News from BWCS

UK Rail Franchise System to be Scrapped - Report

Mon 17 Feb 2020

The UK is on track to radically overhaul the nation’s rail operations by doing away with the current system of franchising. At the same time, according to reports in The Sunday Telegraph, Boris Johnson’s administration plans to place a limit on profits that can be made by private train operators.

Passenger train services in the UK are currently divided into regional franchises run by private train operating companies under seven to eight-year contracts. Most of these are awarded by the Department for Transport (with the exception of Merseyrail and ScotRail). There are currently some 26 franchises.

However, recent high-profile cases of franchise owners struggling to meet their commitments has led to criticism. In addition some commentators have long argued that long-term investment in each franchise region, including in boosting on-train WiFi services, has been stymied by a “short-term” mentality.

A report penned by Keith Williams, former CEO of British Airways, is due to be released this Spring, following his review of the UK rail system last year. It is now reported in the Sunday Telegraph that Williams will recommend replacing the franchising model with a new system of set fees, payable to the government. The overhaul is expected to be managed by a new public organisation, which will be in charge of awarding contracts and monitoring performance.

Last month, UK transport group Stagecoach accused the government of accepting “unbelievable” bids in its procurement of rail franchises. Stagecoach is suing the government after being disqualified from bidding for three rail franchises last spring, when it refused to take on what it called an “unknowable risk” in pensions liabilities. It was joined by Virgin and SNCF, which were partners with Stagecoach as part of a joint venture for the Intercity West Coast franchise.

During the court case lawyers for Stagecoach described the franchise system as being “in crisis”. The legal team also accused the government of encouraging “over-optimistic bids which should not have been accepted”.

The Rail Delivery Group (RDG), which represents the country’s train companies and Network Rail, has warned against implementing a “one-size-fits-all” system in the coming reforms. RDG director of public policy John Thomas said: “Rail companies want bold reform and we have proposed replacing the current franchising system with different types of contracts that better deliver for passengers, all overseen by an independent body and underpinned by a reformed fares system.”

A Department for Transport spokesperson confirmed that the review’s findings will be released soon. “These reforms will put passengers first, end the complicated franchising model and simplify fares for create a simpler, more effective system,” they said.

The roll out of track-side networks, on-train WiFi services, the growing market for passenger WiFi and on-board entertainment will be the main subjects of BWCS’s WiFi on Trains Conference later this year. For information on speaking and sponsorship opportunities at the 2020 event, please contact .

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