Delays as rail franchising resumes
The Government has signalled the restart of the rail franchise process - with no cancellations but many delays.
The process was derailed over the West Coast franchise fiasco when the awarded contract had to be scrapped due to Department for Transport (DfT) errors.
Virgin Trains had lost out to rival transport company FirstGroup for a new West Coast franchise. But, following the abandonment, Virgin and the DfT reached a deal to run the franchise until November 2014.
However, under a new franchise timetable announced by Transport Secretary Patrick McLoughlin, a new West Coast franchise will not start until April 2017, with Virgin negotiating with the DfT over continuing until then. There are also delays to the start-up dates of a number of other franchises. South Eastern, for example, has been put back from April 2014 to June 2018.
Mr McLoughlin also announced he is opening the bidding to private companies for a new franchise for the East Coast Main Line. This key London-to-Scotland route has been run under the control of the DfT since November 2009 after transport company National Express pulled out. Mr McLoughlin said the new franchise was expected to begin in February 2015.
The West Coast debacle led to two independent reviews - one on the West Coast fiasco and the other on the whole franchise process. Tuesday's announcement is the direct result of the reviews. The new franchise timetable shows that, for example, the Great Western franchise, run by FirstGroup and due to end in October this year, will not start until July 2016, while the Northern franchise, due to end in April 2014, will not begin until February 2016. As in the case of Virgin, current operators will negotiate with the DfT about carrying on during their franchise "overtime".
Mr McLoughlin said: "This programme is a major step in delivering tangible improvements to services, providing long-term certainty to the market and supporting our huge programme of rail investment. Above all, in future franchise competitions we are placing passengers in the driving seat by ensuring that their views and satisfaction levels are taken into account when deciding which companies run our railway services."
Rail unions reacted with dismay to the East Coast news, pointing out that the private sector had twice given up the franchise, with GNER pulling out some years ago. RMT general secretary Bob Crow said: "The proposed re-privatisation of the East Coast, after the public sector rescued the service following two private failures, proves conclusively that the political class have learnt absolutely nothing when it comes to our railways. This is a politically-inspired wrecking move designed to flog off this publicly-owned intercity route before the next election regardless of the consequences."
Richard Brown, who headed the independent inquiry into franchises and who is chairman of the newly formed Franchise Advisory Panel, said: "I am pleased to see that Government has engaged with my recommendations. It is clear to me that this announcement represents an opportunity for Government to seek competitive and innovative proposals from the existing train operating companies and potential new market entrants to demonstrate how they will continue to improve services for passengers. The clarity around the franchise programme will also allow fresh energy to be brought to the urgent task of developing closer partnerships with Network Rail to drive out costs from the industry and provide a better deal for passengers and taxpayers."
Sir David Higgins, chief executive of Network Rail, said: "Our goal is to work with the rest of the industry to provide a safer and more efficient railway which addresses the underlying issues of capacity and performance. The clarity provided in today's statement is welcome in helping us achieve that." A DfT spokesman said: "A key recommendation of the independent Brown Review into rail franchising was that the Government should run no more than three to four competitions a year to avoid saturating the market. This ensures that the department and the market are sufficiently resourced to deliver the best value for money for both passengers and taxpayers."