Project Reach

Description

Following the completion of a competitive procedure, Network Rail ("NR") intends to appoint the Digital Reach Partners consortium to design, deploy, support and fund new public communications networks and supporting infrastructure on the railway in return for the right to use and commercially exploit the new networks and infrastructure under a long-term concession. The concession may also involve using, upgrading or increasing NR's existing telecoms infrastructure assets. The consortium comprises Digital Reach Partners Limited, a subsidiary of Neos Networks Limited, as the fibre partner ("Fibre Partner"), and Freshwave Facilities Limited as the connectivity partner ("Connectivity Partner") (together the "Concessionaire Partners"). NR will now observe a standstill period of at least 10 calendar days from the date of this notice. Following expiry of the standstill period, NR and the Concessionaire Partners will enter into a concession agreement and other concession documents Lot 1: PROJECT REACH BACKGROUND TO NETWORK RAIL TELECOMS NR owns, operates and develops most of Great Britain's railway infrastructure, which includes over 16,000 km of fibre networks and c. 2,500 wireless masts with co-location potential alongside the rail corridor. These telecoms infrastructure assets are a critical enabler for NR to run a safe and efficient railway service to meet the needs of passengers and freight users. They support the delivery of secure, efficient and effective services to passengers and freight users by underpinning safety critical operational services, enabling future train control systems and delivering improved passenger experience and safety via information and security systems. BACKGROUND TO PROJECT REACH Project Reach is designed to advance wider government policy goals of improving public electronic communications connectivity; futureproof NR's telecoms infrastructure for its own rail requirements; and to enable the provision of the next generation of railway technology to significantly improve safety, reliability and passenger connectivity (together "Reach Outcomes"). PROCESS The award follows a tender process that was exempt from the UK statutory procurement regime (see Section VI.3 for further information). The original call for competition was advertised on Find a Tender Service on 26 April 2021 (Contract Notice Ref: 2021/S 000-008949). SCOPE The main features of the concession are as follows: The Fibre Partner will be granted (subject to certain exclusions) the following: • the exclusive right to deploy a new fibre optic network along the rail corridor on NR's controlled estate ("New Reach Fibre") in addition to other NR fibre networks on NR's estate ("Other NR Fibre"); the receipt of dark fibre 'indefeasible rights of use' ("IRU") over allocated capacity on New Reach Fibre; • the option to receive additional IRU over capacity from Other NR Fibre, with certain IRUs being granted from the outset; • the exclusive right to commercialise the IRUs received on New Reach Fibre and Other NR Fibre by selling electronic communication services to the public. The Connectivity Partner will be granted (subject to certain exclusions) the following: • the exclusive right to deploy mobile connectivity solutions (within certain railway stations and railway tunnels and/or cuttings across railway routes) and commercialise such mobile connectivity solutions for public use; and • the option to provide white label Wi-Fi service for public use within stations. NR will receive a revenue share and retain an allocation of New Reach Fibre for various purposes including rail use and supporting the Concessionaire Partners' provision and exploitation of the mobile connectivity solutions. NR will also receive electronic communication services to NR's corporate and operational sites including circuits, fibre and additional connection services. The estimated value of revenue from the Concessionaire Partners' use and commercial exploitation of the new networks is £740m for the Concessionaire Partners. In addition, NR will provide a capital contribution to support initial deployment of fibre (£100m) and pay for the electronic communication services with an estimated value of £85m-95m. The initial term of the concession is 37 years, with an option to renew for a further 30 years and an extension of the initial term by up to 10 years if the renewal option is not exercised.