THE DISASTROUS West Coast rail franchise contest proves the Department for Transport lacks “commercial nous” and it should consider outsourcing such tasks, MPs said today.
In a wide-ranging review of the rail industry, the transport select committee also warned the DfT against hammering passengers with more price hikes, and claimed the sector’s obscure public funding structure risks “unjustified profits”.
MPs argued that the collapse of the West Coast contest in October, when First was stripped of its contract and Virgin won a short-term extension, highlighted “serious doubts about the DfT’s capability to manage major procurements”.
They suggested an arms-length body or new agency within the DfT to let and manage franchises.
An independent review of rail contracts is expected next week.
Fares were also a source of frustration for the committee, which urged the government to rule out “super-peak” tickets intended to curb demand during rush hours.
“[T]o drive efficiency savings across the sector the government and the regulator must shine a light on complacent management, waste and profiteering by ensuring greater transparency in the finances of the rail industry,” said committee chair Louise Ellman.
Train firms hit back, arguing that profit margins are “relatively small” for franchise operators.