Serco Group plc, the international service company, has been informed by Transport for London (TfL) that it has been unsuccessful in its rebid for the franchise to manage, operate and maintain the Docklands Light Railway (DLR). The current franchise, which was due to end on 14 September, has been extended to 7 December 2014, at which point the service will transfer to the new franchisee. In 2013, the DLR franchise generated revenue to Serco of approximately £90m, or 2% of the Group's overall revenues, at a margin that was significantly below the average level the Group achieves on its contracts.
Serco has been proud to operate the DLR since 1997 under two consecutive franchises, carrying over one billion passengers and achieving award-winning improvements in service reliability and customer satisfaction. It now stands as one of the highest-performing light rail systems in the world, and in the last twelve months has delivered in-service reliability of over 99%. We are also proud of our flawless delivery of transport services during the Olympics, when we carried more than double the normal number of passengers.
Commenting on the announcement, 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. I would like to thank all our colleagues who have worked hard to deliver what is a world class service and we are very proud of what we have all achieved for the citizens of London over the past seventeen years. We remain excited by the opportunities we see to transform services for passengers in the transport market, as illustrated by the recent award of the 15-year contract to run the Caledonian Sleepers service for Transport Scotland.
"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."