Can semi-permanent rail franchises encourage investment?

[miklcct]

Train operating companies are not willing to make capital investments if there is no guarantee that they can keep their franchise after it expires.

If rail franchises are guaranteed to be renewed upon meeting certain service criteria (effectively making them permanent as long as they keep to the service standard), can they encourage train operating companies to fund long term investments, including buying new trains, improving station facilities, or even signalling upgrades?

 

[swt_passenger]

Train operating companies are not willing to make capital investments if there is no guarantee that they can keep their franchise after it expires.

If rail franchises are guaranteed to be renewed upon meeting certain service criteria (effectively making them permanent as long as they keep to the service standard), can they encourage train operating companies to fund long term investments, including buying new trains, improving station facilities, or even signalling upgrades?

Yes it is possible, because it was tried once, with the original Chiltern, who had a long franchise that was usually referred to as 20 years. Although the contract required a review of progress at the 10 year point it was generally assumed they’d done enough to keep going. Chiltern’s franchise included various redoubling and signalling schemes under the “Evergreen” name, but IIRC there was a higher level of NR control in the later projects for some reason, ie Oxford to Bicester and the new curve towards Marylebone.

But Chiltern is the only example of a planned long franchise that I can think of.

 

[Sorcerer]

I believe Richard Branson wanted to have a franchise period extended for 20 to 30 years so more could be spent on infrastructure and to see a return on the investment such as reducing journey times to Birmingham to one hour. I think that concessions or longer franchises could probably do better though with penalties or contract revoking for failing to meet a set of standards while also not having the Department for Transport micromanaging, but I am no expert when it comes to running railways.

 

[SargeNpton]

I believe Richard Branson wanted to have a franchise period extended for 20 to 30 years so more could be spent on infrastructure and to see a return on the investment such as reducing journey times to Birmingham to one hour. I think that concessions or longer franchises could probably do better though with penalties or contract revoking for failing to meet a set of standards while also not having the Department for Transport micromanaging, but I am no expert when it comes to running railways.

Didn't Mr Branson also want exclusive use of the fast lines as part of the deal?

 

[swt_passenger]

Didn't Mr Branson also want exclusive use of the fast lines as part of the deal?

So it is often said. But perhaps it was Branson‘s wishlist that was used as an example of why it wasn’t going to happen again…

 

[Sorcerer]

Didn't Mr Branson also want exclusive use of the fast lines as part of the deal?

I didn't quite know about that part to be honest. However those sorts of ideas could never be implemented (nor should they) under the previous franchise system because the contracts were often too short. As another example, the choice to replace the Super Voyager fleet on the West Coast Main Line might not have been much of an idea for Virgin in their final years, but for Avanti when they started, they could've very well had time to see the impact any new trains would have on the network. That's obviously simplifying it a little but I couldn't see Virgin/Stagecoach offering a new fleet between 2012-2019 since that was a period of uncertainty followed by one/two year franchise extensions after the other. I don't particularly agree with semi-permanent franchising, but it would be somewhat preferable to the old model if they were somehow the only two options.

 

[Doctor Fegg]

Yes it is possible, because it was tried once, with the original Chiltern, who had a long franchise that was usually referred to as 20 years.

Conversely, Arriva Trains Wales had a pretty long franchise (15 years) and did precious little.

 

[61653 HTAFC]

Conversely, Arriva Trains Wales had a pretty long franchise (15 years) and did precious little.

Wasn't that one of the much maligned "zero growth" contracts? Basically the worst of both worlds.