Private bidders losing interest in UK rail franchises

12th Feb 2016
Private bidders losing interest in UK rail franchises

Taxpayers in the United Kingdom could end up footing the bill for rail services as private sector firms spurn the opportunity to run services, an influential committee has warned.

Members of the committee of public accounts argued a lack of competition between companies bidding to operate routes could mean the government struggles to get value for money.

“Uncertainty about infrastructure work has resulted in delays to franchise competitions and the Department of Transport will have to rely on potentially expensive changes to franchises during the life of contracts,” warned the committee.

The report urged ministers to develop an alternative commercial strategy.

Such a strategy would be used if competition for franchises continues to fall and suggested looking at other markets where competition is low, such as energy.


The report revealed the first five franchises to be made available after the government’s bidding programme was restarted in 2013 attracted three bids each.

This compared with an average of four for the previous ten rounds of bidding.

The committee of public accounts also noted that the Department for Transport - which is responsible for awarding rail franchises in England and Wales to private sector companies - requires at least three bids per franchise to “create competitive tension”.


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