Franchises should typically be awarded for seven to ten years, says Brown, though operators should have the opportunity to have their franchise extended.
The DfT had been planning to award the West Coast and Great Western franchises for 15-year terms but Brown says deals this long “are not sensible for the majority of franchises”. The uncertainty of forecasting revenues greatly increases over time, he points out, and bidders respond to this uncertainty by seeking higher profit...
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