BR managers team up to bid for 25 new rail passenger franchises: MacGregor says people will be able to travel with different operators on one ticket

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The Independent Online
FIFTY COMPANIES and 30 would-be BR management buyout teams have expressed interest in the new 25 rail-passenger franchises, according to the Secretary of State for Transport.

Announcing details of the franchises, John MacGregor said that the Government was committed to maintaining through-ticketing, enabling passengers to travel on trains operated by different franchisees using one ticket.

The Government's franchise director will also have the power to limit fare increases in cases where the franchise covers a largely captive rail market - such as commuter services.

BR will be instructed to have a 'shadow franchise' structure in place by 1 April next year so that records of operational and financial performances are available to potential franchisees in advance.

The length of individual franchises will vary from area to area but the minimum period is expected to be seven years.

Since each franchise will, by definition, be awarded to only one operator, competition on the railways will be non-existent at first.

Open access - the system whereby rival operators will be allowed to run competing services on the same line - will not take off until well into the next century.

The 25 franchise areas correspond to BR's existing network of profit centres. In the case of lines or areas which are profitable, the franchise will go to the operator who bids the highest price.

Loss-making lines - all of Regional Railways and large parts of Network SouthEast - will be awarded to the operator that bids for the lowest amount of government subsidy.

Critics of rail privatisation have claimed that the structure chosen by the Government may actually drive up subsidy levels since BR will no longer be able to cross-subsidise loss-making lines from profitable parts of the network.

The Government disputes this, arguing that private-sector operation will mean more efficient, lower cost rail services.

Announcing details of the new franchise map yesterday, Mr MacGregor said: 'Our proposals for the franchising of passenger rail services are designed to bring new benefits to passengers and provide a better way of delivering their services.'

The rail passengers' watchdog, the Central Transport Consultative Committee, welcomed the announcement saying: 'This falls very much along the geographic lines we have been advocating, so we are fairly happy.'

The first seven services to be franchised off, announced in February, will consist of: InterCity's East Coast and Great Western main lines and the Gatwick Express; Network SouthEast's Isle of Wight line; the South-Western division and the London- Tilbury-Southend line; and ScotRail.

Leading article, page 17

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