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The birth of a new era The Government has announced plans to bring the rail network under a single national leadership. A new public body, Great British Railways, will own the infrastructure, receive the fare revenue, run and plan the network and set most fares and timetables. Network Rail, the current infrastructure owner, will be absorbed into this new organisation, as will many functions from the Rail Delivery Group and Department for Transport. Franchising will be replaced by Passenger Service Contracts. The report says ‘Great British Railways will simplify the current confusing mass of tickets, standardising mobile and online ticketing, and bringing an end to the need to queue for paper tickets. Affordable ‘turn up and go’ fares and capped season tickets will continue to be protected. New products, such as flexible season tickets aimed at those commuting for two or three days a week, will be introduced to reflect new working and travel patterns. Trains will be better coordinated with other forms of transport, such as buses and bikes.’ Existing access contracts will be honoured, and private operators will continue to have clear legal rights that allow them to respond to their customers as part of a rules-based regime. The full report is available here: Great British Railways: The Williams-Shapps Plan for Rail (web version) (publishing.service.gov.uk) Darren Caplan, Chief Executive of the Railway Industry Association (RIA), called for a ‘long-term approach, in order to
smooth boom and bust and provide more certainty for rail schemes’ with Andrew Haines, Network Rail Chief Executive saying: ‘Today marks the start of an exciting new chapter for our railway, a chapter that puts the passenger first.’ Tim Wood, Transport for the North’s Interim Chief Executive, said: ‘We now desperately need the Government to published the Integrated Rail Plan for the North and Midlands, giving clarity of what projects will be delivered and when; and confidence that major investment is coming.’ Phil Bulman, Partner and transport sector specialist at management consultancy, Vendigital, said: ‘After a long period of being left in the dark about the industry’s future, UK rail must now seize this opportunity to fix its broken model and get back on route to recovery. The sector urgently needs to simplify, consolidate and automate to overcome the challenges it’s currently facing. Bringing track and trains together under new supervisory body, ‘Great British Railways’, has great potential benefits, but it will need to be decisive, remove bureaucracy and drive the change that is needed to make the industry sustainable.’ Andrew Went, UKIMEA Rail leader at ARUP said: ‘Great British Railways will take on new responsibilities to accelerate innovation, which is likely to result in some streamlining of the diverse range of organisations currently operating in the research, development and innovation space. These responsibilities include
facilitating and promoting rail freight and removing barriers to data sharing. The body will also play a significant role in enhancing sustainability, including bringing forward electrification proposals.’ Matthew Farrow, Director of policy at the Association for Consultancy and Engineering (ACE), said: ‘The elephant in the room is the finances of the network – more than £12 billion has been provided in emergency investment by the Government since the start of the pandemic – and nurturing the emergence of a economically sustainable system which is also attractive to passengers looking for more flexibility than before, will be key. Moving to a new simplified organisational structure will enable better strategic decision-making which balances financial considerations, ambitions for us to build back better postpandemic, and Net Zero goals.’ Cllr Martin Gannon, Chair of the North East Joint Transport Committee, said: ‘As a region we have a bold vision for integrated transport as outlined in the North East Transport Plan, and we’re pleased to see a commitment to giving local leaders greater control over local ticketing, timetables and stations. These decisions should not be taken by people based hundreds of miles away. As Great British Railways will be responsible for the whole railway, I look forward to better and more joined up planning for the future, aligned to what the economy needs, taking account of input from local areas.’
FirstGroup signs new national rail contracts for South Western Railway and Transpennine Express FirstGroup has agreed National Rail Contracts with the Department for Transport for its South Western Railway and TransPennine Express train operating companies. The new NRCs commenced on 30 May 2021, when the Emergency Recovery Measures Agreements came to an end. National Rail Contracts are a new contract structure for agreements between train operating companies and the DfT and the contracts for both SWR and TPE are among the first wave of NRCs to be announced. NRCs replace the previous revenue risk-based franchising system. The NRCs have a primary two-year term to the
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end of May 2023 for both SWR and TPE, and both have an option to be extended by up to two further years at the DfT’s discretion. Under the NRCs the DfT will retain all revenue risk and substantially all cost risk. For the Group’s 70 per cent share of the First MTR joint venture for SWR the fixed management fee is £3.3 million per annum and there is the opportunity to earn an additional fee of up to £9.9 million which is the maximum attainable performance fee. For TPE the fixed management fee is £2.3 million per annum and there is the opportunity to earn an additional fee of up to £5.2 million which is the maximum
attainable performance fee. The punctuality and other operational targets required to achieve the maximum level of performance fee are designed to incentivise the highest level of performance for customers. The NRCs achieve a more appropriate balance of risk and reward between FirstGroup and the Government. They carry no significant contingent capital risk, with the Group’s contingent capital for both the SWR and TPE NRCs totalling £15 million, 50 per cent of which is bonded. There are limited scenarios in which this contingent capital can be called upon, primarily in the event of early termination of the contracts by the operator.
