Select Committee on Transport Fourth Report


4. Franchise Payments

50. Mr Mulligan, the Director General of the Greater Manchester Passenger Transport Executive (PTE) told us that, without investment "we shall be paying enormous amounts of subsidy over the next 10, 15 or 20 years to perpetuate the system which is simply not working."[55] In the 12 months to March 2002 Northern franchises received the following net payments:

Table 1: Payments to Northern Train Operating Companies
Franchise £000
Arriva Trains Merseyside £6,320
Arriva Trains Northern £115,197
First North Western£86,586
Virgin Cross Country£118,510*
Virgin West Coast£190,906*
Total£517,519

Data Source: SRA Annual Report, 2001-02, p107. * Services not confined to the north.[56]

51. In addition the following payments were made by PTEs:

Table 2: Payments by PTEs to Northern Train Operating Companies
FranchiseArea £000
Arriva Trains Merseyside Mersey Travel*£71,639
Arriva Trains Northern Greater Manchester£4,989
West Yorkshire£48,239
South Yorkshire*£26,204
Nexus (Tyne and Wear)* £6,978
First North WesternGreater Manchester £67,509
West Yorkshire£2,702
Mersey Travel*£16,522
Total £244,781

Data source: SRA Annual Report 2001-02, p 107-8

*Indicates that the PTE retains revenue risk and pay gross operating costs less revenue. Amounts shown are gross costs before revenue.

52. These are huge sums. Even allowing for the exclusion of revenue from some of the PTE figures, well over half a billion pounds per year goes into the revenue support for rail services connected with the North of England, at least £1.5 million per day. Increases in infrastructure capacity would themselves have costs, but they are likely to enable increases in rail use. Not only is this desirable for social grounds; it may also lead to reduction in the revenue subsidies required.


55   Q 128 Back

56   GNER made payments rather than receiving them. Back


 
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