Rail Franchising (Hansard, 6 November 2002)

§ Mr. Darling

The Strategic Rail Authority has announced today a new approach to franchising. Under it the SRA will be much clearer what it expects from each train operating company. Train companies will not just be judged on whether trains run on time but also on the cleanliness of trains and stations, accurate travel information and passenger security.

The nature of the franchising structure put in place at privatisation has contributed to the difficulties in the railway industry—especially poor performance and variable quality of service.

Today, with the Government's support, the SRA has announced a new approach to franchising that puts passengers first. It intends to do so through: tighter specification of services, station standards, train cleanliness and journey quality; and robust incentives and penalties that will influence positively the behaviour of operators. These include: changes to the performance regime; quantified performance indicators for service and station quality, with payment by results; and a new approach to the award and management of franchises. The first franchise awarded under the new basis is expected to start operating in 2004.

The SRA has also announced proposals to make better use of the railway by combining franchises at key London stations—from 3 to 1 at Liverpool Street, from 2 to 1 at Waterloo and from 3 to 2 at Paddington.

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Transitional arrangements are being put in place as it is not practical to award all of the franchises due to expire by 2004 simultaneously. The SRA has therefore made a number of detailed announcements on individual franchises today. These include: an invitation to Connex Transport UK Ltd and First Group/Keolis SA to proceed to detailed negotiations on Heads of Terms for the TransPennine franchise; negotiations with Arriva Trains Northern on an interim franchise to operate services until the Northern Rail franchise commences in 2004: a one-year extension to the current South West Trains franchise to February 2004; and the agreement of principles with Stagecoach Holdings plc for a new South West Trains franchise extending to 2007.

Further adjustments to franchise periods may be necessary to facilitate an orderly transition from the existing franchise regime to the new one. I shall be prepared to use my powers of direction under section 26 of the Railways Act 1993 for this purpose.

This announcement is another step towards delivering a reliable and safe railway and builds on the SRA's consultation on its Capacity Utilisation Strategy launched on 5 September.

Copies of the SRA's Franchising Policy Statement have been placed in the Libraries of the House.