Government refuses to make public key LNER details

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.