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US News Rail franchising model set to be scrapped in coming weeks

04:20  17 february  2020
04:20  17 february  2020 Source:   msn.com

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An eagerly-anticipated “root and branch” review of the railways is due to recommend scrapping the rail franchises in the coming weeks . It is set to be replaced with a system of outsourcing contracts over the ­ coming years as ministers gradually ­regain control of mainline and local franchises .

Franchising . Definition: The term ‘ franchise ‘ is understood as an exclusive right conferred by the parent organisation to an individual or enterprise to use the In franchising , the firm that grants a license is called franchiser , and the individual or entity to whom the right is conferred is franchisee.

  Rail franchising model set to be scrapped in coming weeks © Getty

Boris Johnson is set to dramatically overhaul the nation’s rail network by scrapping the rail franchise model and capping profits by private providers.

Former British Airways boss Keith Williams was drafted to conduct a review of Britain’s railways last year, with the report set to be released in the coming weeks. 

It’s now expected that it will recommend replacing the rail franchising model with a new system of awarding contracts, according to the Sunday Telegraph.

The new system would see franchises receive a set fee, with revenues collected by the government.

Under the current model, revenues are collected by franchisees with a cut given to the exchequer.

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The UK's rail franchising model is "no longer fit for purpose" and is failing passengers, MPs have warned. The Transport Committee said there It said the government should consider "restructuring" the franchise if operator Govia Thameslink was officially found to be in breach of its franchise .

The rail franchising process is to restart, the government will say on Tuesday, six months after the collapse of the West Coast deal stopped it. Ten of the country's 16 franchises are due for renewal before the general election, expected to be held in 2015, and a timetable will be set out.

The overhaul is expected to be managed by a new public organisation, which will be in charge of awarding contracts and monitoring performance.

Williams’ review will also recommend changing the current ticket system to a “single leg” model, which would mean fares are based on a per-journey basis.

A Department for Transport spokesperson confirmed that the review’s findings would soon be released.

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“These reforms will put passengers first, end the complicated franchising model and simplify fares for create a simpler, more effective system,” they said.

The Rail Delivery Group (RDG), which represents the country’s train companies and Network Rail, warned against implementing a “one-size-fits-all” system.

RDG director of public policy John Thomas said: “Rail companies want bold reform and we have proposed replacing the current franchising system with different types of contracts that better deliver for passengers, all overseen by an independent body and underpinned by a reformed fares system.

“We don’t think today’s system should be ­replaced by a one-size-fits all approach.

“While tightly specified concession and management contracts can work well in, for example, commuter markets, we believe outcome-based contracts can be a better option on long-distance routes. 

“They give operators more flexibility to innovate and ­respond to passengers’ evolving expectations in markets where there is scope to encourage more to travel by train.”

The Department for Transport declined to comment.

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