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Rail Fares and Franchises

On the first point, we would want to be sure that what we were getting from the business not only covered the administrative costs associated with refranchising, which is the primary purpose of the bond, but recognised that the taxpayer would not be getting the benefit of a premium payment, which they might have got had the franchise continued for longer. We would have to assess how much that came to and build it into the franchise. Of course, there is a cost associated with asking the bidders to do that. On the anticipation that operators might invest more money, I understand that there are concerns among operators about whether they will realise the benefits of investing in stations, for example, during the life of the franchise they hold or whether those benefits will accrue to the operator that takes on the franchise afterwards.