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Railhub Archive
1996-02-06 HoC-001
House of Commons Library


Rail passenger franchises

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Franchising Director
Great Western Trains
LTS Rail
Office of the Rail Regulator
Office of Passenger Rail Franchising
pressure groups
Railways Act 1993
Save our Railways
South West Trains

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House of Commons Library

Rail passenger franchises

6 February 1996
source House of Commons Library
type Publication

summary A briefing, intended primarily for MPs, about the progress being made with railway privatisation, dated 6 February 1996. It was therefore published two days after the first two franchises had begun operating. It is a detailed guide, including quotes from the Rail Regulator, the Franchising Director and various statutes. It also records the stance of pressure groups.

The first passenger train franchises, South West Trains, Great Western and LTS Rail were
awarded on 19 and 20 December 1995 and the first two privatised services started operating
on Sunday 4 February 1996. Others are expected to follow soon.

The regulatory background to the franchising of the passenger train operating companies is
set out in Part I of the paper. The Railways Act 1993 provides the legal framework and
separated responsibility for the track and the train services. The Franchising Director is
responsible for securing the provision of railway passenger services by entering into franchise
agreements. Each of the 25 train operating companies is gradually being offered for sale as
a separate franchise. The Rail Regulator also has a significant role to play in deciding the
legal and economic background in which a franchisee will operate. He licenses the operators,
decides the track access charges and determines the competitive background.

A franchise is the right to run specified services within a specified area for a specified period
of time, in return for the right to charge fares and, where appropriate, to receive support from
the Franchising Director. The rights and obligations are specified in a franchise agreement
between the Franchising Director and the train operator. Each franchise will be negotiated
individually with the Franchising Director. Franchisees will earn revenue primarily from fares
and from subsidy.

Part II of the paper sets out chronologically what has happened to the franchising process
from the announcement in December 1994 of the pre-qualification bids for the first eight
companies to the award of the first three franchises in December 1995.

(See related documents for full text.)

Railhub Archive ::: 1996-02-06 HoC-001


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