NEGOTIATIONS between the Department for Transport (DfT) and passenger franchise owning groups over termination payments to bring franchises to an end failed to be concluded by January 29, the revised date set for the process to be concluded.
This was already a revision to the December 14 deadline set by the Government.
Currently most franchises are operating on emergency contracts termed either EMAs or ERMAs and, as previously reported, the‘termination sums’are based on the DfT’s calculation of the total losses incurred by each franchise, which would have been payable at the end of the franchise period had Covid-19 not intervened and the contract had run to its conclusion.
Once the payment has been agreed the DfT engages with the owning group to agree terms for a new Direct Award contract which will be put in place as part of the process to move towards concession agreements.