Page last updated at 00:34 GMT, Friday, 30 October 2009

Train firms seek longer contracts

National Express train
National Express failed to convince ministers to revise its contract terms

Train companies have called for longer rail franchises to allow them to provide better quality services.

The Association of Train Operating Companies (Atoc) says agreements of 15-20 years would encourage managers to improve services and boost investment.

Currently bidders compete for deals typically lasting seven years.

A Department for Transport spokesman said the government was "committed to putting passengers first" when negotiating new franchises.

"We are constantly looking at ways to further improve our railways and this includes considering improvements to the rail franchising system," he said.

'Micro-management'

Atoc says longer franchises could attract more private finance into the rail sector as operators would have more time to benefit from investment.

The organisation also says longer deals would allow rail managers to focus on improving services for passengers rather than concentrating on bidding for the next franchise.

Atoc also calls for an end to "inappropriate micro-management" by civil servants.

It suggests the government should concentrate on the results it wishes to see from franchises, such as improved passenger satisfaction and punctuality, rather than specific details, like the number of ticket machines.

The Atoc report also addresses the risks train companies face in an economic downturn when passenger numbers fall.

The government took away the franchise for the East Coast Main Line from National Express when the company made huge losses and failed to convince ministers to revise its terms.

Atoc suggests linking franchise payments to GDP output and beginning revenue support earlier in the franchise.

'Passenger satisfaction'

Atoc chief executive Michael Roberts said there was a "window of opportunity" to improve the system.

He said: "By implementing a package of focused reforms in time for the next franchises which have to be let, the government can increase the scope for train companies to bring innovation and commercial nous into improving the railways.

"Equally we would keep the existing mechanisms to deal with any company that fails to perform. Terminating a franchise under our proposals would be no more difficult for a longer franchise than a shorter one."

Rail user groups are calling for passengers' needs to be at the heart of any future changes.

Ashwin Kumar, Passenger Focus director, said: "We believe passenger satisfaction targets should be a key part of future franchise contracts as well as a continued focus on improving punctuality."

Shadow transport secretary Theresa Villiers said Atoc's suggestions supported Conservative proposals made earlier this year.

She said Conservative plans for longer franchises were "the only credible alternative to Labour's flawed franchising process".

Liberal Democrat transport spokesman Norman Baker said train passengers have been getting a "raw deal" from the way franchises have been set up.

"We need to grow the railways. Longer franchises will get money into the industry by giving companies an incentive to invest in real, long-term improvements," he said.



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SEE ALSO
National Express warns on profits
22 Oct 09 |  Business
East Coast rail to be state-run
01 Jul 09 |  Business
Move to reinstate lost rail lines
15 Jun 09 |  England

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