Dr. Ashley Steel, Global Chair for Transport at KPMG, comments on the new rail franchising programme announced by the Government today:
“The most fascinating point about today’s rail franchising announcement is the significant number of extensions to existing contracts plus the length of some extensions. Notably, South Eastern by 50 months; Cross Country 43 months; Great Western 33 months; East Midlands 30 months; and West Coast by 29 months.
“Whilst extensions will require renegotiated contracts the news will bring some respite to existing train companies. A failure to agree will risk the DfT having to take the contracts, back in-house, via Directly Operated Railways, the current operator of the East Coast Line.
“The announcement to tender East Coast this year further confirms Government’s recognition that private sector operation of our railways is preferable to that of the public sector.
“Since privatisation, railway passenger journeys have increased 92% and we should not under estimate the vital role of private company management in making this feasible.
“Overall, when you add in the Docklands Light Railway, Crossrail, Scotrail and the Caledonian Sleeper service, all being tendered in the next 12 months, to the franchise timetable announced today, rail operating groups have significant revenues to competitively bid for.”
Katrin Boettger, Senior PR Manager
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