Many problems with current rail contracts will be eliminated with the disappearance of the franchise system included in the Williams-Shapps plan released last May. In the future, instead of playing with contracts, everything will be managed by a new government agency, Great British Railways, which simply tells operators how many trains to run and pays them operating costs. There will no longer be an excuse to transfer financial risks from the public sector to the private sector, as if the government could really allow a network to simply shut down, and instead of sharing profits or losses, operators will simply charge a fee for providing a service. National Express won the most franchises, with five (Gatwick Express, Midland Mainline, North London, Central Trains and ScotRail). Prism Rail followed with four (LTS, Wales & West, Valley Lines and WAGN). Connex, Virgin Rail Group and MTL each captured two, with the franchises they won being closely related (South Central and South Eastern for Connex, CrossCountry and West Coast for Virgin and Mersey Electrics, and North East for MTL). Stagecoach also won two, although the second was the tiny Island Line, which was eventually merged with their main victory, South West Trains. Great Western Holdings also won two, on both sides of the country – Great Western and North Western; FirstGroup, which had won a single franchise in Great Eastern, was a minority partner of GWH. The acquisition of GWH`s other partners in March 1998 brought their total to three. [30] The Department of Transportation (DfT) is responsible for the planning and procurement of new and replacement rail franchise services on the national rail network. DfT is the franchise authority for the rail network. In 2012, the franchise system experienced problems; The Department of Transportation awarded the InterCity West Coast franchise to FirstGroup,[67] but in October the Minister of Transport reversed this decision after revealing significant technical deficiencies in the way the franchise process was conducted.

Virgin Trains has been awarded a fixed-term management contract to operate the franchise until a new competition can take place. [68] [69] Originally introduced by the Railways Act 1993, railway franchising came into force in 1996 and effectively replaced the state-owned British Rail. As part of the rail franchising system, private companies offer multi-year contracts that allow them to operate on specific routes. In January 2015, as part of its legal obligation to promote competition, the Autorité de la concurrence et des marchés (AMC) launched a policy review to determine whether there are opportunities to improve the current system outside the existing areas of competition, namely the tendering process and open access operators. In July 2015, four possible areas for reform were identified: a greater role for open access operators, two successful bidders for each franchise, more overlapping franchises and several operators with licenses on each route. [2] The regulator (now called the Office of Rail & Road) evaluated the CMA`s options, which led to a final report in March 2016. [44] "The government must now abandon its obsession with the free market and stop any attempt to revive the corpse of railway privatization," RMT general secretary Mick Cash said in response to the announcement. The main costs incurred by franchisees are track access charges (paid to Network Rail); other significant costs come from staff, rental stations (from NR) and roller equipment (from ROSCO). Franchisees also pay for light storage, with heavy work being done under the ROSCO lease. The main source of revenue is tariffs, supplemented by the franchise subsidy in case of shortage. In addition, franchisees are allowed to sublet business units directly to leased stations. [7] Under the original 1993 Legislation, the Franchise Manager established the minimum service levels for a franchise in a Passenger Service Requirement (PSR), which was the BR`s current schedule for first sales, and put it in competition.

Successful bidders were decided on the basis of pure cost – those who offered to pay the highest premium or receive the lowest subsidy would manage the deductible. Once signed, franchise agreements could only be terminated under certain conditions, i.e. non-compliant with the PSR, although fines were available as an intermediate step. [7] A small number of light rail transit systems are not concessional, but are awarded as concessions. Concessionaires receive a fee for the operation of the service, which is usually strictly determined by the contracting authority. You don`t take any business risks, although the contract usually provides penalties and rewards for large fluctuations in performance. "Covid-19 has proven that private railway companies are a waste of time and money and have no place in a sustainable railway. It is time to eliminate the middleman, and the priority now must be to protect the services and the employees who run them, not private profits. An intercity and regional suburban franchise that combines Thameslink and Great Northern services with Southern services. Prior to privatisation, British rail passenger transport was organised into three units: a suburban and regional franchise that operates an intensive network of suburban and long-distance services between London Waterloo, south-west London and cities in the south-west of England, including island line services on the Isle of Wight. Publication of West Coast Partnership`s franchise prospectus. Prior to the formal call for tenders for a particular franchise, the DfT publishes a Prior Information Notice (PIN) setting out the basic details and opens a consultation with the competent transport authorities, the decentralised administrations and the Transport Focus Watchdog.

At the end of this process, a formal call for tenders containing the detailed terms of the proposed franchise agreement will be sent to the three to five potential bidders identified as prequalified. ITTs may contain a number of variations that are taken into account by the potential bidder, who may also submit amendments himself. The franchise is awarded the contract for the offer considered the most profitable and offering the best value for money and reliability. Where appropriate, the performance of tenderers in the past shall also be taken into account. [6] Described by government officials as "the biggest change to the railways in a quarter of a century," the decision aims to bring the country`s fragmented network together months after the government effectively treated it as a national company in the wake of the Covid-19 pandemic. The original management agreements came into effect on July 22, 2002 and provided that the West Coast franchise would be supported by the SRA until March 2003, and if no agreement was reached on the new terms of the franchise by then, the management agreement would continue for a fee of 2% of sales. Similarly, cross-country would be supported until March 2004, then by a 1% royalty if it is not renegotiated, but with the possibility for the ARM to submit it. [63] Dissatisfied with Virgin`s proposal for the remaining 15-year Cross Country franchise, the SRA terminated negotiations on June 6. August 2004,[64] and the temporary arrangements continued until the franchise was re-leased in a revised form announced in October 2005. [65] Although Virgin was shortlisted as a bidder for this revised franchise, it lost to Arriva, which took over the role of the new franchisee effective November 11, 2007. [66] However, the DfT does not appear to be buying it. In its statement, it said it considered the underpayment to be "a significant breach of the duty of good faith in the franchise agreement": you hardly need the Enigma machine to decipher this.

For good reason, the government said it would consider "other options for law enforcement," including fines. It is not entirely clear whether the government is really as angry as it claims, or whether it is intended to warn others. The Labour government, elected in 1997, decided not to reverse the privatisation process, although it presented a number of reform proposals, including the creation of a new Strategic Railway Authority (SRA) whose functions would assume the responsibilities of the Director of Franchising, as well as certain tasks previously carried out by the railway regulator and the Railway Directorate of the Ministry of Transport. As this would be legislation, the SRA was created in the meantime in June 1999 in a "ghost form". Part of their job was to ensure that the railways were operated as "a coherent network and not just a set of different concessions." Its objectives were closely in line with the government`s broader targets set in July 2000 as the Ten-Year Transportation Plan 2010. [32] In December 2006, the TOC of the Great North Eastern Railway, which operates the InterCity East Coast franchise, was deprived of its contract six years before the contract expired due to financial difficulties with its parent company Sea Containers. [6] It was finally tendered to the National Express East Coast TOC in August 2007, after GNER was allowed to operate it in the meantime on the basis of a management contract. NXEC again ran into trouble due to the recession and was forced to abandon the franchise after the government refused to renegotiate its terms. [6] In November 2009, the franchise was transferred to a newly created And state-owned East Coast TOC before finally being subject to a new TOC, Virgin Trains East Coast, in March 2015. [70] On the 21st.

September has announced its intention to end the UK rail franchise system, 24 years after its introduction. .