IT HAS TAKEN the Labour government 31 months since the May 1997 election to reach the point where a serious effort can start to alter the uniquely complex structure created when British Rail was privatised by the Conservatives in 1992-97. The first three passenger franchises chosen for ’replacement’ were revealed on November 24 by Franchising Director Mike Grant, who doubles as Chief Executive of the Shadow Strategic Rail Authority pending legislation to merge these positions.

The chosen InterCity East Coast, Network South Central and Chiltern Railway franchises expire between April and July 2003. No fewer than 12 of the 25 franchises end on April 1 2004, and only seven extend beyond the end of that year. The objective of SSRA Chairman Sir Alastair Morton is to secure voluntary termination of most, if not all, of the 18 short franchises by offering the holders an opportunity to bid for a franchise lasting up to 20 years. In return, he wants commitments to invest not just in rolling stock, but also in infrastructure (RG 12.99 p791).

Prequalification for the first three closed on December 6, and those accepted have 60 days to submit their proposals. It is, to say the least, a most unusual bidding process. Anyone can apply, regardless of whether or not they already hold a franchise, and there is no specification beyond such laudable aims as ’better performance’ and ’new infrastructure’. New services to areas not currently served can be proposed, while Sir Alastair has spoken of changing the geography with fewer franchises. This clearly implies bidding simultaneously for franchises that are, and are not, on offer at any particular moment.

Worse still, the incumbent cannot be forced to surrender his franchise early. On December 14 Virgin Group Chairman Richard Branson confirmed to Railway Gazette his intention to bid for ICEC, despite what he called ’a very strange process - the SRA ought to wait until the franchise runs out.’ Branson said his bid would have to include úXm, this being the sum which he calculates James Sherwood of Sea Containers would accept to surrender voluntarily the last three years of a profitable franchise. But if Grant finds Virgin’s offer the more attractive, will Sherwood really hand over the keys for úXm - or demand three times as much? We shall see.

On December 8 Grant released desirable criteria for up to four more ’franchise areas, which may not necessarily be based on the existing franchise map’, to be offered by March. Clearly targeted at commuter and other bottlenecks where investment is needed, the list also included ’serving the interests of Wales and the North West more effectively’ - a signal, perhaps, that Sir Alastair would like to see the troubled Wales & West, Cardiff Railway and North Western franchises under new management.