DfT examples of market-led proposals

1: A new commercial route

A design and build contractor works with an investor to propose a new route passing through a housing development site. Funding would be private, and its business case would need to show how its financing costs could be met from increased farebox revenue (subject to ORR consent). Payments might be made on the basis of asset availability. The DfT could run an open competition for a design, build, finance and maintain contract to find best value for money.

2: Traffic management system

An MLP could offer a traffic management system to enhance an existing signalling system. It might cut disruption and so reduce compensation costs to train operators. The MLP would provide all capital costs to install the kit and maintain it. It would need to agree commercial terms with the train operator based on the saving and benefits the system provides. The train operator would need DfT approval, since the change in funding would affect the franchise.

3: A new branch line

An MLP from a consortium of promoters, designers and contractors might propose to reopen a branch line and its terminal station. Funding might come from them, and might include a grant from a Local Enterprise Partnership or local authority funding. The DfT could run a competition to buy a design and build contract from the consortium or winning bidder. Affordability could be shown by increased demand bringing in sufficient access charges to cover operating and maintenance costs. The branch could be transferred to NR’s asset base. DfT might consider accepting demand risk if this brings value for money.