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Network Rail division to scrutinise franchise bids following East Coast collapse

A Network Rail body will add an extra layer of scrutiny to new rail franchise bids to make sure that plans by operators are workable, in the wake of the collapse of the East Coast mainline contract.
The recently launched body, called the System Operator, will sit within Network Rail and is likely to have a busy few years with new contracts set to start on East Midlands and Southeastern in 2019 and on the West Coast mainline in 2020.
The System Operator was put in place a year ago but its workload will only start to ramp up now, as it prepares to assess the bids which come in for new franchises. The move comes just as the East Coast mainline joint venture between Stagecoach and Virgin Trains looks set to hand the keys back to the franchise just three years into an eight-year deal.
Outgoing Network Rail boss Mark Carne said the division’s comments on new rail contracts would have greater weight because it would be separately funded and also more embedded in the regulatory infrastructure of the rail industry.
“If a train company submits a bid with a level of performance reliability that the System Operator didn’t think was achievable, it would be able to say so as well as asking for proof from the company,” Mr Carne said.
Network Rail division to scrutinise franchise bids following East Coast collapse

Outgoing Network Rail boss Mark Carne has said the System Operator will provide an extra layer of scrutiny on new rail bids
The System Operator will have a formal role in approving prospective new timetables and services linked to franchise bids which would require infrastructure support.
But it will not have visibility of the commercial details submitted to the Department for Transport by train operators. Mr Carne said this means it is unlikely to be able to prevent a situation like on the East Coast mainline, where Stagecoach and Virgin Trains are set to hand control of the franchise back earlier than planned due to a failure to hit expected levels of revenue.
The Government has claimed Stagecoach, which owns 90pc of the joint venture, overbid for the contract and while the company has acknowledged th to a degree, it also criticised the “sustained poor performance” of Network Rail for preventing it achieving its aims on the contract.
Mr Carne said in the past, such scrutiny by Network Rail was less important because the country’s rail network had greater capacity.
“But because capacity is now so constrained, if you change one thing it has an impact elsewhere,” he added.
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