After 17 years of running the DLR Serco will hand it over to a venture between Keolis and Amey. However, Serco was not the only company to endure disappointment at the hands of TfL this morning, Stagecoach group also failed in its bid to run the franchise.
Commenting on the announcement, David Stretch, managing director of Serco's Transport business, said:
We are obviously disappointed that we have not been selected to continue to manage and operate the DLR.
We remain excited by the opportunities we see to transform services for passengers in the transport market, as illustrated by the recent award of the 15-year contract to run the Caledonian Sleepers service for Transport Scotland.
The announcement comes hot on the heels of the company's revelation that it would have to write down the value of several large loss-making contracts, which could hamper its full-year results.
The FTSE 250 company has struggled to restore its reputation after allegations of fraud on a prisoner tagging contract, which resulted in a temporary ban on winning new government work.
The firm issued a profit warning in April and launched a £160m share placing in May to avoid defaulting on debts.