Longer deals for rail firms

TRAIN companies are to get longer franchises in return for cutting costs under plans unveiled yesterday by the government.

Ministers plan to offer 15-year-minimum contracts for rail franchises in 2012 and 2013, although some companies will receive short-term franchises in particular circumstances.

Transport secretary Philip Hammond said an interim report from a government-sponsored rail industry review showed Britain’s railway was costing more than it should and needed to be more efficient.
Hammond said operators needed to work more closely with Network Rail on a local basis and would benefit from greater commercial freedom and less government intervention.
He said a franchise would be awarded in 2012 to run the West Coast line, run by Virgin Trains, until a high-speed railway from London to Birmingham opens in 2026.

Other longer-term contracts to be offered in 2012 and 2013 include the East Coast Main Line, Northern Rail and Essex Thameside, run respectively by a government-owned firm, a consortium of Serco and Dutch Railways arm Abellio and by National Express.

The Greater Western franchise, run by FirstGroup, will be tendered in either 2013 or 2016.

The government will seek offers in 2011 for the Greater Anglia rail franchise in east England, run by National Express, until 2013 as an interim move until a review is completed.

“Greater efficiency would realise savings of £600m to £1bn per annum by 2018-19 without cutting services or lowering quality,” Hammond said. A final report is expected in April 2011.