Arriva gains £1.4bn Dutch contract after Abellio ‘irregularities’

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15-year bus and rail concession awarded in wake of ‘unauthorised confidential information’ supplied by incumbent Veolia

Arriva has been awarded a £1.4bn bus and rail contract in the Netherlands after irregularities emerged with the original winning bidder, a subsidiary of Netherlands Railways (NS), the business which in the UK trades as Abellio.

The province of Limburg had selected Qbuzz subsidiary Abellio Limburg as the winner of a 15-year contract to operate local rail and bus services on February 10. However, on April 28 NS announced that an internal investigation had discovered ‘serious irregularities,’ with ‘unauthorised confidential information’ being supplied by a former employee of incumbent Veolia Transport Limburg who had been hired through an intermediary, despite being subject to a non-competition clause.

According to respected rail industry journal The Railway Gazette, the NS contract award was cancelled, with second-ranked bidder Arriva awarded the contract on June 2. Veolia’s bid for the new contract was rejected for exceeding the maximum budget. Arriva’s bid had been ranked second in the evaluation process, and the province said awarding the contract to the DB subsidiary would avoid the need to re-run the tendering process. NS had previously said it would respect any decision to exclude it.

NS said its ongoing investigation would leave no stone unturned. It is implementing a comprehensive action plan to review the effectiveness of its internal procedures, and is to appoint a director with responsibility for governance, risk management and compliance.

Timo Huges resigned as Chief Executive Officer of NS with immediate effect on June 5, after the supervisory board withdrew its confidence as further details emerged about the irregularities in the Qbuzz subsidiary’s bid for the Limburg operating contract. No severance payment will be made. Huges has been replaced on an interim a basis by Chief Financial Officer Engelhardt Robbe.

Announcing the departure of Huges, NS said its investigations had found that statements he had made about his contacts with the directors of Qbuzz were ‘inaccurate and incomplete.’ Abellio Holding CEO Jeff Hoogesteger will also leave without compensation, with Robbe taking over his role on a temporary basis.

According to the International Railway Journal, there have been talks in recent weeks between the provincial government and senior managers of NS, which has apologised for the behaviour of Abellio. However, the province is preparing a claim against Abellio, and potentially also NS, seeking compensation for losses caused by what it views as criminal and unfair practices.

Arriva will begin the 15-year Limburg contract on December 11, 2016 and will operate a fleet of 226 new buses which will serve towns and cities that include Maastricht, Heerlen and Roermond.

As part of the new contract Arriva will be running a direct train service between Liege and Aachen via a hub in Eijsden and will launch a simplified ticketing system for both bus and rail. Services will also be integrated with existing IC bus routes and Arriva will start new cross-border bus services to Hamont in Belgium. The company also confirmed to CBW that it will open a new regional head office in Heerlen.

David Martin, Chief Executive of Arriva said: “We are already a major transport operator in the Netherlands so we are naturally delighted to be expanding our operations further in the south of the country.

“Our bid for the Limburg concession was based around innovation, new ticketing systems and new connections across the region and into Germany and Belgium. We look forward to starting in December next year.”

The Limburg concession award comes only six months after Arriva Netherlands began to operate an eight-year and a 10-year bus contract in the Brabant region which borders Limburg.

Arriva already operates 1,200 buses and 101 trains in the Netherlands, where it also has 5,000 employees. Across Europe, Arriva has a total of 55,000 employees.