West Midlands Franchise Agreement

In January 2015, the Competition Authority (CMA) launched, as part of its legal competition obligation, a policy review to determine whether there are opportunities to improve the current system outside of the historical competition areas, namely the tendering procedure and open access operators. In July 2015, four areas of reform were identified: an increased role for open access operators, two successful bidders for each franchise, more overlapping franchises, and several operators with licenses on each line. [2] The regulator (then renamed the Office of Rail -Road) evaluated the CMA`s options, resulting in a final report in March 2016. [44] Railway franchisees in the United Kingdom accept commercial risks, although there are clauses in newer franchises that offer some compensation for expected revenues (and also recover some excess profits if these occur). In February 2002, the Chiltern franchise was the first franchisee for a 20-year term, the winner being Chiltern Railways, the franchisee established since privatization. [35] Prior to the formal tendering of a given franchise, the DfT publishes a Advance Information Communication (PIN code) in which basic details are provided and initiates a consultation with the relevant transport authorities, the decentralised administrations and the Focus Watchdog transport. At the end of this process, a formal tender (ITT) will be sent to the three to five potential bidders who have been qualified as pre-qualified, specifying the specific terms of the proposed franchise agreement. ITT may contain a number of variants reviewed by the potential bidder, who can also submit variants himself. The franchise is awarded to the offer considered to be the most profitable and offers the best value for money and the best reliability.

If so, the performance of the bidders is also taken into account. [6] As part of the emergency agreements dating back to March 1,[48] the ordinary financial mechanisms of franchise agreements were suspended so as not to put operating companies in financial difficulty. All revenues would be paid to the State, which would cover the costs borne by the operators, plus an administrative fee of up to 2% of their costs before the pandemic. [45] West Midlands trains continue to operate on the region`s rail network after Mayor Andy Street withheld his threat to ask the government to steal the franchise.