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Franchise bidders should focus on operations, says rail report

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RAIL NETWORK operations should be kept separate from plans for new infrastructure when train operating companies bid for franchises, a new report into rail investment claimed this week.

The report, produced by consultant PriceWaterhouseCoopers, says the bidding process should focus only on the short term operational needs of franchises as the complexity of accurately pricing future investment makes the current process unrealistic.

'With infrastructure projects taking up to five years to develop, value for money may often not be achieved if they are included in franchise replacement or extension bids which have been prepared in the space of a few months, ' says the report.

Bidders, it adds, should only have to show that they have the project management capability to procure long term upgrades.

Operators would then take the lead in specifying upgrades, working closely with Railtrack and the Strategic Rail Authority (SRA) in open book discussions once they had won the franchise.

'Better value will be achieved if infrastructure projects are tendered by incumbent train operating companies when output requirements and the availability of public funding are clear, ' the report explains.

The SRA is urged in the report to clarify its investment priorities for each franchise.

'A lack of guidance from the SRA on affordability of schemes means it is difficult for bidders to know which projects should be included in their bids and at which level of commitment, ' it says.

INFOPLUS Upgrading the Rail Network - Focusing on Delivery. Call PWC on (020) 7804 5940 for a copy.

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