In response to the coronavirus pandemic, the UK government took emergency measures on 23 March 2020, suspending all passenger train franchise agreements for a period of six months.   The number of passengers had already decreased by 70% at that time, which led to a significant drop in the revenues of operating companies that responded by removing and reconfiguring services.  The government agreed with the companies that passengers holding pre-sale tickets could be fully refunded.  “Although there may be no more keys today, the future course will depend on dfT`s financial discussions,” the source told Rail Business UK. “The industry signed the MROs based on the DfT adage `Trust us` and there`s not much trust right now. These negotiations will be difficult; Every three months we have time to try to clarify the financial details. That people are willing to pay the price of switching to franchise agreements and return the keys is a win-win situation for DfT. The best way to proceed was to sign the MROs and hope that dfT would act in a trustworthy manner. It will be a strong business discussion, and it has the potential to be painful. The main costs incurred by franchisees are railway access charges (paid to Network Rail); Other significant costs are borne by staff, leasing stations (NR) and rolling stock (ROSCOs). Franchisees also pay for ease of inventory maintenance, with hard work under the ROSCO lease agreement. The main source of income is that of tariffs which are supplemented by the deductible in the event of a deficit. In addition, franchisees can sublet business units directly to leased stations.  The government has signed new agreements with Govia and FirstGroup, which will protect jobs during the outbreak of the coronavirus.
Rail services will allow those who cannot work from home to get to work and maintain important services in service. In the broader context of the controversy over Railtrack`s inability to improve the West Coast Main Line, the SRA has come under fire for failing to move cross country and West Coast franchises from subsidized franchises to premium paid franchises. This was provided for in the first 15-year franchise agreement, from 1997 to 2012; But it depended on the fact that Railtrack delivered the upgrade on time. Instead, the delays meant that the contracts had to be renegotiated at an early stage as management contracts and that they were subsidized for several years, until they were leased again, which was seen as a cost to the government and added millions to the billions in expenses incurred on top of the upgrade itself.    The PIN sets a timetable for the proposed direct award contracts, of varying duration to allow for a phased transfer to new concession agreements, in line with Williams Review`s proposals. Any contract would involve an optional extension at the discretion of the Secretary of State for Transport, meaning that the proposed deadlines could range from 18 months to 6 years. The DfT says these agreements will go outside of previously announced emergency measures agreements, allowing the government to temporarily cover both revenues and costs related to individual franchises. The amounts are based on the financial status of each franchise before the pandemic and the DfT`s assessment of its non-pandemic evolution. The evaluations will take into account the mechanisms for modifying the franchise agreement and some other contributions from the ToCs. .
. . .