The problem is, no matter how long you make the franchise, you still end up with a number of years at the end of the franchise where the TOC has no incentive to invest because they might not get the franchise renewed. I don't know what the solution to that is, but I think that IF we are to continue franchising, we do need to find a way of solving it.
Indeed, and there could be ways of making it work but it would be a change from the current system.
Something which I've suggested in the past is that there's government owned (or funded) rolling stock and franchises put in bids to use it. This could be used to increase capacity or for new routes. However it would be on a profit sharing basis, so that the TOC would get a (relatively) small share of the income until they had effectively paid the lease costs.
As an example the TOC would pay 50% of all extra income for the first £400,000/coach (where lease costs are typically £125,000/coach) and then a further 20% for all income there after.
That would mean that TOC's would be able to get rolling stock when it's marginal as to whether it's worth doing (such as in the latter years of a franchise) whilst if the income is significant then they pay over the odds for doing so.
Yes there'll be TOC who do well out of it and there'll be times when the government will be providing extra subsidy, however it should allow TOC's to make improvements more easily.
You may well need to provide a stick, such as penalties for overcrowd trains where there's not been a request made for the required improvement(s) to facilitate extra capacity. Such requests are initially reviewed by Network Rail to determine if there's another option and then recommendations are made on it. I'd suggest that this is done on the upto 10 busiest services run by a TOC which are at above 110% of capacity.
For instance if there's a problem with capacity on a line with no spare paths then the following options could be put forward:
- platform lengthening
- Automatic Selective Door Opening
- new grade separated junction at a pinch point
- repathing of services to reduce pressure on the busy section of line
- highlight how new national infrastructure project (such as HS2 or Crossrail 2) would release capacity for more services
Network Rail can then review and recommend that; some, none or all of them would be viable options and what other services would benefit (i.e. for Crossrail 2 they would be able to list almost any SWR which needed improvements as well as many others).
This would mean that major projects would be recognised for the "other" things that they would do (for instance longer trains in and around Manchester Piccadilly for HS2) and could being to the table projects which Network Rail/Government haven't considered.
