One of Richard Brown's key points in his report on the UK rail franchising market was that the franchising programme should be restarted soon and, specifically, he recommended that the franchising programme should be announced by the end of April.It is unclear whether the DfT will follow this recommendation thus allowing the industry to organise and mobilise its resources to deal with potentially the greatest level of franchising activity since privatisation of the UK rail network. There has been some progress though. At the time the competition for the West Coast franchise collapsed three other competitions which were on-going at the time were "paused". Transport Secretary Patrick McLoughlin has now outlined how the paused Great Western, Essex Thameside and Thameslink, Southern and Great Northern franchise competitions will be dealt with.
The decisions taken illustrate the caution with which DfT is proceeding:
- the competition for Essex Thameside, one of the smaller franchises and relatively self contained, will be resumed. It is anticipated that the ITT will be issued to existing bidders over the summer. Contrary to Mr Brown's general recommendation of seven to ten year terms with the option to extend for a further three to five years if certain criteria are met, the revised invitation to tender will be for a 15 year franchise, a nod towards Government's stated policy of longer franchises. In the meantime, the incumbent operator (National Express) is in negotiations with DfT to run the service under an interim contract of up to two years
- the Great Western franchise competition has been terminated. The incumbent operator (FirstGroup) will continue to run services until October and is also in negotiations for an interim contract. The DfT has said that longer term proposals will be made in the spring
- the Thameslink, Southern and Great Northern franchise competition will be resumed but on a different basis from that previously proposed. DfT's words have been carefully chosen with it saying that it ".. is working towards awarding a seven-year contract". The current franchise has been extended until September and once again negotiations are taking place for the incumbent (FirstGroup) to operate on an interim basis for up to two years
What has surprised some within the industry is that bidders on the terminated franchise competition for Great Western will not have their costs reimbursed (in contrast to the bidders for the West Coast franchise). This has caused some howls of complaint but it remains to be seen whether any of the bidders will challenge the legal basis of this decision.
Patrick McLoughlin commented, "These plans mark an important step on the way to restarting the franchising programme, and while I am determined this should happen as quickly as possible we do need time to get this right".
Behind the scenes, Directly Operated Railways, the state owned operator of last resort, will also be making preparations to take over any of the above services in the event that negotiations with the incumbent operators fail. This announcement deals (in part) with the three paused franchises but a lot remains to be done by Government to deliver a franchising programme which the DfT, the operators and the remainder of the supply chain can deliver.
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