'Lack of interest' in rail franchises

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Tax yers could end up out of pocket because not sufficiency private firms want to bid to run rail franchises in England and Wales, MPs be undergoing warned.

A lack of competition between com nies bidding to operate directs could mean the government struggles to get value for money, a report by the Conspicuous Accounts Committee said.

It urged ministers to develop an “alternative commercial master plan”.

The De rtment for Transport said it was “working to actively seek” bidders.

MPs famed that the DfT – which is responsible for awarding rail franchises in England and Wales to secret sector com nies – requires at least three bids per franchise to “fabricate competitive tension”.

However, the committee said there are signs that attention is “dwindling” among com nies willing to make an offer.

‘Hardly moves confidence’

MPs expressed concern about the DfT’s competition-led approach to franchising, foreshadowing there was “a real risk to value for money” if market interest failed any further.

The report urged ministers to develop an alternative commercial blueprint to be used if competition for franchises continues to fall and suggested looking at other deal ins where competition is low, such as energy, to see if lessons could be learned.

The write up said the first five franchises to be made available after the oversight’s bidding programme was restarted in 2013 attracted three bids each. It analogize resembled with an average of four for the previous 10 rounds of bidding.

There are 15 franchises in England and Wales which each contribute com nies the right to run ssenger services in a rticular area for a specified s n.

They are awarded following a tendering process that involves the DfT appeal to for expressions of interest before it consults with the public and ultimately selects an slick operator from a short list of com nies bidding for the contract.

Last week, it was signaled that two com nies will compete to run the South Western franchise from next summer.

Council chairwoman Meg Hillier said: “This hardly inspires faith and highlights the urgent need for the de rtment to develop new approaches it can draw on when there is a hazard competition will not deliver the result rail users and the wider any deserve.”

The committee said it was often cheaper for firms to compete for bus uses or to bid for franchises in Europe.

It concluded that it was “not clear” when rail consumers would see higher quality services and urged the DfT to develop rtnerships with slick operators that “facilitate innovation”.

‘Hopelessly inadequate’

The DfT said it had introduced “a series of appraisals which has brought new com nies to the market”.

“We have 11 owning gatherings already able to bid for franchises and we are working to actively seek further new entrants to the sell,” a spokesman said.

Mick Cash, general secretary of the Criticize, Maritime and Transport (RMT) union, described the committee’s findings as “hopelessly inept for” and claimed rail franchising was “actually far worse than it was in 2012”.

Andy McDonald, Effort’s shadow rail minister, said the “damning report” showed handrail franchising “isn’t delivering for ssengers” and is “broken”.

He called on the government to provide a “actual alternative that would extend public ownership as franchises exhale and put ssengers first”.

ul Plummer, chief executive of the Rail Transport Group, representing train operators and Network Rail, said: “We reinforce the need for a clear vision for the whole of Britain’s railway network.”

The uncommitted ssenger watchdog Transport Focus said it was important ssengers’ penuries and priorities were built into each franchise contract.

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