UK puts brakes on rail franchises

DEMAND DOWN: SYSTEM NOT WORKING CURRENTLY

Concession-style agreements come in with state subsidies remaining.

Britain launched a radical overhaul yesterday of its coronavirus-plagued privatised rail sector that will see franchises replaced with concessions subject to tougher scrutiny and greater state involvement.

Train services will no longer be managed by franchises, which handed their management to private operator companies, and these will be replaced by concession-style agreements.

“Ministers today ended rail franchising after 24 years as the first step in bringing Britain’s fragmented network back together,” the department for transport said.

While Britain’s rail tracks remain in state hands, the trains are run by mostly private companies enjoying large government subsidies. But Prime Minister Boris Johnson’s Conservative government decided in March to take on rail franchise holders’ revenue and cost risks as the pandemic decimated demand.

The move was part of emergency measures that cost £3.5 billion (R74.3 billion), according to media reports.

Transport Secretary Grant Shapps declared yesterday that the privatised rail model was not working in the current climate, as many commuters and travellers stayed at home. “Our new deal for rail demands more for passengers. It will simplify people’s journeys, ending the confusion about whether you are using the right ticket or the right train company.”

The department for transport said it would maintain the current “significant” levels of state support under the new Emergency Recovery Management Agreements, but aimed to achieve savings in the long run.

Keith Williams, a former British Airways boss commissioned by the government to carry out a review of the rail sector, welcomed the new strategy.

“These new agreements represent the end of the complicated franchising system, demand more from the expertise and skills of the private sector, and ensure passengers return to a more punctual and coordinated railway,” he said.

But trade unions slammed it. “Public ownership is the only model that works,” said Rail, Maritime and Transport union general secretary Mick Cash. – AFP

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