Train firms seek longer contracts

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The Association of Train Operating Companies (ATOC) wants an overhaul of the current set-up for franchises and an end to "inappropriate micro-management" by civil servants.

Bidders compete to run rail franchises typically lasting around seven years, but ATOC argues longer deals of 15-20 years would encourage more private investment.

The organisation said less prescriptive guidance from Government - down to the number of ticket machines - and longer franchises would give them flexibility to improve passenger services without diverting managers from putting together fresh bids.

But passenger groups also want their voices heard in any changes to the system. Ashwin Kumar, Passenger Focus director, said: "We believe passenger satisfaction targets should be a key part of future franchise contracts as well as a continued focus on improving punctuality."

ATOC wants the Government to give more weight to the quality as well as price in franchise bids, and share more of the risk from an economic downturn. This could be through linking franchise payments to GDP output and beginning revenue support earlier in the franchise.

Train companies have felt the impact of recession in falling passenger growth while National Express - which bid too much for the East Coast Main Line at the height of the boom - is handing it back to the Government.

ATOC chief executive Michael Roberts said the politicians had a "window of opportunity" to improve the system. "The Government can increase the scope for train companies to bring innovation and commercial nous into improving the railways.

"Equally we would keep the existing mechanisms to deal with any company that fails to perform. Terminating a franchise under our proposals would be no more difficult for a longer franchise than a shorter one."

ATOC also wants a mix of smaller and larger franchises to help the UK rail market become more attractive to bidders than a market dominated by bigger franchises. It claims it could save up to £500 million in taking on more responsibility for station and depot overhauls from Network Rail.