RAIL FRANCHISES

That this House notes with concern the decision taken by First Great Western not to extend its franchise beyond March 2013; further notes that of the 1.13 billion of premiums which FirstGroup undertook to repay to the Government as part of its franchise agreement, 826 million was due to be paid in the three years after this date and that this money will not now be paid; believes that this case highlights the inadequacies of the current franchising system; expresses concern that any new franchise agreement on the line will likely lead to smaller premiums paid in the three years from March 2013; further believes that this demonstrates that franchise agreements currently work in the interests of train operating companies; and urges the Government to fundamentally reform the nature of franchise agreements so that they operate in favour of passengers and block companies which it believes not to be acting in the public interest from bidding for future franchises.