Abellio ends rail bid after Carillion collapse

One of the three remaining bidders for the next Wales and Borders rail franchise has pulled out.

Abellio Rail Cymru (ARC) said it had been unable to overcome the collapse of its partner construction company, Carillion.

Its exit from the process leaves just MTR and KeolisAmey bidding to run the franchise, which will operate the South Wales Metro.

Existing franchisee Arriva dropped its bid last year.

Abellio took its decision after much of Carillion's rail assets were bought by rival Amey, which is involved in one of the rival bids and left it unable to continue.

The Wales and Borders franchise, which operates much of the country's railway network, will be awarded by the Welsh Government via new railway quango, Transport for Wales, this year.

In a statement, Economy Secretary Ken Skates said the Dutch-owned company "has taken the regrettable decision to withdraw its bid having been unable to overcome the impact of Carillion's liquidation".

One of the three firms involved in the Abellio bid - Aecom - had wanted to purchase Carillion's rail assets which may have allowed the bid to continue.

Plaid Cymru's Adam Price said the news demonstrated "amateurism" on behalf of the Welsh Government and was not good news for Welsh rail users.

He said: "Following the profit warnings last year from Carillion... the Welsh Government should have insisted on Abellio including alternative partners in its bid.

"Both in the case of Arriva Trains Wales and Abellio, Welsh Government inaction has now resulted in the loss of 50% of the bidders and 50% of the ideas," he said.

Conservative AM Russell George called for an assurance "that the remaining two bidders are sufficiently able to deliver on the franchise's objectives".

The statement from Mr Skates makes clear that the Welsh Government were told on Thursday evening - a day before the announcement was made.

"That Welsh Government has waited a full 24 hours before announcing this latest turn of events is disappointing and follows a now familiar pattern of burying bad news during recess," Mr George added.

Mr Skates said Transport for Wales (TfW), the body set to award the devolved franchise, had raised Carillion's share price drop in July 2017 with the company.

"At this point ARC considered options but elected to stay with its consortium partner, Carillion," the economy secretary said.

"As a consequence TfW required independent financial guarantees by a bank for Carillion's performance."

He added: "We have two strong bidders remaining in the process and remain on target to award this exciting contract in May 2018 and to transform rail services in Wales and borders from October 2018."

An Abellio spokesman said: "Following the liquidation of Carillion PLC on Monday 15 January, Abellio Rail Cymru has taken the decision to withdraw from the Contract Letting Process for the Wales and Borders Rail Service and South Wales Metro competition."