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East Coast Railway Line

Volume 496: debated on Thursday 16 July 2009

To ask the Minister of State, Department for Transport what the administrative and legal costs to the public purse of the franchising process were on each occasion when the East Coast Main Line franchise was let. (286722)

[holding answer 14 July 2009]: The costs to the Department for Transport for undertaking the re-franchising of the Inter City East Coast (ICEC) franchise in 2007 were £1,260,000 of which legal costs were £168,000. These costs were recovered from Sea Containers, Great North Eastern Railway's (GNER) parent company, under an agreement made between the Department and Sea Containers prior to GNER handing back the East Coast franchise.

The previous re-franchising in 2005 was undertaken by the Strategic Rail Authority, in the normal course of business, at the end of GNER's franchise term at an additional cost of £2,362,000 of which legal costs were £408,000.

The costs incurred by the Office of Passenger Rail Franchising in the original letting of the franchise in 1996 and the extension of the franchise in 2003 by the Strategic Rail Authority could be provided only at disproportionate cost.

The costs of any re-franchising prior to the end of the full term of the current franchise are recoverable from a performance bond that will fall due under the current franchise agreement.