Post by wirewiper on Sept 25, 2020 15:57:07 GMT
After 24 years since it was introduced in 1996, rail franchising is to end.
All franchises were suspended from 23rd March and converted to management contracts, as the Government took action at the start of lockdown.
From 21st September, franchising was replaced by Emergency Recovery Management Agreements (ERMAs) in which existing operators will be set performance targets and requirements, in return for being paid a management fee which will be set at no more than 1.5% of the operator's total cost base prior to the pandemic. Operators now have until mid-December 2020 to agree with the Government to terminate their previous franchise agreements - they can refuse, but if they do this they will lose access to pandemic financial support. So effectively they don't have a choice, and it is simply a matter of negotiating the financials.
Going forward, the Department of Transport will discuss with operators a transition to new longer-term directly awarded contracts, to replace the ERMAs.
All franchises were suspended from 23rd March and converted to management contracts, as the Government took action at the start of lockdown.
From 21st September, franchising was replaced by Emergency Recovery Management Agreements (ERMAs) in which existing operators will be set performance targets and requirements, in return for being paid a management fee which will be set at no more than 1.5% of the operator's total cost base prior to the pandemic. Operators now have until mid-December 2020 to agree with the Government to terminate their previous franchise agreements - they can refuse, but if they do this they will lose access to pandemic financial support. So effectively they don't have a choice, and it is simply a matter of negotiating the financials.
Going forward, the Department of Transport will discuss with operators a transition to new longer-term directly awarded contracts, to replace the ERMAs.
