Wednesday, 19 January 2011

Today's franchises are a Curate's Egg - Official

So. Welcome to the new world of Franchising!

This from the DfT's Reforming Rail Franchising: Government response to consultation and policy statement, published today:

2.4 It was pointed out that the present arrangement of 7-10 year franchises has established a highly competitive market, delivering increasing financial returns to the Government.

3.2 The consultation acknowledged that the “Cap and Collar” mechanism used on many existing franchises has produced perverse outcomes, as well as significant financial liabilities for the Government.

Can both these statements be true?

UPDATE: This from Travelling_Wolf, via Twitter...


High returns are consistent with high liabilities.