents) may be provided on an ad hoc basis and charged as an additional cost using agreed hourly rates and, where stated, applicable parts rates. Based upon benchmarking data, it is estimated that the cost of additional services could total £14.02 million. The Train Services Agreement contains a right to transfer or sub-let the agreement to certain third parties in specified circumstances and an obligation for the service provider to enter into a direct agreement with the Secretary of State in parallel to the Train Services Agreement. The direct agreement permits the Secretary of State to call for a new contract in the event of the termination or expiry of Northern's services agreement with the Secretary of State. The duration of the new contract would typically be up to 3 years and the terms of the new contract and the circumstances in which the direct agreement can be relied upon are all unambiguously set out in the direct agreement. The Train Services Agreement also contains mechanisms under which additional services can be requested in the circumstances prescribed in the Train Services Agreement and can be modified to deal with a change in law, a change to the relevant consent or relevant rules or procedures, or a change in the Operator's Safety Management System (the "Change Provisions"). In the event that the agreement is transferred or sub-let to a third party, the direct agreement is relied upon by the Secretary of State or any of the Change Provisions are engaged, it is considered that these would be permitted modifications provided for in the contract.