A view: UK Abellio management buyout should offer some confidence to bus and rail sector
Interesting news from Abellio yesterday as they agreed to a Management Buy-out of its UK rail and bus operations.
Interesting news from European bus and rail operator Abellio yesterday as they agreed to a Management Buy-out of its UK rail and bus operations. For the moment, a fleeting reminder of the various MBOs attempted at privatisation, some of which navigated the infant franchising process and others which didn't have that success (including the one I was involved with).
Whilst this might be considered as difficult news for attracting increased competition to the transport market, particularly to rail's Passenger Service Contracts, it does represent confidence in the UK market by this management team and its backers.
It's important to note that Abellio decided to handback their German rail concessions in December 2021 pursuant to the emergent strategy of focusing on operating domestic and international services in and to/from the Netherlands.
As UK bus franchising nears closer and the rail concession design will emerge, we will continue to need an active private sector. It's great to hear we will shortly have a potential new player in the market with experienced hands at the helm. It's also great to see NS supporting them during the transition period as they navigate the formal hurdles ahead.
So, as some commentators this morning see some bad news in the announcement about a weakening of competition in the market, I personally am more positive about it. There has been a history of MBOs working in both the bus and rail sectors, and arguably the concession model in rail and the franchise model in some bus markets might better enable fledgling organisations to accept and finance the bid and operating risks associated with those models.
A management buyout from the state-owned rail company, Nederlandse Spoorwegen will pave the way for a new UK-based company to take over all Abellio UK’s existing services, serving millions of rail and bus passengers in London, Liverpool, the Midlands and East Anglia. The new company will be called Transport UK Group Limited.
