The inquiry will seek to establish whether the Department for Transport's (DfT) approach to rail franchising, which was revised in the wake of the botched Inter-City West Coast (ICWC) procurement in 2013, is achieving its objectives of transferring financial risk to the private sector, promoting competition, and improving services.
Resources within the DfT's franchising team will come under the spotlight and the inquiry will consider whether the department has the capacity and capability to cope with an increase in franchising activity this year and next year. The cost of bidding and its impact on market entry, and options for encouraging new entrants into the market, will also be evaluated and the inquiry will consider the relationship between franchises and Network Rail, particularly around managing the effects of infrastructure works on services.
The East Anglia franchise, which is currently being tendered, will be examined as a case study.
The inquiry is being held in the wake of two key reports on the franchising system. In February a report by the Public Accounts Committee warned the franchising system could be exposed to significant risks if market interest in bidding for contracts declines any further, while the following month a franchising system could be exposed to significant risks (CMA) called for greater on-rail competition, suggesting that moving towards a system of multiple licensed operators could offer an alternative to franchising.
Written submissions can be made via the parliamentary website and the deadline for contributions is Friday June 3.