Transport chiefs attack short-term rail contracts

The controversial insistence by the Strategic Rail Authority on short-term train franchises is set to be challenged by regional transport chiefs.

Merseytravel, the first transport organisation to take over the duties of the SRA in its area, believes the authority will be proved wrong over its adherence to the three- to seven-year contracts it awards train operators. In a week's time Serco and the Dutch state-owned Nedrailways will start a 25-year licence to run the rail network in the Merseyside area with a commitment to invest £3.6bn in services.

Initially some 65 per cent of the money will come from the Exchequer, while 35 per cent will be derived from fares. However Neil Scales, chief executive of Merseytravel, hopes to reduce significantly the proportion of capital spending which comes from state subsidies during the life of the franchise.

Mr Scales believes the 25-year licence will bring the kind of advantages not available to the national network: "Long-term planning brings huge benefits to the operator who can invest early to improve the service and win more passengers. It certainly brings benefits to customers who get a far more reliable service, better stations and more staff on duty. I believe this is the way to increase investment and bring improvements to the network.''

Richard Bowker, chairman of the SRA, is concerned that longer franchises leave too much to chance and that the standards of management can deteriorate during a long period of time. But Mr Scales said: "We will ensure that the long-term contract does not result in complacency by monitoring performance constantly. The contract allows us to refranchise the whole operation if the operator does not deliver its promises.''

Mr Scales points out that the 25-year concession to the Serco-Nedrailways partnership will deliver a totally modernised fleet of trains by 2005 and argues that the long-term contract will mean the company will be able to train staff who in turn will be more committed because of longer-term security.

Merseytravel has also insisted that over 25 years fare increases can only match inflation - a clause which will be envied by passengers on the national network.

Central to Merseytravel's strategy are plans to integrate the self-contained rail network with other forms of transport such as ferries and buses. A new £225m tramway is being built in time for Liverpool's stint as European Capital of Culture in 2008. The Mayor of London Ken Livingstone has been pressing for similar powers for the capital, although the SRA has so far rejected the proposals.