Trains not good value, because of less interest?

12 February 2016

train A report from the Commons Public Accounts Committee (PAC) has asked the Department for Transport (DfT) to look at different commercial strategies if competition for rail franchises doesn't sort itself out soon.

They've said that maybe, someone might want to look at other markets where there's fewer companies involved, like the energy market, to see if there's anything to learn from there. Of course, the energy market has been a rampant success for consumers, hasn't it? Eh? No. Of course it hasn't.

Anyway, the committee said that the DfT, when awarding rail franchises in England and Wales to private companies, need at least three bids (per franchise) to get the required "competitive tension" and "increase the likelihood of receiving high-quality bids".

However, do companies want to get involved? The committee continued that there are "signs that the level of interest from the market in rail franchising is dwindling," and that "there is a real risk to value for money if market interest declines any further."

This is a problem. Last week, South Western trains was offered up, and only two companies showed an interest.

Committee chairwoman Meg Hillier said: "This hardly inspires confidence and highlights the urgent need for the department to develop new approaches it can draw on when there is a risk competition will not deliver the result rail users and the wider public deserve."

The DfT put a statement out about all this, saying; "Since the launch of the franchising programme in March 2013, the department has introduced a series of measures which has brought new companies to the market. We have 11 owning groups already able to bid for franchises and we are working to actively seek further new entrants to the market."

TOPICS:   Travel

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