The Government could take over the struggling Northern rail franchise or allow its existing operator to continue under a new contract, MPs have heard.
Appearing before the Commons Transport Committee on Wednesday, transport secretary Grant Shapps said: ‘You may have seen recent speculation in the press about the sustainability of the Northern franchise.
‘I can tell the committee that I have already actually issued a request for proposals from both Arriva and operator of last resort because I consider that it cannot continue delivering in the current delivery method. And we know the financial pressures that have been talked about in recent speculation.’
He added: ‘That’s the first phase of either going to a direct award or an operator of last resort, and as you will know I can’t go further in terms of commenting because of commercial sensitivity and because it’s a proper process to go through but a request for proposals is to kick that process off.
‘I entirely believe that things cannot carry on. As a fellow long-suffering commuter, I entirely believe we cannot carry on just thinking it’s ok for trains not to arrive or Sunday services not to be in place and so forth, so that has to change.'
The process described by Mr Shapps could see current operator Arriva given a short-term management contract or the Government stepping in as an operator of last resort.
Northern managing director David Brown said: ‘It’s on record that the Northern franchise has faced several material and unprecedented challenges in the past couple of years, outside the direct control of Northern. The most significant of these is the ongoing, late delivery of major infrastructure upgrades.
‘These factors – alongside the damage caused by strike action and lower than expected economic growth – have had a significant effect on the revenue expected in our original franchise business plan agreed with government back in 2015.
'That’s why the Government has asked us to prepare a business plan for a shorter “Direct Award”. We are well underway with the development of that plan, which will see the completion of our transformation programme.’
Asked about Northern’s failure to phase out the notorious Pacer trains, Mr Shapps said: ‘I’m hugely impatient about it and every time I hear of delays to their extinction I’m immediately on top of it.’
He added: ‘And by the way, I’m also hugely concerned about the idea that we could still have new partially diesel run trains up to 2040. When I look at my comments on cars, where at the moment the policy is 2040 to end the sale of petrol and diesel, but I recently said that I’m going to investigate 2035, I also am of course interested in the earlier extinction of diesel trains.’