Gov­ern­ment re­fuses to make pub­lic key LNER de­tails

Rail (UK) - - News -

The Gov­ern­ment says it will not make pub­lic the ex­act timescale for in­terim In­ter­city East Coast op­er­a­tor Lon­don North Eastern Rail­way (LNER). Nor will it clar­ify how op­er­a­tional and in­vest­ment risks will be man­aged un­til the longer-term East Coast Part­ner­ships (ECP) ar­range­ment is in place.

The state­ments were made in its re­sponse to the Trans­port Select Com­mit­tee (TSC) in­quiry into the East Coast fran­chise, pub­lished on Novem­ber 23.

The Gov­ern­ment said “the cre­ation of the ECP is an evo­lu­tion­ary process, not a sin­gle date”. It added that LNER has been set up as a pub­lic cor­po­ra­tion and that it op­er­ates in the pub­lic sec­tor as a com­mer­cial en­ter­prise. Its con­tract with the De­part­ment for Trans­port (DfT) is a Ser­vices Agree­ment act­ing as a proxy for a nor­mal fran­chise agree­ment.

Ex­plain­ing its dis­agree­ment with the TSC’s rec­om­men­da­tion, it said: “Due to the need to pre­serve com­mer­cial con­fi­den­tial­ity and a pre­dictable en­vi­ron­ment in which rail com­pa­nies can op­er­ate and in­vest with con­fi­dence, cer­tain in­for­ma­tion is redacted from Fran­chise Agree­ments avail­able on the Pub­lic Regis­ter.”

On Net­work Rail’s role in the fran­chise bid­ding process, Gov­ern­ment says the in­fra­struc­ture com­pany re­views all fran­chise bids and pro­vides eval­u­a­tors from the DfT with a de­tailed re­port cov­er­ing ar­eas such as bid­ders’ ap­proach to timetable devel­op­ment. The DfT also re­quires bid­ders to pro­vide ev­i­dence of the level of sup­port from NR for their pro­pos­als. The Gov­ern­ment adds that the DfT is solely re­spon­si­ble for deter­min­ing the out­come of the bid­ding process.

The Gov­ern­ment also re­jected a rec­om­men­da­tion that the DfT re­vis­its its ap­proach to fran­chise fail­ure, ar­gu­ing that the DfT has strength­ened its Fi­nan­cial Ro­bust­ness Test when as­sess­ing bids, and that if bids are fore­cast to fail dur­ing the core fran­chise term they are au­to­mat­i­cally elim­i­nated from the bid­ding process. The test also as­sesses the fi­nan­cial ro­bust­ness of bids in a ‘down­side sce­nario’ should fore­cast pas­sen­ger rev­enue be lower than ex­pected.

“These new mea­sures have been in­cor­po­rated into the cur­rent fran­chise com­pe­ti­tions and will pro­vide more ro­bust tests of the fran­chises’ long-term vi­a­bil­ity,” the Gov­ern­ment con­cluded.

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