East coast train train. Courtesy of Phil Marsh

East Coast Trains to return to the private sector

Published 03rd April 2013

Beeching anniversary marked by change in franchising policy

The Transport Secretary, Patrick McLoughlin has announced another twist in their rail franchising policy. In a statement to Parliament he said that the new long-term plans were designed to drive improvements to rail services, deliver on major infrastructure projects, and put passengers at the heart of a revitalised rail franchising system.

So what does this rhetoric really mean? A detailed timetable was published showing franchising timescales reaching out to 2021 which starts with the launch of the competition for the East Coast Trains (ECT) franchise. The details show that the ECT franchise process may take two years to complete before trains are run by a private company by February 2015 in the run-up to the next general election.

New approach

The Government says that the new approach to franchising will provide long-term certainty for the market and support the Department for Transport’s (DfT) massive programme of rail investment while also reflecting the recommendations of the Brown Review of rail reform.

The revised vision means that the DfT as they say, “will work closely with the industry to negotiate further new services and more capacity in franchising contracts while delivering the best deal for both passengers and taxpayers”. The new approach will include passengers’ views on train company performance playing an enhanced role in deciding whether to continue an operator’s contract.

New Advisory Panel

The Government is establishing a Franchise Advisory Panel, headed by Richard Brown which will provide independent advice to support the DfT’s rail franchising.

It will advise, support and inform the Secretary of State on the DfT’s work on the rail franchising programme while supporting and challenging the Franchising Director and franchising team as they progress the programme. It will also provide a commercial perspective to the programme, and help assure the Secretary of State, the Permanent Secretary and the rail market that sound advice, assurance and governance processes are in place.

The four or five member panel will be appointed by the Secretary of State and will only advise and not be involved in making franchise awards.

They said:

Patrick McLoughlin said: “This programme is a major step in delivering tangible improvements to services, providing long-term certainty to the market and supporting our huge programme of rail investment. Above all, in future franchise competitions we are placing passengers in the driving seat by ensuring that their views and satisfaction levels are taken into account when deciding which companies run our railway services”.

Richard Brown, said: “I am pleased to see that Government has engaged with my recommendations. It is clear to me that this announcement represents an opportunity for Government to seek competitive and innovative proposals from the existing Train Operating Companies and potential new market entrants to demonstrate how they will continue to improve services for passengers.

The clarity around the franchise programme will also allow fresh energy to be brought to the urgent task of developing closer partnerships with Network Rail to drive out costs from the industry and provide a better deal for passengers and taxpayers.”

Graham Smith, Director-General of the Rail Delivery Group, said: “Britain’s railways have enjoyed significant growth and investment – restoring passenger, taxpayer and investor confidence in the franchising process will allow this growth to continue. A restart of the franchising programme, a transparent procurement process and clarity on what Government wishes the passenger railway to provide will all help re-establish confidence and enable franchisees to deliver improved services for passengers.

“Rail Delivery Group Members will continue to work collaboratively with government to deliver the new programme, including franchise extensions where these are required, to get the best deal for passengers.”

Rail.co.uk said on March 7:

Rail.co.uk wrote on www.rail.co.uk/rail-news/2013/financial-fallout-from-west-coast-franchising that the task of delivering four franchise competitions at the same time would be a challenge for the DfT. This latest announcement confirms that this was a correct assumption as the new programme, the Government says, will provide a more sustainable schedule for rail franchising by delivering no more than three to four competitions per year, and staggering the two principal Intercity franchises, West Coast and East Coast, so they will not be let at the same point in the economic cycle.

So to create a manageable workflow for refranchising, the Government in their own words; “Will use a mixture of extensions to existing franchises and direct award contracts to ensure the realignment of the programme. During this process the Department will look to negotiate further passenger benefits, which will ensure the best deal for taxpayers”.

First Extension

The DfT also announced that it had served notice on First Capital Connect and Southeastern to invoke contractual six-month extensions to their franchises.

Just in case…

In case something untoward happens in the negotiations, the Government’s Directly Operated Railways will be ready to jump into the fray and to operate services.

Provocative Statement?

The Transport Secretary also said that he shared the view of the last Labour government, which is that franchising works. He said that; “In 2009 on the east coast, ministers brought in Directly Operated Railways as a short-term stand-in. They did what was needed in difficult circumstances. But the East Coast mainline, upgraded in the 80s, needs revitalising now.

New trains, to be built in the north-east, are now on order. Now it is the right time that we invite bidders to put forward proposals for investing in and improving services.

This will be the first of the new inter-city franchises to be awarded in 2014. In a programme that meets my three essential principles of better service, better competition and better value.

East Coast Trains said:

An East Coast spokesman said: "We always believed that a return of this franchise to the private sector was inevitable. Since we took over in 2009, we have repaid more than £640m to the taxpayer, achieved record-breaking customer satisfaction and the best performance on the route since records began in 1999.

"We are working on a plan for the next five years of the franchise which will consider some major decisions and projections for growth. This will be available to assist the future owner, whoever that is."

The future franchises

Each franchise’s duration will depend on individual circumstances but is likely to be between seven to ten years initially with a three to five year extension clause attached to it. The DfT has said it will make public a franchising competition process guide on June 25 giving details of the procurement and governance structure to be adopted by the DfT.

East Coast James Bond train

East Coast Trains turned out their train No. 007 in a temporary James Bond Skyfall livery during March. It celebrated what is said to be the biggest film in British cinematic history, and to mark the film’s DVD and BLU-RAY launch ECT allowed a temporary redecoration of a train in an all over Skyfall vinyl wrap.

ECT entered into a unique partnership with Twentieth Century Fox Home Entertainment, Metro Goldwyn-Meyer Studios resulting in the striking livery with artwork showing the film’s stars and the legendary 007 insignia as part of the train’s temporary livery.

The train’s first trip was from renumbered Platform 007 at Kings Cross on an Edinburgh service (the home of James Bond). The train travelled slowly over the Royal Border Bridge at Berwick to allow champaign to be dispensed just before 2pm celebrating a film scene filmed showing Bond crossing a similar bridge in Turkey, the Varda Bridge.

Written by Phil Marsh

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