Franchise model blamed for East Coast Mainline ‘failure’
THE Government has come under pressure to change how rail franchises operate after the outgoing franchise model was partly blamed for the failure of National Express East Coast’s (NXEC) licensing of the East Coast Mainline.
Leeds, York and North Yorkshire Chamber of Commerce is lobbying the government following a meeting at York Business Forum featuring guest speakers from NXEC.
Concerns were raised that the current franchise model put NXEC at a disadvantage to deal with the recession that struck the company six months after taking over the contract.
The franchise will be handed back to the government on Saturday, less than two years since NXEC took over the operation from GNER.
Under the current model little government support is given to operators during the first four years of the licence. After four years operators can receive government support whereby if revenue falls below 94%, the government will subsidise 80% of the shortfall.
During this recession NXEC received no government support while other more established rail operators were entitled to subsidies, the forum was told.
Shaun Watts, president of the York and North Yorkshire Chamber of Commerce said: “There have now been two failed operators of the East Coast Mainline in as many years and the next franchise operator will potentially follow a similar fate if these issues are not addressed now.
“Our region’s economy is heavily dependent on the East Coast Mainline for its connections to the capital and beyond and it is crucial for the continued success of the region’s business and tourism industries. The current franchise model jeopardises our economy’s success as it brings instability as well as the potential risk of price rises, less frequent trains and poorer service.”
