By Richard Johnstone | 26 March 2013
The government today restarted the national rail franchise programme with a call for bids to take over the East Coast mainline, currently in public hands.
Transport Secretary Patrick McLoughlin stopped the franchise bids last October after discovering ‘unacceptable mistakes’ made by the Department for Transport in the decision to award the flagship West Coast line to First Group. This led to the deal being scrapped, and a review of franchising being undertaken by Eurostar chair Richard Brown.
Brown concluded that major reform was not required but Whitehall needed to strengthen its capability to decide on contracts, and plan the process better.
Announcing the re-starting of bidding today, McLoughlin also revealed that 12 of the 16 franchises across the UK for which the DfT is responsible would be given extensions to ensure bids are spread across a new schedule to 2021.
As recommended by Brown, there will now be no more than four tenders in a year. The two principal intercity franchises, West Coast and East Coast, will also be staggered to ensure they are not let at the same point in the economic cycle.
The first to be put up is the East Coast line, which will be reprivatised. It was taken over by the government-owned Directly Operated Railways in November 2009 after previous operator National Express gave up the franchise.
Launching the competition for East Coast today, McLoughlin said a new franchisee should be in place by February 2015.
Today’s plan will provide long-term certainty to the market while also supporting the department’s rail investment programme, he said, and was ‘a major step in delivering tangible improvements to services’.
He added: ‘Franchising has been a force for good in the story of Britain’s railways, transforming an industry that was in decline into one that today carries record numbers of passengers.’
As franchises come up for renewal, ministers propose using both extensions within existing contracts and in the direct award of new deals to realign the programme with today’s timetable.
McLoughlin said the government’s preference was to negotiate direct awards with current operators, but added that Directly Operated Railways could take over if agreements could not be reached.
The longest extension proposed is for the Southeastern franchise, which is now expected to be run by current operator Govia until June 2018, more than four years beyond the planned end date of April 2014.
