Jonathan Reynolds – 2015 Parliamentary Question to the Department for Transport

The below Parliamentary question was asked by Jonathan Reynolds on 2015-12-16.

To ask the Secretary of State for Transport, what contingency plans his Department has for the funding of the new Northern and TransPennine franchises in the event that projected passenger number increases are not achieved.

Andrew Jones

Revenue risk for these two franchises lies with the franchisee, not the Department. This means the Department is not responsible for covering any shortfall in farebox revenue compared to the successful bidders’ expectations.

The successful bids are backed by significant parent company support which can be called upon in life to ensure the liquidity ratios are met. Also both franchises were subjected to a financial robustness test as part of the bid evaluation process and considered low risk for the Department.