Rail franchise hit by new delay as deadline passes
THE award of a new Wales and Borders rail franchise has suffered a further delay, with a second deadline passing without a crucial announcement being made.
Last month a leaked letter from UK Transport Secretary Chris Grayling blamed civil servants in Cardiff for failing to address major issues needed to move forward with the new franchise, whose operator will be responsible for implementing key parts of the Welsh Government’s ambitious vision for rail services in Wales.
New rolling stock, electrification of the Valleys and North Wales lines, a South and North Wales Metro and widespread structural improvements are all priorities for the next 10 years under the next franchise.
The Welsh Government put back its plan to formally launch a search for a new operator by six weeks from August 18 to September 26. But September 26 has arrived without the promised announcement.
Plaid Cymru has warned that further delays to the franchise – which does not include mainline highspeed services – could cost “tens of millions of pounds”.
The original August 18 deadline was missed because of the Welsh Government’s failure to obtain the necessary powers from Westminster.
Ken Skates, the Cabinet Secretary for Economy and Infrastructure, Cabinet Secretary confirmed in July that the delay would cost Welsh taxpayers £3.5m.
With the second deadline missed, Plaid Cymru fears the cost to the Welsh taxpayer could spiral. Plaid has been highlighting concerns over the franchise for the past year. This has included an urgent question in the Assembly, to which the Cabinet Secretary responded that everything was “on track”.
Among the range of issues disputed by Mr Grayling is the £1bn “Network Rail rebate” which the Welsh Government had assumed it would have control over.
The Welsh Government wants £1bn plus £3.5m for delays it claims were caused because of June’s general election.
The £1bn requested by the Welsh Government relates to an annual rebate of £67m given by current franchise holder, Arriva Trains Wales, to Westminster’s Department for Transport. The rebate, which is linked to track charges, is passed to Network Rail via a grant for improving railways. However, the rail infrastructure in Wales will remain in UK government hands after the handling of the franchise is devolved to Wales from 2018.
The Welsh Government says this means it will not be able to collect the rebate - which it has calculated to be worth £1bn over the 15-year span of the contract.
In a letter to Welsh Economy Secretary Ken Skates, Mr Grayling said he would only authorise the tender process continuing when agreement is reached on this.
He described it as a “claim which would commit my department to finding an additional £1bn over the franchise term, compared with today, and for which I see no basis”.
Plaid Cymru’s Infrastructure spokesman Dr Dai Lloyd said: “The official tender has not even been issued and this Welsh Government has almost derailed the next Wales and Borders Rail franchise.
“A £1bn black hole in the franchise agreement was uncovered after the Westminster Transport Secretary confirmed the ‘Network Rail rebate’ could mean passengers are left high and dry.”
A Welsh Government spokesman said: “We are awaiting final sign-off from UK Government and expect to have positive news on this very shortly.”