Rail Franchises Suspended By Covid-19

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Emergency measures introduced by the UK Government have been set out today, by Transport Secretary Grant Shapps, which include suspending the normal rail franchises for a period of 6 months.  These are defined by the DfT (Department for Transport as Emergency Measures Agreements, and the train operating companies will be given the opportunity to “transition” to the new arrangements.  From the DfT:

“These agreements will suspend the normal financial mechanisms of franchise agreements, transferring all revenue and cost risk to the government. Operators will continue to run day-to-day services for a small, pre-determined management fee. Companies entering into these agreements will see a temporary suspension of their existing franchise agreement’s financial mechanisms for an initial period of 6 months, with options for further extension or earlier cancellation as agreed.”

Full details are here:

Rail emergency measures during the COVID-19 pandemic

Further coverage appeared in newspapers:

Screenshot 2020-03-23 at 11.55.34

 

www.theguardian.com/world/2020/mar/23/covid-19-government-suspends-rail-franchise-agreements

 

Screenshot 2020-03-23 at 11.54.46

 

https://www.independent.co.uk/travel/news-and-advice/coronavirus-uk-trains-rail-network-franchise-system-suspended-a9417476.html 

 

 

 

 

So, during the current crisis, it may, according to at least one report lead to a situation in the months to come where the old style franchising arrangements are no longer going to work.  As the Rail Delivery Group – the application and use of these Emergency Measures Agreements – are still being worked out.  Perhaps unsurprisngly this is likely to be a complex solution to manage, especially with so many different businesses involved.

This particular crisis has and will change the way we operate our society, and our business, and the way we interact with one another.

-oOo-

 

 

 

 

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