The Welsh government, which has placed the Wales and Borders franchise under public control as the operator of the charging resort (OLR), has attracted a lot of media attention in recent weeks, with political statements for and against such a move. Here, Rhiannon Holtham wonders if this decision can set a new precedent. In March 2020, an initial short-term agreement worth $40 million was confirmed to support the rail system during the March closure due to the COVID 19 pandemic. On 31 May 2020, an emergency agreement was approved to support KeolisAmey Wales; she explained in detail that the Welsh government has announced that it will spend up to $65 million over the next six months to ensure that trains continue to run on the franchise.  At this time, it is difficult to assume the method that the UK government will use for rail services when the ERMA ends in accordance with the corresponding franchising agreements until further details are known. Until the coronavirus pandemic, most train operating companies (OCDs) in England held leased franchises by the Department of Transport through a tendering system. Franchises are intended to offer services on certain routes for a fixed period of time. Defines Wales franchise agreements and borders for financing, specifications and service management and the exercise of service obligations as a last resort. The expected profit margin for the electrification of Valley Lines is not affected by the operating changes in the franchise. A new public subsidiary of Transport for Wales will take over the daily rail transport from February 2021. The new agreement will also include a new partnership with existing franchise partners, Keolis and Amey.
There will be a new funding and operating model, details of which are being developed. ERMAs have a maximum duration of 18 months until March 2022 and must terminate the expiry of the current deductibles at the expiry of these contracts. In a statement, the First Group said the Department of Transport intended to “start discussions with railways on the transition to new contracts directly awarded for longer terms that would come into effect at the end of the ERMA.” At this time, it is not clear what a “direct market” will entail. The Railways Act 2005 also stipulates that the Welsh Government must be a part or co-signer of the franchise agreement for any franchised company with a purely Welsh service. So it may not be a big step forward for the Welsh government to take the rest from the franchise if things go wrong, and there is an alternative and practical opportunity to provide the services. New vehicles in the Wales-Border franchise, including new tram and trimodi trains, which can pass for the metro between electric, diesel and battery mode, are on order. Funding for the new roll was taken over by Keolis, a contractual agreement that is being maintained.