The race for the next Wales and Borders franchise, which includes design and build of the South Wales Metro, has gone down from four to three with Arriva Rail Wales, which was working with Costain on the bid, pulling out.
The three left in the race are: Abellio Rail Cymru, which is working with Aecom and Carillion; KeolisAmey; and is MTR Corporation (Cymru), which is working with Bam Nuttall.
The £5bn Operator and Development Partner (ODP) contract will involve the operation of the Wales and Borders rail franchise and the design and build of a metro-style service on the Core Valleys Lines. It also involves subsequent infrastructure management of the Core Valleys Lines (the lines which will be used for the Metro), the operation of rail and related aspects of the South Wales Metro service, and the design and development of further rail schemes in Wales.
Heavy rail infrastructure outside of the Core Valley lines will remain with Network Rail.
For the Core Valley lines responsibility will transfer to the Welsh Government through Transport for Wales (TFW), subject to an agreed evaluation of the assets between Network Rail and the Welsh government.
Last week TfW held an information day for the supply chain to find out how it can get work from the Metro plans worth £1bn.
The Welsh government economy and infrastructure secretary, Ken Skates, told the BBC that the Metro was hugely ambitious and tenders would be based on innovation and creative solutions.
“We want larger companies to work with smaller companies to develop skills and create a win-win scenario,” he said.
Procurement has followed a more collaborative model with bidders making proposals, rather than the Welsh government issuing a set of specifications.
The deadline to submit final tenders is 21 December, with the final decision made in the Spring and the winning bidder starting in October 2018. Mott MacDonald has provided engineering consultancy to TfW for the project.
A spokesperson for TfW said: “Arriva Rail Wales have notified Transport for Wales that they intend to withdraw from the bidding process for the next Wales and Borders rail franchise. It is not uncommon for bidders for major projects to withdraw during the tender process and Arriva have been clear they have done this for their own commercial reasons.
“The procurement process is a tough and demanding one and we recognise Arriva’s extensive work to date. We would like to thank the company for their support and positive attitude since the procurement started and we will continue to work closely with the company to ensure that existing staff and customers are central to our transition planning over the next 12 months.
“With final tenders due later this year, we have three companies with world-class credentials each putting their own, distinct cases for how they will deliver the ambitious objectives we set, with the goal of delivering a step change in rail services for passengers across Wales and Borders.”
An Arriva spokesperson said: “Arriva is no longer participating in the Wales and Borders competition. This has not been an easy decision and we wish TfW well in concluding this competition.
“Arriva has been providing rail transport in Wales for almost 14 years and we are proud of the service improvements we have delivered over that period. We will continue to work constructively with TfW to help make the next franchise a success and build upon the legacy that Arriva has built with Arriva Trains Wales, and we remain fully committed to delivering for our customers.”
Arriva Trains Wales managing director Tom Joyner added: “We have been notified that Arriva Group have withdrawn from the bidding process for the next Wales and Borders franchise.
“Our key priority following this announcement is to continue to focus on the delivery of our services for the people and communities that depend on us for the remainder of the current franchise, including a £1m Arriva Trains Wales investment in additional trains which will be introduced in 2018.
“We will continue to work closely with our government and industry partners to support them with the delivery of their priorities.”