THE NEXT Cross Country franchise is anticipated to begin in February 2020, with operating groups invited to express interest in bidding for the new deal.
The franchise is currently operated by Arriva under a direct award agreement running until October 2019, with an optional extension of up to 13 operating periods. The Department for Transport launched a public consultation on the next franchise in June, which closes on 30 August. DfT expects to confirm a shortlist of bidders in either September or October, with an Invitation to Tender issued to bidders in January 2019. The winning bidder is planned to be announced in October 2019 ahead of the contract start, with the franchise expected to run for between seven and 10 years.
In its prospectus for the new franchise, DfT notes Cross Country has ‘developed into a stable and resilient business that generates a premium for the taxpayer and a healthy return for investors’. DfT explains the franchise has paid a premium since 2011/12, prior to which it received a subsidy, with a £59 million premium paid in 2017/18, although it notes the franchise received revenue support in 2015/16 and 2016/17. The next operator is expected to bear both cost and revenue risk for the duration of the franchise.
While the main challenge is to address ‘the immediate problems of crowding’, DfT says it wants ‘an innovative bidder who can deliver more than this’, highlighting potential to grow the franchise by developing new markets. It says bidders will be encouraged to think creatively about potential new routes, destinations and markets, and says new geographic markets should not be limited to destinations or routes Cross Country has served in the past. In particular, it encourages ‘ideas that focus on long-distance journeys, connecting new cities and regions together, but which do not abstract revenue from other operators’.
The prospectus envisages ‘improved rolling stock and real time performance at key points on the network’, and DfT notes Delay Repay compensation for delays of 15 minutes will be introduced in the next franchise. Particular elements highlighted are the churn of passengers at key stations, which DfT says has ‘resulted in relatively long station dwell times’. It says journeys are currently slowed down by approximately 2,000 minutes each day, equivalent to around seven minutes per train, due either to the churn of passengers or extra pathing time. The issue of interchange at stations is also highlighted, with bidders invited to explore locations other than Birmingham New Street where passengers may change trains.