DfT examines future of Northern franchise
Government could axe the Northern franchise at the start of 2020, with contingency plans being developed to replace the existing deal with either a new short-term management contract (with Northern) or an Operator of Last Resort (OLR).
A Department for Transport spokesman told RAIL on October 16: “In the context of significant challenges facing the operator, such as delays to infrastructure upgrades and historic underinvestment in the northern rail network, issuing a Request for Proposal enables the Department to examine whether the contract is properly aligned with current operating challenges in the North.
“It also allows us to determine whether the franchise owner or an OLR would be best placed to tackle these issues and deliver for passengers.”
Government explained that the development and consideration of options is expected to be carried out by the end of 2019, and that it expects to make a decision in the New Year.
Should Government find Northern to be in default of its current contract, and that the default is material and not repairable, then DfT has the right to terminate the current deal.
“If such a right is exercised, a decision on the next steps will be based on a full and rigorous analysis into what delivers the best outcomes for passengers and taxpayers, and what would best enable the implementation of the forthcoming recommendations of the Williams Review,” the spokesman explained.
DfT said operators are required to maintain prescribed levels of financial solvency, and that if these financial ratios are breached the Government can terminate the franchise. It has been speculated that Northern is suffering financially, but sources have denied this.
Secretary of State for Transport Grant Shapps told the House of Commmons Transport Select Committee on October 16 that he has requested proposals from Northern and an Operator of Last Resort, in a bid to resolve the issues.
“If you’re a Northern passenger you’re probably as frustrated as I was about the 2018 timetable changes,” he said.
Northern Managing Director David Brown said: “It’s on record that the Northern franchise has faced several material and unprecedented challenges in the past couple of years, outside the direct control of Northern. The most significant of these is the ongoing, late delivery of major infrastructure upgrades.
“The North West electrification was more than two years late, which meant we could not use electric trains on that route or cascade diesel trains from that route to run more services elsewhere on our network. More recently, new and longer platforms at Leeds stations are delayed,
which means we have had to postpone our plans to run longer trains.
“These factors - alongside the damage caused by strike action and lower-than-expected economic growth - have had a significant effect on the revenue expected in our original franchise business plan agreed with government back in 2015.
“That’s why the Government has asked us to prepare a business plan for a shorter ‘Direct Award’. We are well under way with the development of that plan.”
Greater Manchester Mayor Andy Burnham said: “After months of misery it is a relief for us to hear Government finally accept what we’ve been saying repeatedly, that things can’t carry on as they are.
“Northern passengers will agree with the Transport sSecretary that the current situation of unreliable, overcrowded trains cannot continue.”
Shadow Transport Secretary Andy McDonald said: “Northern Rail’s incompetent operator should have been stripped of its contract years ago over its abysmal performance record. The Government’s refusal to do so has meant massive inconvenience for rail passengers and damage to the region’s economy.
“The service should be taken into public ownership at the soonest opportunity, but so should the rest of the railway.”
David Hoggarth, Strategic Rail Director for Transport for the North, said: “Our members have made clear their frustration over a number of performance issues in relation to the Northern rail franchise.
“While we are now seeing some new trains come into service, albeit late, there are still underlying issues that remain a matter of concern.”
He added: “In order to rebuild confidence with the travelling public, we are of the view that, should it be necessary, putting in an Operator of Last Resort would be the only feasible solution for any interim arrangement. We’ve been clear that in establishing any such arrangement, Transport for the North - and its members, including city leaders and metro mayors - should have a strong involvement in the scope of this and in the oversight of the interim operator.”
Henri Murison, Director, Northern Powerhouse Partnership said: “The current situation on Northern Rail is primarily a result of delayed infrastructure upgrades, preventing new direct services being introduced because the Northern Hub plan has never been completed.
“Northern leaders have a preference for an Operator of Last Resort, but I would suggest that many business leaders would prioritise that government bought more new trains for the North rather than focus on moving around the deck chairs on the Titanic.”