The tendering of the new East Coast Franchise, to begin in 2015, has sparked much discussion and debate about how rail services should be run in the UK. Since 2009 when operator National Express 'handed back the keys' on the East Coast route due to financial difficulties it has been run by the government- under the banner of Directly Operated Railways (DOR).
This is all very well, however it totally undermines the whole idea of a privatised railway. I do not subscribe to the camp that Britain's railways should be re-nationalised. It is clear without doubt that private enterprise has done wonders for rail travel in this country- we have new fleets of trains, competition and one of the very best rail networks in the world.
So to the East Coast franchise- should it be tendered back out to a private operator, and what should happen to DOR?
In my view the answer is simple- Yes, the route should be tendered out as a franchise BUT the government (under DOR) should bid to run it.
This isn't quite as stupid as it first sounds and is a model which is used in many other parts of Europe where national rail networks have been opened up to competition under EU laws. Competition in Germany is shaking up the railways in a big way- local authorities are tendering out rail routes to interested bidders- if Deutsche Bahn (DB) want to continue to run the tendered services they must simply put in a competitive bid just like any other perspective operator. This is good for competition, and good for the traveling public as it ensures the best deal is achieved for the rail network- no longer can DB rest on their laurels as the only option to provide rail services.
Could this work in the UK? I don't see why not. If the private bidders can forecast a profit from running East Coast then so can DOR. If there are cost savings through the operator being government run and not paying out to shareholders then these can be factored in also- if this enables DOR to put together a cheaper, more competitive bid then great. If DOR can win the franchise through competitive tender then it should continue to run trains on the East Coast Route.
Clearly at this stage in the process this will not happen. The tender process is now too advanced for a government backed bidder to enter the process- there would also be issues regarding conflict of interest which would need to be resolved before the Department for Transport could award a contract to another government body. But maybe, in the future, this model could be used to bring a new level of competition to the railways of the UK.