PARLIAMENTARY WRITTEN QUESTION
Railways: North of England (16 December 2015)

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.

Asked by:
Jonathan Reynolds (Labour)

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.

Answered by:
Andrew Jones (Conservative)
5 January 2016