UK: The government has introduced to parliament a bill to create the legal framework for transferring the operation of passenger rail services in Great Britain from private sector contractors to public sector companies. The direct award of a contract to a public sector operator would become the default, rather than a last resort.
The Passenger Railway Services (Public Ownership) Bill amends the Railways Act 1993 to allow operations to be transferred when the current National Rail Contracts with private operators expire at their end date or a break point. The bill also removes a requirement to give at least 12 months’ notice before awarding contracts to public sector companies.
The Secretary of State, Scottish Ministers and Welsh Ministers would only be able to award a contract to a public sector operator. However, the Secretary of State would be able to make short further awards or extensions to incumbents where it will not be practicable to award a contract to a public sector company; this would not apply to Scottish or Welsh ministers, as the services they are responsible for are already operated by the public sector.
Costs and savings
The government estimates that transferring services to the public sector could result in a saving of fixed and performance-based management fees totalling £110m to £150m by the time all franchised contracts have expired, expected by October 2027.
Mobilisation and due diligence costs are estimated at £1m to £1·5m per transaction, similar to the costs following any franchise award.
‘Weighty, radical legislative agenda’
‘As Passenger-in-Chief, I said we’d move fast and fix things and that’s exactly what we’re doing with this weighty, radical legislative agenda’, Transport Secretary Louise Haigh said following the first reading of the bill on July 18.
She said ’publicly-owned passenger rail will put an end to years of waste and fragmentation on our railways and establish a more efficient, higher quality and reliable service’.
The government proposes to bring forward more extensive primary legislation for rail reform, including the establishment of Great British Railways, later in the parliamentary session.
