The emphasis is on enhanced capacity in key urban centres such as Manchester and Leeds, where commuter numbers are expected to grow by at least 2.5% annually in the next five years. The language is discreet, but there is reference to low usage on a number of routes, and the suggestion that the resources used on these services may not be cost-effective.
Vehicle quality is a key issue on Northern routes, which rely heavily on two-axle Pacer units that are 30 years old, and which do not comply with design rules beyond 2020 for access by passengers with reduced mobility. It is a requirement within the franchise plan that replacement proposals are made, and that the cost of doing this is identified.
The contracts will carry revenue and cost risk, as this is believed to be a structure that will motivate innovation to improve fare box income, constrain costs, and bring about plans to reduce the amount of ticketless travel resulting from the lack of ticket vending machines at many stations.
New dynamic brings passenger benefit
With the award of the first two re-styled franchise contracts, the Government has been keen to encourage a less adversarial approach. The aim is to consider franchise holders as partners.
It wants to reduce the economic risk to companies in the bid process by placing less emphasis on revenue outputs that are dependent on wider economic indicators, and instead concentrate more on the areas that franchise holders can influence by their own actions.
In Peter Wilkinson’s words: “We are conscious of the fact that in the price on (stock) markets for listed companies, rail doesn’t carry an awful lot of value. We are keen to change that.”
For the TSGN contract, he concluded: “This is a new relationship and we must be prepared to stand by our partners.”
The inference is that the train operating companies will be encouraged to improve the assets that impact on service quality. And where this requires consultation with the DfT, a much greater willingness will be shown to make any necessary contractual adjustments.
