Operator of Last Resort to take over ScotRail franchise
A publicly owned Operator of Last Resort (OLR) will take over the ScotRail franchise in 12 months’ time when the Abellio franchise ends on March 31, the Scottish Government has confirmed.
The new OLR will be wholly owned by Transport Scotland and will continue to use ScotRail and Scotland’s Railway branding.
This means that from April 1 2022, ScotRail will join three other UK franchises which are already owned and operated by governments - both national and devolved.
It follows the OLRs appointed by the Department for Transport to succeed LNER from June 24 2018 and Northern from March 1 2020, and most recently by the devolved Welsh Assembly to succeed Transport for Wales Rail from February 7 this year.
RAIL understands that a number of options have been considered for the future of ScotRail, ever since a decision was taken in December 2019 to bring the current contract with Abellio to an early end on March 31 2022.
The contract was originally due to last until 2025, before a ‘breakclause’ was activated in response to perceived poor performance, plus a strong political desire to bring the passenger railway into the public sector.
Ministers at Holyrood have always indicated that they would ultimately like to create a publicly owned and fully integrated railway for Scotland.
However, currently lacking the powers to take further steps along this road, Scottish Government has needed to await the outcome of the UK Government-commissioned Williams Rail Review and for any subsequent transfer of powers from Westminster.
Unable to pursue this long-term strategy in the absence of the Williams Review findings, and with time running out to ensure continuity arrangements beyond next March, ministers have deemed the appointment of an OLR to be the best interim solution.
Speaking on March 17, Transport Secretary Michael Matheson said: “With the current franchise expected to end in March 2022, we need to take decisions about successor arrangements within the current legislative framework. We have for some time been considering the full range of options available under that framework for continuing services beyond the franchise expiry.
“Following a detailed assessment process and given the uncertainty caused by COVID-19, alongside the continuing delays to the UK Government White Paper on rail reform, I have decided that it would not be appropriate to award a franchise agreement to any party at this time, either through a competition or a Direct Award.
“That is why I have confirmed that, from the expiry of the current franchise, ScotRail services will be provided in public hands through a company wholly owned and controlled by the Scottish Government. This is in line with our Operator of Last Resort duty.”
Soundings taken by RAIL indicate that this is an amicable parting with Abellio, with sources close to Holyrood saying that the company has earned the respect of the Scottish Government.
RAIL sources also indicate that private sector delivery and operation of the publicly owned and integrated (and therefore nationalised) railway, envisioned in the long-standing Holyrood strategy, is entirely possible.
Scottish Government has also allocated a further £173.1 million to extend Emergency Measures Agreements for the ScotRail and Caledonian Sleeper franchises from April 1-September 19.