FirstGroup, the Aberdeen-headquartered transport operator, has been named the preferred bidder for the contract to manage the London Overground suburban rail network. The substantial agreement, valued at approximately £3 billion, will see FirstGroup’s subsidiary, First Rail London Limited, commence operations on 3 May 2026. The initial contract spans eight years, with Transport for London (TfL) holding an option to extend it for an additional two years.
The London Overground, a vital artery across the capital, currently serves around four million passengers weekly, spanning six routes, 100 miles of track, and 113 stations across all nine fare zones. Under the terms of the concession, TfL will retain all revenue risk and dictate service levels, a model distinct from traditional rail franchises.
This new contract represents a notable strategic development for FirstGroup, further diversifying its extensive UK public transport portfolio. The company already holds significant positions in bus operations across the UK and runs several major rail services, including Avanti West Coast and Great Western Railway, alongside open-access routes like Hull Trains and Lumo. FirstGroup is an established partner for TfL, already operating bus services, trams, and the London Cable Car. To underscore its commitment, FirstGroup will provide a £30 million Performance Bond and an £80 million Parent Company Guarantee.
Graham Sutherland, FirstGroup chief executive officer, commented: “The London Overground has greatly improved connectivity in London, with around four million passengers now using the service every week. We are delighted to have been named as the preferred operator for the service from next May and look forward to welcoming employees who will be joining the Group and to play our part in the success of this vital rail network.”
“We are an experienced and trusted partner in public transport and look forward to building on our relationship with TfL, for whom we already operate buses, trams and the London Cable Car. Our successful bid for this contract represents another significant step in our strategy to diversify and grow our portfolio, and we will continue to evaluate further growth opportunities like this.”
The current London Overground operator, Arriva Rail London, a subsidiary of Deutsche Bahn, has held the concession since November 2016, with its extended term concluding on 3 May 2026. The decision comes amidst ongoing reforms in the wider UK rail sector, with the government moving towards establishing Great British Railways and public ownership as a default for national passenger rail operations.
David Thomas, head of concession for London Overground, welcomed the announcement, stating: “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. We’re delighted to welcome First Rail London Limited as our preferred new partner and look long forward to working together to deliver a range of benefits for everyone who uses the network.”
