Valley Rail Partnership No.2 LLP for the manufacture, supply, maintenance and leasing of 36 x 3-car Citylink metro units (the “Metro Units”)

Contracts

• Valley Rail Partnership No.2 LLP for the manufacture, supply, maintenance and leasing of 36 x 3-car Citylink metro units (the “Metro Units”) · Stadler Rail Service UK Limited, Stadler Rail Valencia S.A.U, Stadler Rail Valencia SAU, Valley Rail Partnership No.2 LLP

  Signed

  23 Jan 2019

  Value

  £530,007,000

  Status

  active

  • Change Due to Covid-19 restrictions / related matters, TfWRL replaced KA in February 2021 under s.30 of the Railways Act 1993. TfWRL and its parent TfW are contracting authorities and also utilities in relation to the rail network. Due to Welsh Government's and TfW's decision to retain in the public sector maintenance workers who had transferred from KA to TfWRL under TUPE, changes were negotiated to the maintenance agreements associated with the Metro Units so that the agreements become Technical Support and Spares Supply Agreements (TSSSAs) instead of Train Services Agreements (TSAs), with TfWRL taking over the role of the maintainer of the Metro Units. TfWRL will replace SRS UK as maintainer, with SRS UK taking on a technical support and spares supply role. As a result of the change in maintainer of the Stadler Fleets, some knock-on amendments to the Manufacture and Supply Agreements (MSAs) are also required, to bring them in line with the change in maintenance arrangements. As a consequence of these changes, the leasing arrangements have been extended in order to deal with the impact on the residual value risk for the Owner of the Metro Units of moving to a TSSSA maintenance arrangement, protecting the exclusive rights of the Owner as the owner of the Stadler Fleets. A move from TSAs to TSSSAs exposes the Owner to additional risks, in particular re: its ability to re-lease the Metro Units at the end of the period of the undertaking under s.54 of the Railways Act 1993 provided by Welsh Government, being 31 December 2048. In order to protect the Owner against these additional risks, and to protect the exclusive rights of the Owner as the owner of the Stadler Fleets, the s.54 undertakings are to be extended for a further 10 years, to 2058. Further, as Stadler owns the Intellectual Property in the Metro Units, as the original supplier of the Metro Units, the parties jointly agree that in order to protect the exclusive rights of Stadler, Stadler will provide the revised TSSSA services (and assist TfW in providing the revised maintenance arrangements). It would not be practically possible from an IP ownership perspective nor a technical perspective for anyone other than Stadler to perform the strategic TSSSA service and role. TfW/TfWRL relies on R.72(1)(c) of the Public Contracts Regulations 2015 (PCR) / R.88(1)(c) of the Utilities Contracts Regulations (UCR) 2016 as set out below. Further or in the alternative. TfW/TfWRL relies on R.72(1) (b) of PCR / R.88(1)(b) of UCR on the grounds that it would not be technically possible for another supplier to provide the revised arrangements which have become necessary in respect of the Metro Units without serious inconvenience or duplication of cost. This is given Stadler's technical knowledge and experience with the Metro Units, as the original supplier of the Metro Units, and the fact that the Owner owns and controls the Metro Unit fleet. Further or in the further alternative, TfW/TfWRL relies on R.32(2)(b)(ii) and/or (iii) PCR / R.50(1)(c)(ii) and/or (iii) UCR (competition is absent for technical reasons and/or protection of exclusive rights) because only the Owners of the Metro Units can provide the revised lease arrangements detailed above (as the owner of the Metro Unit fleet), and Stadler's knowledge and experience of the Metro Units and ownership of IP rights in terms of being able to provide the technical support and spares supply required by these TSSSA maintenance arrangements. Given the additional risks to which the Owner is exposed, the conditions set out above play an important role in the feasibility of the move from a TSA to a TSSSA., Need for modification brought about by circumstances which a diligent contracting authority/entity could not foresee: The impact of Covid-19 restrictions made it commercially unviable for KA to continue operating train services and forced TfWRL to step in as operator of last resort. This caused the maintenance employees (who would otherwise have transferred from KA to the Metro Units maintainer, Stadler) to come into public sector employment. Welsh Government and TfW made a decision not to transfer these employees to the private sector. This necessitated the change from TSAs to TSSSAs (as above). The leasing arrangements have been extended in order to deal with the impact on the RV risk for the Owner of moving to a TSSSA maintenance arrangement, so as to protect their exclusive rights and contractual position as the owner of the fleet. Alternatively, TfW/TfWRL rely on the equivalent provisions of R.88(1)(c) of the Utilities Contracts Regulations 2016.

Dispute resolution & review bodies

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