THE DfT has begun to prepare for 10 direct awards, and has extended the deadline negotiations with TOCs over termination sums until the end of January.
If the termination sum cannot be agreed with a TOC, the DfT has the right to terminate that Emergency Recovery Management Agreement (ERMA) early, with the TOC reverting to its pre-existing franchise terms almost immediately.
New contract
If termination sums are agreed, the DfT will negotiate a new direct award contract under which the TOC would deliver services following the end of the ERMA.
The DfT also needs to be mindful of avoiding a situation where multiple operators collapse because negotiations fail, thus leading to the transfer of several former franchises to the DfT’s Operator of Last Resort.