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21 September 2020

DfT extends its emergency agreement with the train companies, ending rail franchising

Sub-theme: Transport

Summary

The Department for Transport (DfT) announces that, from 21 September 2020, franchising is replaced with Emergency Recovery Measures Agreements (ERMAs). This aims to mitigate the impact of COVID-19 on rail and 'delivers on a government commitment to replace the current franchising system' as 'a transitional stage to the new system, the biggest change to the railways in a quarter of a century'. According to the government, rail will need significant taxpayer support until passenger numbers return, including under the new transitional contracts. ERMAs have 'tougher performance targets' and lower management fees (at most 1.5% of the cost base of the franchise before the pandemic), aiming to encourage better coordination between operators and reduce capital costs. It is intended that operators run an 'almost full service' to enable social distancing in line with public health guidelines. The announcement comes in advance of a white paper responding to a government-commissioned review of railways, to be published 'when the course of the pandemic becomes clearer'.

Source(s)

Gov.uk press release