Government guide to railway franchise procurement

Department for Transport guide to the Government's latest approach to passenger rail service franchising. The pre-qualification stage is described as a way of selecting (before seeking any offers for the specific contract to be let) the 3-5 bidders with the best experience, competence and track record in relevant areas: it is not a filter against an absolute threshold of competence. The selection of the franchisee appears to be driven by a net present value of subsidy/premium calculated on the basis of the minimum service specification excluding any options, a common revenue forecast, and a 3.5 per cent real discount rate. Adjustments for likely service punctuality and reliability are made to this NPV but seemingly not to revenue forecasts or to their implications for Government subsidy or premium (given the risk-sharing arrangements in the franchise contract). The document does not mention on-track competition or open access.

Update, April 2007: This was available as a convenient 8-page PDF on the old DfT site but only seems to be published as a series of web pages on the new site.

For further information or advice please contact Franck Latrémolière.

Filed under DfT, Public transport.

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