MPs pursue updates on progress of National Rail Contracts

The Department for Transport is “very keen” to see the train operating companies’ National Rail Contracts (NRCs) delivered to the future Great British Railways “as soon as it exists as a legal entity”.

So said DfT Director General for Rail Services and Strategy Conrad Bailey CBE, at a House of Commons Transport Select Committee meeting on March 30.

The hearing, at which Transport Minister Wendy Morton and GBR Transition Team Lead (and Network Rail Chief Executive) Andrew Haines OBE joined Bailey in facing MPs’ questions, had originally been set for January. However, the TSC was persuaded that a delay was necessary because little information would be ready for scrutiny at that time.

Nevertheless, TSC Chairman Huw Merriman noted that despite the delay, “there still doesn’t appear to be that much [information] in front of us”.

Morton explained that the GBR Transition Taskforce Team is being formed with the aim of having it and its associated legislation in place by “early 2024”.

Haines added that “a transition is under way” from the pandemicrelated Emergency Recovery contracts agreed in September 2020 to the new National Rail Contracts, explaining that the modified contracts would be a stepping stone towards the final agreements.

Merriman noted that several operators will be receiving three-year contracts, expressing the opinion that this was “quite long”. He asked what term the longest contract would be, and Haines replied that the longest was the four-year deal given to TransPennine Express with a potential four-year extension.

Haines told MPs that the contracts gave GBR “more levers to adjust TOCs’ contracts, outputs, and work more collaboratively between Network Rail and the TOCs” while giving “different forms of incentives that were not there during the franchise system”.

He summarised the NRCs as “a significant move in the right direction, although not the ultimate end state”.

Merriman voiced his concern that although the DfT “has its hands on the ‘train set’, some are concerned it doesn’t want to give it up”. He questioned if there was any incentive for the DfT to get on with “handing things over” to GBR and asked if GBR would effectively have to operate with a plan drawn-up and handed over by the DfT.

Morton observed that there remains a need to provide continuity of service, while Haines added that the extended timeline towards issuing contracts was largely down to the private sector needing that time.

“They are not able to service every railway contract going to the market at the same time. It creates an artificial bow-wave of work and in some cases, like TransPennine, the nature of the infrastructure work means we want some continuity,” he said.

“That’s largely the reason. It’s not because of a lack of co-operation between the Transition Team and DfT.”

Bailey remarked how the DfT is “very keen” to see the NRCs delivered to GBR as soon as legally possible. Noting the co-operation between the DfT’s Passenger Services team and GBR’s Transition Team, he said the design and development of the new NRCs with input from the sector, “has to be led by the DfT because of the nature of the current legal situation”.

He confirmed that DfT has already carried out one round of market negotiations.