Railnews 284 News page 1 Lead HEAD: Rail franchising is over [BULLET] Government will continue to cover costs of passenger railway until 2022 PIC: Shapps.jpg CAP: Grant Shapps: ‘These agreements, which run for up to 18 months, are designed to bring the rail franchising system to an end’ THE Government has announced that rail franchising is ending, after more than 24 years. The Emergency Measures Agreements introduced in England on 23 March were extended by 18 months on 21 September and will be known from now on as Emergency Recovery Measures Agreements or ERMAs, while the Scottish Government had announced on 18 September that it had extended its support for ScotRail and Caledonian Sleeper, which started in April, for another six months. The first franchised services ran on 4 February 1996, and all British Rail’s passenger operations had been taken over by the private sector by mid-1997. The train operators continue to exist under ERMAs but are no longer considered to be franchises, assuming that talks with the Department for Transport over the terms of terminating their contracts reach agreement by December. The ERMAs mean that operators continue to take virtually no commercial risk, because their revenue is paid to the Department for Transport, which also pays their costs. The DfT said the new ERMAs are ‘more demanding’, and has reduced the 2 per cent management fee which was introduced in March to 1.5 per cent at most. The Williams Review of the structure of the railway industry has yet to be published, but it had been known that it was set to recommend the replacement of franchises with concessions, which already exist on the Docklands Light Railway and most tram systems. Under concessions operators are paid to provide a service for a more or less fixed fee, and have no discretion over fares or timetables. Transport secretary Grant Shapps said: ‘The model of privatisation adopted 25 years ago has seen significant rises in passenger numbers, but this pandemic has proven that it is no longer working. These agreements, which run for up to 18 months, are designed to bring the rail franchising system to an end.’ More, pages 3, 4 and 5 ENDS © Railnews Ltd 2020