The DfT this week approved an extension of the Northern Rail franchise by seven months to April 2014, paving the way for the possible devolution of the next franchise.
Metro director general Kieran Preston updated West Yorkshire Integrated Transport Authority’s executive board on the devolution proposals last month.
He said initial analysis had demonstrated advantages of combining the Northern and TransPennine franchises into a single franchise. “There are options for mapping some services either into or out of the new franchise,” he added.
Services would be managed by a new body, dubbed Rail in the North of England (RINE). The body would have to be democratically accountable, said Preston. “As well as the Northern ITAs/PTEs working together, it will also be necessary to find a suitable mechanism for involving those authorities outside ITA areas in an appropriate manner,” he added.
The financial settlement will be crucial to whether ITAs accept devolution. Northern has an annual operating cost of £534m, of which 50% is subsidy. TransPennine’s operating costs are £204m, of which 40% is subsidy.
The Government is expected to devolve a block grant to meet the costs of the current services plus an amount to meet passenger growth forecasts and replace life-expired rolling stock. But the DfT will also be seeking efficiency savings and the transfer of risk.
Legal issues also have to be resolved. “A key issue is the ability of PTEs to secure rail services outside the current legal limit of their geographic boundary of +25 miles,” said Preston.
A prequalification notice to franchise bidders is likely to be issued in December, with a formal invitation to tender next May. The franchise(s) should be awarded in December 2013.
LTT’s ‘Devolving rail to the regions’ event takes place on 17 May in Manchester.
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