TRANSPORT for London (TfL) has selected FirstGroup subsidiary First Rail London (FRLL) as preferred bidder for an eight-year contract to operate the London Overground network of commuter services running on Network Rail infrastructure.
The contract is due to be signed following the end of the customary standstill period on December 18. FRLL will succeed Arriva Rail London as operator on May 3 2026 and the contract includes a two-year extension option.
Under the terms of the contract, TfL retains all passenger revenue risk, and some cost risk for electricity pricing, regulatory charges and inflation protection up to an agreed amount. The contract includes a profit margin on concession payments, and the service quality regime makes provision for additional payments to FRLL if performance is above-target.
FirstGroup says that the contract has an estimated value of £3bn. The company is required to provide a £30m performance bond and a parent company guarantee of £80m.
Every week four million passengers use the London Overground network, which comprises six lines totalling 160km and serving 113 stations. Under the new concession, FRLL will introduce additional peak services on the orbital Mildmay Line, which runs from Stratford to Richmond and Clapham Junction, increasing capacity through new shuttle services between Clapham Junction and Shepherd’s Bush.
On the Windrush Line from Highbury & Islington to New Cross, West Croydon, Crystal Palace and Clapham Junction, services will be increased to 18 trains each hour on the core section from Dalston Junction to Surrey Quays.
Safety improvements will include upgrading station help points and CCTV. TfL says that FRLL will work closely with Alstom, which maintains the London Overground fleet, and with Network Rail to maintain customer satisfaction. Targeted infrastructure upgrades will be undertaken on the Mildmay Line to increase performance.
TfL says that the package of improvements agreed under the new concession will help meet growing demand and ensure that London Overground continues to provide a safe, reliable, and customer-focused service.
“London Overground is one of the most popular parts of our transport network, and this new concession puts customers at its heart, helping make the service even better,” says David Thomas, head of concession for London Overground.
