Select Committee on Transport Written Evidence

Annex B


  An agreement was entered into between the Franchising Director appointed under Section 1 of the Railways Act 1993 and Porterbrook on 4 May, 1995.

  The OPRAF/ROSCO Agreement relates to Rolling Stock acquired by Porterbrook on privatisation of the railway. It provides similar comfort to the Franchising Director as the Direct Agreements save in relation not to new trains but to pre-privatisation stock.

  The agreement requires Porterbrook to notify the Franchising Director as soon as it proposes to serve a notice of default on any TOC in relation to any Extended Lease. Porterbrook agrees not to terminate any Lease for a period of at least 14 days following notification to the Franchising Director without the Franchising Director's prior written consent. Unless the Franchising Director gives consent within one day after the date of receipt of Porterbrook's notice, the Franchising Director shall indemnify Porterbrook in respect of any liabilities accruing or arising under such a Lease during the period from the date of notification to the Franchising Director to the expiry of 14 days or, if Porterbrook agrees not to terminate the relevant Lease by reason of a default in relation to which Porterbrook has been provided with assurances on terms satisfactory to it that such default would be cured as soon as reasonably practicable, the date on which it has agreed such default will be cured.

  If the Franchising Director procures that any default by a TOC is cured within the relevant 14 day period or provides assurances on terms satisfactory to Porterbrook that such default will be cured as soon as reasonably practicable then Porterbrook has agreed that it will not terminate the relevant Lease by reason of such default unless the default is not cured within the agreed period.

  Porterbrook also grants the Franchising Director the option, where Porterbrook is permitted and does proceed with the termination of a Lease, to require Porterbrook to grant a new lease to the Franchising Director (or a company wholly-owned by the Franchising Director) of the Rolling Stock previously the subject of the terminated Lease on the same terms as the terminated Lease at the date of termination. The new lease shall commence on the date of the termination of the terminated Lease and shall itself terminate on:

    (i)  the date of the next timetable change applicable to the British Railways Industry which falls at least 12 months after the date of termination of the terminated Lease; or

    (ii)  if earlier, the date on which the terminated Lease would have expired by effluxion of time; or

    (iii)  such other date as the Franchising Director and Porterbrook may agree.

  The Franchising Director also has the option to extend a new lease scheduled to expire on the date of a timetable change.

  If the Franchising Director serves a notice on Porterbrook that it is terminating a TOC's franchise agreement, Porterbrook has agreed that it will, at the request of the Franchising Director, terminate the Leases of that TOC in accordance with the terms of such Leases. In turn, the Franchising Director, as a condition of termination of such Leases, has agreed to take on the Leases (either himself or through a company wholly-owned by himself) of the relevant Rolling Stock on the same terms as the terminated Leases at the date of termination. Such new leases shall terminate as set out in the previous paragraph.

  Porterbrook has agreed with the Franchising Director that it will not, inter alia, permit any security interest to exist over its rights under the Leases without the consent of the Franchising Director or unless the beneficiary of such security shall have entered into a Deed of Accession in the form set out in the OPRAF/ROSCO Agreement which provides that such security holder will be bound by and entitled to the benefit of provisions equivalent to those contained in the OPRAF/ROSCO Agreement. The Security Trustee will enter into a Deed of Accession as set out above on the Closing Date.

  The OPRAF/ROSCO Agreement is governed by English law.

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