Rail Franchises
The Department for Transport (DfT) is responsible for selecting tain operating companies (TOCs) to run passenger franchises. The DfT tender franchises and transport operators compete to win them. Franchises vary in length but currently typically average around eight years.
The franchise agreement is a contract and sets out the requirements the Government expects the TOC to fulfil to deliver, including the rate of regulated rail fare increases and obligations.
UK rail infrastructure such as tracks, signalling, bridges, tunnels and stations owned by Network Rail. Rolling stock is typically leased by TOCs from a rolling stock leasing company.
There are currently 19 franchises in the UK of which Go-Ahead operates three: Southeastern, Southern (including Gatwick Express) and London Midland.
Rail franchise reform
In general, the privatisation of the rail industry has been highly successful and has resulted in unprecedented growth in passenger journeys. However, the economic downturn has highlighted issues with the current franchising model.
Operators have been working with the Government on ways to deliver a more sustainable business model benefiting passengers, tax payers and private companies through reforms such as:
- longer franchise
- less complex franchise specification
- improvements to the risk/reward share structure
In July 2010 the Department for Transport published a consultation document entitled "Shaping the future of rail franchising" which notes: 'The Government believe that the existing system of rail franchising has become too presecriptive at the point of bidding, and lacks flexibility once operational...We need to reform franchising to bring in more private sector investment in order to help deliver important improvements to the railways that passengers want.' The Government issued its response to the consultation in January 2011 which can be viewed on the DfT website.
The findings of Sir Roy McNulty's value-for-money study of the UK rail market were released in May and added further weight to the necessity for rail franchise reform. The report can be viewed on the Office for Rail Regulation website.
Our Rail Franchises
| Operating Company |
 |
 |
 |
| Revenue (£m)+ |
613.5 |
715.8 |
325.3 |
| Managing Director |
Chris Burchell |
Charles Horton |
Patrick Verwer |
| Geographical Area |
London
Surrey
East /West Sussex
Hampshire
Kent
|
London
Kent
East Sussex |
London
Milton Keynes
Northampton
Birmingham /West Midlands
Liverpool |
| Franchise renewal date |
July 2015 |
March 2014 |
September 2015 |
| Approx Passenger Numbers+ |
165 million |
161 million |
55 million |
| Avg Number of Employees+ |
4,039 |
3,709 |
2,342 |
| Fleet Size** |
311 trains |
367 trains |
163 trains |