DfT forced to disclose Trans Pennine franchise premiums

The DfT has acceded to a FOI (freedom of information request) to disclose premium payments for the new TransPennine Express (TPE) franchise.

The nine year franchise comes into force on 1 April with FirstGroup taking full control. (The existing franchise has been a 55:45 FirstGroup: Keolis joint venture since February 2004).

The total TPE premium will be £763.4m in nominal (unadjusted) terms or £620.7m at 2015/16 prices. This is considerably higher than the “around £400m” quoted by Transport Secretary Patrick McCloughlin in his statement on 9 December 2015. (TPE has been subsidised to date).

In the same statement Mcloughlin also said the subsidy paid to the new Northern rail franchise would be reduced by “around £140m” over its nine year franchise period. In fact, a written reply to a parliamentary question on 11 January disclosed the expected reduction will be £20m higher at £160m.

Arriva takes control of the new Northern franchise from Serco-Abellio (a 50:50 joint venture), also from 1 April.

Subsidy/(premium) profiles for both franchises:

         TransPennine Express                    Northern
Year Nominal (£m) Real Prices – 2015/16 (£m) Nominal (£m) Real Prices – 2015/16 (£m)
1 2016/17      4.9      4.8 281 275
2 2017/18     (6.8)     (6.4) 276 262
3 2018/19   (20.3)   (18.6) 282 260
4 2019/20   (51.7)   (46.1) 247 221
5 2020/21   (98.7)   (85.3) 204 177
6 2021/22 (111.3)   (93.2) 158 134
7 2022/23 (143.5) (116.5) 136 113
8 2023/24 (157.1) (123.4) 114   92
9 2024/25 (178.9) (136.0)   92   73
Totals   (763.4) (620.7) 1,790 1,607

 

 

692.C/Mar16

 

 

 

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