Press Releases

HISTORIC PRESS RELEASE : New Franchising Plan To Bring Forward Benefits For Passengers [December 2001]

The press release issued by the Strategic Rail Authority on 19 December 2001.

The Strategic Rail Authority (SRA) today gave the green light to re-starting the refranchising programme for passenger rail services, and at the same time invited expressions of interest for three new franchises.

SRA Chairman Richard Bowker said:

“Today’s announcement breaks the logjam and will help to stabilise and restore confidence within the rail industry. This ‘horses for courses’ approach means we can move forward quickly and secure some early benefits for passengers, while also putting in place plans for the medium to long term. The new policy has been extensively discussed with the industry and with Government, and is both practical and deliverable”.

The new programme provides clarity for train operators competing for franchises and is fully aligned with the Government’s new policy issued today. Designed to deliver the Government’s objectives of 50% growth and a reduction in overcrowding, the plans reflect the different needs of each franchise.

The policy provides a balance between short-term extensions and long-term commitments. Details are set out, franchise by franchise, in the Annex to this release. Clear guidance will be given to parties on the core requirements of a franchise, whilst leaving scope for innovation. Wherever franchises are replaced or extended, new contract terms will target provision of better facilities, higher performance incentives for operators and better compensation arrangements for passengers when things go wrong. Further details on the franchising programme will be set out in the SRA’s Strategic Plan, to be published on 14 January 2002.

The length of new franchises will depend, amongst other things, on the investment needs of the franchise and the level of risk to be borne by the franchisee. It is also very important to establish structures which allow good quality operators to take a longer term view of their business and the needs of their customers. Where long-term franchises are appropriate these are likely to be up to 15 years (in line with emerging EU requirements) but, crucially, will be dependent upon delivering operational performance targets. Because this represents a considerable development in franchising policy the SRA will be consulting with passenger committees and key stakeholders on the proposed franchise term. Franchises would end after five or ten years if the conditions were not met.

The SRA is also looking at the longer-term benefits of combining franchises and a simpler structure. In particular, where two or more franchises share access to a London terminal, combination might produce benefits for passengers. It may allow better use to be made of available capacity, and would simplify the timetable planning process and contractual relationships, with the aim of producing a more reliable, cohesive and attractive service for passengers. Over the next two months, the SRA will be consulting train operators, passenger committees, TfL and regional and local authorities on the value of combining franchises in such a way.
As a first step towards simplification, the franchise plan includes the creation of a ‘Greater Anglia’ franchise from 2004, through the grouping of Anglia, Great Eastern, and the “West Anglia” part of WAGN (Liverpool Street – Cambridge/Hertford/Enfield/Chingford) franchises. A separate management unit will be established in Norwich to ensure local accountability and focus on local services in Norfolk and Suffolk. Work will also start next year on drawing up plans for new trains for the Norwich – London service, to be procured once the new franchise is created in 2004.

Details of all the franchises are set out in the Annex below and in the attached list of franchised services. The Annex lists franchises for replacement and those for possible two-year extension, subject to negotiation of satisfactory terms which provide benefits for passengers and value for money for the taxpayer.

Also listed are the franchises moving to expiry, but short-term improvements here may be sought through the Rail Passenger Partnership fund or through contractual agreement with the franchisee.

The SRA is also restarting the new Wales & Borders franchise as a matter of priority, following discussions with the Welsh Assembly Government. Expressions of interest are being invited today. The Authority hopes to announce a preferred bidder by Autumn 2002, and to have a new franchise in place by early 2003.

Expressions of interest are also being invited today in the Northern and Merseyside franchises. Discussions are in hand with the Merseyside PTE and DTLR on the possible future transfer of responsibility for the Merseyside franchise to the PTE.

Interested parties should write to Nick Newton, SRA, 55 Victoria Street, London, SW1H 0EU, by 11 January 2002 (regarding Wales and Borders) and by 15 February 2002 (regarding the Northern and Merseyside franchises).