Latest Rail News

06.07.16

Changes to framework ‘needed to meet franchising pressures’

Pressures on UK rail franchising are likely to increase unless the franchising framework is reformed, the ORR has said.

In its written evidence to the Transport Select Committee’s inquiry on rail franchising, the ORR said that franchising applications are covering increasingly complex areas.

For example, the East Coast and West Coast Main Line franchises include procurement of new rolling stock and proposals to operate new services on busier parts of the railway network.

The new South Western franchise also requires bidders to commit to procuring new rolling stock and reducing journey times.

The ORR said that opportunities for open access operators are likely to increase due to programmes of change currently being implemented on the rail network.

Investment in new rolling stock and electrification is likely to release rolling stock that is currently in use back to the market.

Improvements to signalling technology will increase capability of the network, and HS2 will add a significant amount of new capacity, including potentially on the West Coast Main Line.

It said that increased opportunities for open access operators could provide better choice for passengers, but expose taxpayers to risk, and that the charging framework should be reformed to allow open access operators to deliver rail services without creating a financial risk for franchising authorities.

For example, open access operators could be required to pay a levy to contribute to the funding of unprofitable but socially desirable services.

The Rail Delivery Group has already warned the inquiry that the increasing cost and complexity of franchise bidding is deterring new applicants.

Members of the House of Lords have warned that the proposals for increased open access franchising could threaten existing commitments to improve franchises, whilst Campaign for Better Transport has said that it is unconvinced that they will benefit passengers and taxpayers.

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