The Department announced on Friday 22 June that Stagecoach Midland Rail Limited (a subsidiary of Stagecoach group plc) has been awarded the East Midlands franchise which will begin on 11 November 2007 and will increase capacity, improve performance and begin the introduction of smartcard technology by 2010.

The East Midlands franchise brings together the current Midland Mainline operating out of London St. Pancras and the eastern section of Central Trains. The Department will receive a premium of £133 million over the life of the seven-year, four-month franchise.

A new timetable will be introduced in December 2008. This will support extra capacity, including a new hourly service between Kettering and London and a 9 per cent. increase in peak capacity into and out of London St. Pancras. Punctuality and reliability of 90.4 per cent. has been forecast. Stations will see investment of more than £5 million across the franchise area, including the creation of 1250 more car parking spaces, and 400 more bicycle spaces. More than £20 million will be invested in trains.

The Government will continue to regulate fares for the franchise in line with national policy, currently RPI+1 per cent. As with all franchises, unregulated fares are the responsibility of individual operators. In the East Midlands the new operator has indicated possible average annual rises in unregulated fares of 3.4 per cent. above inflation. A single compensation policy for all passengers will be introduced during replacement rail franchises, commencing with the East Midlands and West Midlands.

With improving Passenger's Charter performance in punctuality and reliability the current discount system means that an increasing number of passengers receive no compensation for delays. Therefore discounts in renewal for season tickets valid between one month and one year in compensation for poor punctuality and reliability will be replaced by compensation based on delays to individual journeys, known as Delay/Repay. Under the new system, all passengers will be entitled to claim compensation for all delays, whatever their cause.

50 per cent. of the price paid for a single-leg journey delayed by between 30 and 59 minutes;

100 per cent. of the price paid for a single-leg journey delayed by between 60 and 119 minutes; and

100 per cent. of the price paid for a return journey delayed by more than 119 minutes.

The changes will also start to standardise disparate compensation arrangements for single, return and weekly season ticket holders on different train operators.