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The Ticket Collector

DfT Rips up GNER Franchise Contract, but………

November 27, 2006 on 2:26 pm | In GNER |

The Department for Transport aka UK Government PLC has agreed to rip up GNER’s £1.3 billion franchise agreement to operate the East Coast main line railway.

The DfTransport has finally decided to re-let the franchise, but as a interim solution, GNER will be allowed to continue to run it for up to two years on a new, fixed-management-contract basis. Talks are under way between the DfT and GNER to agree the terms of the new arrangement. It is expected to run for between 18 and 24 months until a new invitation to tender can be produced and a train operating company selected.

GNER’s former chief executive, admitted the group had overbid. GNER is understood to be perilously close to being in breach of its liquidity ratio, the amount of cash that it is legally required to retain to honour its franchise agreement.

So it seems that we will have to cope with GNER for another year and a half, two years at most.

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