GNER franchise to terminate in "12 to 18 months"

Department for Transport notice that it has reached agreement with GNER for an early termination of the Intercity East Coast passenger rail franchise. The precise terms are not disclosed but one might infer from the notice that the planned increase in GNER's performance bond is cancelled, GNER's financial projections for the franchise are consigned to history, and that GNER is given full financial protection against adverse revenue risk during the transition period, in exchange for remitting to the Government "the majority of the company's net worth", funding the Government's re-tendering costs, and having its profits from unexpectedly high revenues (relative to a new benchmark set by the Government) reduced to an undisclosed "incentive payment".

Update, 14 February 2007: Links repaired or deleted following DfT website changes.

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Filed under DfT, ECML, Public transport.

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