THE West Coast Main Line which links Liverpool with London will be the first rail franchise in the country to be awarded for a new longer period.
Companies will compete for a new franchise running for 14 years until 2026, once Virgin Rail’s current deal runs out in 2012.
Transport secretary Philip Hammond last night announced plans for rail industry reform – including longer franchises and a driving down in costs.
His announcement followed the publication of a Whitehall-commissioned interim report which showed the railways were costing too much.
Report author Sir Roy McNulty said greater efficiency would realise savings of £600m to £1bn a year by 2018/19 without cutting services or quality.
With Sir Roy’s final report due in April, 2011, Mr Hammond said he was setting up, and chairing, a “high-level group” to look at ways of driving down costs and to consider rail reform.
Mr Hammond said that in 2012 he planned to award a 14-year franchise for the West Coast Main Line and a 15- year franchise for the East Coast.
Mr Hammond also said the TransPennine Express franchise could either be extended by up to five years from 2012 or possibly retendered for at least 15 years, possibly in 2013, alongside the Northern franchise.
Mr Hammond said: “Incentives on the railway have become blurred and interests misaligned, to the detriment of efficiency, value for money and passenger satisfaction. At present, Network Rail (NR) answers to its regulator, not to its customers, the train operators. Meanwhile, train operators have no interest in NR’s costs, since any increases or decreases are passed straight through to the Government.
“This situation cannot be allowed to continue. All the players in the industry need to be pulling in the same direction in the interests of passengers and taxpayers.”
Office of Rail Regulation chief executive Bill Emery said Sir Roy’s interim report “indicates there is scope to significantly reduce costs across the entire rail industry”. Anthony Smith, chief executive of rail customer watchdog Passenger Focus, said: “Passengers will welcome pressure being put on the rail industry to reduce its costs and achieve maximum value for money from its business. Passengers mustn’t be expected to cover the cost of poor and inefficient planning, working practices and project management.”
Virgin Rail, who have operated the West Coast franchise since 1997, confirmed it intends to bid again.
Chief executive Tony Collins said: “Longer franchises lead to more investment, innovation and better services for customers. Virgin Trains has doubled the number of customers in the past six years – to 28m – and has been the fastest growing franchise.”
Bob Crow, general secretary of the RMT transport union, said the report was a “massive missed opportunity”.
He said: “It points out that rail services are fragmented, but fails to even look at the blame for that fragmentation, which lies fairly and squarely at the door of privatisation.”
