Welcome DECEMBER 2012 ISSUE 188 £3.95 THE BUSINESS MAGAZINE FOR RAIL www.railpro.co.uk Rail Professional opinion Short and sweet


Greater Anglia MD Ruud Haket on the challenges of a 29 month franchise


FROM FIELD TO FORK


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Has franchising had its day?


wrong, leaving a Toc being run outside of the usual franchising system – as you will all know. But there has not been a consistent approach to dealing with the issue when it arises. The first time a franchise was revoked was when Connex was deemed not to have met its contractual conditions for South Eastern in 2003. The SRA took it back under state control for what was meant to be 18 months, with the franchise eventually being re-let to Govia two and a half years later. In 2006 GNER had to pull out of the East


T


Coast franchise, being unable to meet its premium payments after a series of misfortunes meant that its revenues had not met expected levels. This time the government – still Labour, but minus the disbanded SRA – kept GNER on under a management contract until the franchise could be re-let, this time to National Express. Before long National Express, too, realised it had overbid and had to walk away from the East Coast franchise. But the then transport secretary Andrew Adonis feared that this could be the first of many early exits as the recession began to bite and he did not want to concede any ground to National Express, for fear of setting a precedent. National Express was quickly removed and a nationalised owning company was set up – Directly Operated Railways. Under the chairmanship of Elaine Holt, DOR took on the East Coast. As with South Eastern years earlier, it was meant to be a short tenure, before the franchise could be re-let to the private sector. But three years later, it’s still there. Unwilling to have two of Britain’s biggest


franchises run by the state, the coalition government has not utilised DOR to take over


he current


situation with the West Coast is not the first time a franchise has gone


the West Coast while the ill-fated franchise competition is re-run. So there are broadly two approaches when


a franchise ends prematurely, either keep on the outgoing operator under a management contract or parachute in a new management team handpicked by the government. One thing is clear – whichever approach is taken, it seems to work almost too well. GNER’s management contract was too shortlived to gauge its success, but the DOR and SRA state-run options, worked so well they both outlasted their expected lifetime by quite some margin. And yet both Labour and the Conservative-led coalition are reluctant to keep any franchise in the public sector long-term. Germany’s state railway runs quite a chunk


of our railway (Arriva Trains Wales, Chiltern, Grand Central and London Overground, as a joint venture). The Netherlands state railway runs Merseyrail, Northern (as a joint venture) and Greater Anglia. But no state-owned British entity is allowed to run trains as anything other than an interim measure. And yet the East Coast franchise has collapsed twice when run by the private sector. If Virgin makes a good go of running the West


Coast on a management contract, this approach could be looked at as a possible future model too. Without having to predict future demand with the sort of detail required of a franchise bid, a management contract may turn out to be a much more suitable arrangement for our long distance railways. Management contracts have already been successful on Merseyrail and London Overground. Time for a re-think of


exactly what the role of the private sector should really be in running our railways? I think so.


Speciality Greases- making a point of being on time.


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your global specialist DECEMBER 2012 PAGE 3


By Katie Silvester


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