SPICe AMENDED SCOTRAIL FRANCHISE briefing

ALAN REHFISCH 23 July 2008

This briefing outlines the changes to the Scottish passenger rail (ScotRail) 08/38 franchise agreement. This is the key document governing the provision of passenger rail services in , which were announced by the on 3 April 2008.

Scottish Parliament Information Centre (SPICe) Briefings are compiled for the benefit of the Members of the Parliament and their personal staff. Authors are available to discuss the contents of these papers with MSPs and their staff who should contact Alan Rehfisch on extension 85158 or email [email protected]. Members of the public or external organisations may comment on this briefing by emailing us at [email protected]. However, researchers are unable to enter into personal discussion in relation to SPICe Briefing Papers. If you have any general questions about the work of the Parliament you can email the Parliament’s Public Information Service at [email protected].

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1 CONTENTS

KEY POINTS ...... 3

INTRODUCTION ...... 4

BACKGROUND...... 4

THE SCOTTISH PASSENGER RAIL FRANCHISE (SCOTRAIL) ...... 4

LEGISLATIVE BASIS FOR PASSENGER RAIL FRANCHISING ...... 4

THE AMENDED SCOTRAIL FRANCHISE...... 5

ANNUAL FRANCHISE PAYMENTS ...... 5 TARGET REVENUE FIGURES, REVENUE SHARE AND REVENUE SUPPORT ...... 6 PRICED OPTIONS ...... 7 NEW COMMITTED OBLIGATION...... 7 EXTENSION CRITERIA...... 7 PROFIT SHARE ...... 10 LONG FORM REPORTING...... 10 MAJOR PROJECTS ...... 10 COMMONWEALTH GAMES...... 11 FARES FROM NEW STATIONS ...... 11 ADDED VALUE ...... 11 EXTENSION TRIAL PERIOD...... 11 SCOTTISH MINISTERS POLICY AND SPECIFIC INITIATIVES ...... 12 SOURCES ...... 12

APPENDIX 1: LIST OF PRICED OPTIONS ...... 13

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KEY POINTS

• The current ScotRail franchise was awarded to First Group by the Strategic Rail Authority, acting on behalf of the previous Scottish Executive, and the then Strathclyde Passenger Transport Executive on 20 August 2008

• The current ScotRail franchise began on 17 October 2004 and was due to run until October 2011, with the option of a three year extension

• The current Scottish Government announced on 3 April 2008 that it intended to extend First Group’s tenure as ScotRail franchisee by three years

• The amended franchise places new performance requirements on First Group, revises certain financial aspects of the franchise and establishes a new profit sharing mechanism

• The new financial arrangements set out in the amended franchise agreement are backdated, i.e. they are deemed to have come into force on 1 April 2007. The revised performance benchmarks came into force on 1 April 2008 and the remaining terms came into force when the agreement was signed

• The extension of the franchise is conditional up until 1 October 2009. During the period up until 1 October 2009, Scottish Ministers may choose to end the franchise at the initial expiry date if First Group fail to meet certain performance standards

• The Scottish Government decided to extend the franchise without consulting the Scottish Parliament, railway trade unions and passenger groups

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INTRODUCTION

This briefing provides a short background to the history of rail franchising in the UK and of the ScotRail franchise. It goes on to examine the changes made to the current Scottish Passenger Rail (ScotRail) franchise, which has recently been extended, and is held by First Group.

BACKGROUND

The current privatised railway system was established by the Railways Act 1993 (c.43) as amended by the Transport Act 2000 (c.38) and the Railways Act 2005 (c.14).

The vast majority of passenger train services in the UK are provided by franchised passenger Train Operating Companies (TOCs), i.e. companies which have been granted a ‘franchise’ to provide passenger rail services by the Department for Transport (DfT) or for Scottish rail services the Scottish Executive. The granting of franchises was previously carried out by the Strategic Rail Authority (SRA), which was wound up following the passage of the Railways Act 2005.

26 franchised TOCs were created when was privatised, although this has slowly been reduced by the UK Government to the current 20. Each franchise, i.e. a concession to operate trains on designated lines or geographic areas for a fixed period of time, was awarded to the bidder that provided the Government with the greatest return or required the least amount of subsidy to operate an agreed level of service. The SRA applied additional quality related criteria in awarding the second round of UK rail franchises.

THE SCOTTISH PASSENGER RAIL FRANCHISE (SCOTRAIL) The ScotRail franchise was the last of British Rail’s passenger TOCs to be privatised on 1 April 1997, and is currently the largest franchise in terms of route-kilometres, number of trains run and stations operated. The original ScotRail franchise was awarded to the Group. ScotRail provides approximately 95% of passenger train services in Scotland plus the overnight Anglo-Scottish Caledonian Sleepers linking , , , and Fort William with . The remaining 5% of rail services in Scotland are long distance cross-border trains provided by National Express East Coast on the , on the , Trains on the inter-regional CrossCountry network and First Group on Transpennine Express linking Edinburgh and Glasgow with Manchester airport.

The current ScotRail franchise was awarded to Aberdeen based First Group on 20 August 2004 and was due to run from 17 October 2004 until October 2011, with an option for a three year extension. This option was exercised by the Scottish Government, subject to conditions, on 2 April 2008.

LEGISLATIVE BASIS FOR PASSENGER RAIL FRANCHISING The system of rail franchising was established by the then Conservative UK Government under the Railways Act 1993. The 1993 Act, as amended, requires the franchising authority (in Scotland this is now the Scottish Government) from time to time to hold an open competition for the award of a franchise to provide designated Scottish passenger rail services.

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THE AMENDED SCOTRAIL FRANCHISE

Scottish Ministers and First Group signed an agreement on 2 April 2008 to extend First Group’s tenure as ScotRail franchise holder from the initial franchise expiry date of 15 October 2011 until November 2014. The new financial arrangements set out in the amended franchise agreement are backdated, i.e. they are deemed to have come into force on 1 April 2007. The revised performance benchmarks came into force on 1 April 2008 and the remaining terms came into force when the agreement was signed.

ANNUAL FRANCHISE PAYMENTS

Despite the changes outlined in the amended franchise agreement, the document clearly states that the results are “revenue neutral” for the Scottish Government, i.e. the Scottish Government will pay the same amount to First Group annually as it would have under the original franchise agreement. This is achieved by changing the formula used to calculate the annual franchise payment. To understand the change to this formula it is important to be aware of the following acronyms:

• AFP: Annual Franchise Payment made by the Scottish Government to First Group for the provision of ScotRail services. • RPI: Retail Prices Index for the January of the year preceding the franchise year, e.g. RPI for franchise year 2006/2007 would be the RPI figure for January 2006. • FXD: Costs incurred by First Group that have been fixed for the length of the franchise agreement. • VCRPI: Variable costs incurred by First Group. This figure is indexed at the RPI figure each year. • PRPI: First Group profit from the ScotRail franchise. This figure is indexed at the RPI figure each year. • TRRPI: Total revenue collected by First Group. This figure is indexed at the RPI each year. • FRPI: This is a new term introduced in the amended franchise agreement, which is equal to the increase in the total revenue figure (TRRPI).

The original franchise agreement set out the formula for the calculation of Annual Franchise Payments (AFP) as follows:

AFP = FXD + (VCRPI x RPI) + (PRPI x RPI) – (TRRPI x RPI), i.e. Annual Franchise Payments = Fixed costs + variable costs indexed at RPI + First Group profit indexed at RPI – total revenue indexed at RPI

The amended franchise agreement changed the formula as follows:

AFP = FXD + (VCRPI x RPI) + (PRPI x RPI) + (FRPI x RPI) – (TRRPI x RPI), i.e. Annual Franchise Payments = Fixed costs + variable costs indexed at RPI + First Group profit indexed at RPI + increase in total revenue figure indexed at RPI – total revenue indexed at RPI.

The Scottish Government makes franchise payments to First Group every 28 days, each 28 day period is known as a ‘reporting period’, throughout each franchise year. These payments are calculated using a different formula to that used for the annual franchise payment. However, the total amount paid to First Group in any one franchise year is calculated using the formula explained above.

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TARGET REVENUE FIGURES, REVENUE SHARE AND REVENUE SUPPORT

The original franchise agreement required First Group to split any fare revenue with the Scottish Government once this exceeded the “target revenue” figures set out in table 8.2 of Appendix 1 to Schedule 2 of the agreement by a certain amount, i.e:

• Greater than 102% of target revenue, but less than 106%: 50/50 split between the Scottish Government and First Group • Greater that 106% of target revenue: 80/20 split between the Scottish Government and First Group

Similarly, once the franchise entered its fourth year and First Group failed to meet the target revenue figures by a specified amount, the Scottish Government would make additional revenue support payments to First Group. These would take effect when:

• Less than 98% of target revenue but equal to or more than 94%: 50% of shortfall • Less than 94% of target revenue: 80% of shortfall

Revenue support payments should not be made where First Group is in breach of franchise conditions or where losses are incurred due to strike action

The amended franchise agreement increases the annual “target revenue” figures set out in the original franchise. The amended figures are based on actual revenue for the fourth year of the franchise plus an annual increase of RPI + 1, plus a further 1% for underlying growth in passenger numbers. Unfortunately, while the amended franchise document does state the annual increase in the target revenue figure, the figures in the original franchise document held by SPICe (provided by the previous Scottish Executive in response to parliamentary question S2W-11627) have been blacked out for reasons of commercial confidentiality. This means that SPICe cannot calculate the new target revenue figures.

The amended franchise agreement increased the proportion of revenue that First Group could retain without making revenue share payments by increasing the figures which trigger these payments as follows:

• Greater than 102% of target revenue, but less than 106% changed to Greater than 110% of target revenue, but less than 114% • Greater that 106% of target revenue changed to Greater than 114% of target revenue

In addition the amended franchise agreement reduced the trigger for the payment of revenue support payments by the Scottish Government as follows:

• Less than 98% of target revenue but equal to or more than 94% changed to Less than 90% but equal to or more than 86% • Less than 94% of target revenue changed to Less than 86%

Without access to the actual target revenue figures it is not possible to analyse these changes.

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PRICED OPTIONS

The amended franchise agreement contains a list of priced options, i.e. service enhancements, which the Scottish Government may require First Group to provide. The decision as to whether any of these options goes ahead will be made by Scottish Ministers, although many of the options do have a “last date for exercising this option” attached to them.

These priced options will be funded by First Group from reinvestment of anticipated revenue share payments to the Scottish Government. Details of maximum annual expenditure on priced options are set out in Table 3 of the amended franchise agreement

In addition to the listed priced options, the Scottish Government also require First Group to work with them on developing a priced option for the improvement of the service, with a view to improvements in ticketing, access to seated accommodation within Scotland, improved onward connectivity and eventual replacement of the ageing rolling stock.

NEW COMMITTED OBLIGATION

The amended franchise agreement places a new duty on First Group to preserve and, where possible, improve journey times when considering timetable changes.

EXTENSION CRITERIA

The franchise agreement will be extended after the initial expiry date, i.e. 15 October 2011, if First Group meets the following revised performance targets. First Group has waived its right to choose to terminate the contract at the initial expiry date.

Delays: Schedule 7.1 of the original franchise agreement required First Group to ensure that delays to ScotRail services attributable to it did not exceed a certain number of minutes for each 28 day reporting period, a figure known as the target performance level. In addition to the target performance level the original franchise agreement also set another three higher thresholds, which if breached would result in increasingly strict enforcement action being taken to ensure performance was improved and, if performance did not improve, could ultimately result in the franchise being removed from First Group.

The amended franchise agreement tightened up the target performance level for delays and the other three benchmarks as set out in the table below.

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Table 1: Comparisons between original and amended franchise targets for number of minutes delay per reporting period, and delay levels where remedial would be required or enforcement action taken against the franchise holder

Target Improvement Plan Breach Default Performance Level Performance Level Performance Level Performance Level (Minutes Delay) (Minutes Delay) (Minutes Delay) (Minutes Delay) Reporting Original Amended Original Amended Original Amended Original Amended Period Y5 – P1 43000 27900 46500 30000 49500 32100 51500 33500 Y5 – P2 43000 27800 46500 29900 49500 32000 51500 33400 Y5 – P3 42500 27800 46000 29900 49000 23000 51000 33400 Y5 – P4 42500 27800 46000 29800 49000 31900 51000 33300 Y5 – P5 42500 27700 46000 29800 49000 31900 51000 33300 Y5 – P6 42500 27700 46000 29700 49000 31800 51000 33200 Y5 – P7 42500 27600 46000 29700 49000 31800 51000 33100 Y5 – P8 42500 27600 46000 29600 49000 31700 51000 33100 Y5 – P9 42500 27500 46000 29600 49000 31700 51000 33000 Y5 – P10 42500 27500 46000 29600 49000 31600 51000 33000 Y5 – P11 42000 27500 45500 29500 48500 31600 50500 32900 Y5 – P12 42000 27400 45500 29500 48500 31500 50500 32900 Y5 – P13 42000 27400 45500 29400 48500 31500 50500 32800 Y6 – P1 42000 27300 45500 29400 48500 31400 50500 32800 Y6 – P2 42000 27300 45500 29300 48500 31400 50500 32700 Y6 – P3 42000 27200 45500 29300 48500 31300 50500 32700 Y6 – P4 42000 27200 45500 29200 48500 31300 50500 32600 Y6 – P5 42000 27200 45500 29200 48500 31200 50500 32600 Y6 – P6 41500 27100 45000 29100 48000 31200 50000 32500 Y6 – P7 41500 27100 45000 29100 48000 31100 50000 32500 Y6 – P8 41500 27000 45000 29100 48000 31100 50000 32400 Y6 – P9 41500 27000 45000 29000 48000 31000 50000 32400 Y6 – P10 41500 26900 45000 29000 48000 31000 50000 32300 Y6 – P11 41500 26900 45000 28900 48000 30900 50000 32300 Y6 – P12 41500 26900 45000 28900 48000 30900 50000 32200 Y6 – P13 41000 26800 44500 28800 47500 30800 49500 32200 Y7 – P1 41000 26800 44500 28800 47500 30800 49500 32100 Y7 – P2 41000 26700 44500 28700 47500 30700 49500 32100 Y7 – P3 41000 26700 44500 28700 47500 30700 49500 32000 Y7 – P4 41000 26700 44500 28700 47500 30700 49500 32000 Y7 – P5 41000 26600 44500 28600 47500 30600 49500 31900 Y7 – P6 41000 26600 44500 28600 47500 30600 49500 31900 Y7 – P7 41000 26500 44500 28500 47500 30500 49500 31800 Y7 – P8 41000 26500 44500 28500 47500 30500 49500 31800 Y7 – P9 41000 26400 44500 28400 47500 30400 49500 31700 Y7 – P10 41000 26400 44500 28400 47500 30400 49500 31700 Y7 – P11 41000 26400 44500 28300 47500 30300 49500 31600 Y7 – P12 41000 26300 44500 28300 47500 30300 49500 31600 Y7 – P13 41000 26300 44500 28300 47500 30200 49500 31500 to Y10 – P8

Delay minute figures are collated in the UK wide Industry Period Performance Report, which is managed by . However, only UK wide aggregated delay minute figures are made public, as the more detailed information is considered to be commercially sensitive. This means that it is not possible to analyse how challenging the revised targets set for First Group are when compared with past performance.

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Capacity: Schedule 7.1 of the original franchise agreement required First Group to ensure that the number of trains it operated which did not meet or exceed the carrying capacity set out for each service in the appropriate train plan did not exceed the target performance level set out in Appendix 2 to Schedule 7.1.

In addition to the target performance level the original franchise agreement also set another three higher thresholds, which if breached would result in increasingly strict enforcement action being taken to ensure performance was improved and, if performance did not improve, could ultimately result in the franchise being removed from First Group.

The amended franchise agreement tightened up the target performance level and the other three benchmarks as set out in the table below.

Table 2: Comparisons between original and amended franchise targets for the number of trains not meeting the required carrying capacity per reporting period, and the levels where such under capacity would require remedial action or where enforcement action would be taken against the franchise holder

Target Improvement Plan Breach Default Performance Level Performance Level Performance Level Performance Level (%) (%) (%) (%) Reporting Original Amended Original Amended Original Amended Original Amended Period Y5 – P1 0.8% 0.40% 0.9% 0.45% 1.0% 0.50% 1.1% 0.55% Y5 – P2 0.8% 0.40% 0.9% 0.45% 1.0% 0.50% 1.1% 0.55% Y5 – P3 0.8% 0.40% 0.9% 0.45% 1.0% 0.50% 1.1% 0.55% Y5 – P4 0.8% 0.40% 0.9% 0.45% 1.0% 0.50% 1.1% 0.55% Y5 – P5 0.8% 0.40% 0.9% 0.45% 1.0% 0.50% 1.1% 0.55% Y5 – P6 0.8% 0.40% 0.9% 0.45% 1.0% 0.50% 1.1% 0.55% Y5 – P7 0.8% 0.40% 0.9% 0.45% 1.0% 0.50% 1.1% 0.55% Y5 – P8 0.8% 0.40% 0.9% 0.45% 1.0% 0.50% 1.1% 0.55% Y5 – P9 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y5 – P10 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y5 – P11 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y5 – P12 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y5 – P13 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P1 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P2 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P3 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P4 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P5 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P6 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P7 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P8 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P9 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P10 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P11 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P12 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y6 – P13 0.7% 0.40% 0.8% 0.45% 0.9% 0.50% 1.0% 0.55% Y7 – P1 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P2 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P3 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P4 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P5 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P6 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P7 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55%

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Y7 – P8 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P9 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P10 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P11 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P12 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% Y7 – P13 0.6% 0.40% 0.7% 0.45% 0.8% 0.50% 0.9% 0.55% to Y10 – P8

Information on train formation, and hence carrying capacity, is recorded for every rail service operated in the UK in the PALADIN database, which is managed by Network Rail. Unfortunately, this information is not publicly available. Again, this means it is not possible to consider how challenging the new targets are in relation to past performance on the ScotRail network.

It is worth noting that, while the targets have been tightened, they remain static for the remainder for the franchise whereas the figures in the original franchise agreement required ongoing improvement from First Group.

PROFIT SHARE

The amended franchise agreement introduces a new profit sharing mechanism. If First Group earns a profit greater than £27.427 million in any franchise year, after year 4, plus any profit from the exercise of a priced option then it must pay Scottish Ministers a sum equal to 50% of the additional profit. Payment can be in cash or ‘in kind’, i.e. through the provision of additional priced options. The £27.427m figure will be increased annually by the RPI figure as defined above.

LONG FORM REPORTING First Group will be required to co-operate with Scottish Ministers in the preparation of a “long form report”, which contains information useful to the smooth transfer of operations at the end of the current franchise. In addition First Group will be required to:

• Advise on a new organisational structure for the franchise company • Consult trade unions • Transfers staff in accordance with TUPE regulations • Assist in the negotiation and design of revised contracts • Prepare detailed financial accounts detailing income and expenditure • Prepare other reports as required by Scottish Ministers to assist with the hand over to a new operator • To work with Scottish Ministers to ensure that all appropriate licences and agreements are transferred to the new operator • Prepare train operations for reorganisation to suit the concerns of Scottish Ministers

MAJOR PROJECTS

First Group will be required to assist Scottish Ministers in the planning and implementation of designated Major Projects and projects listed in the High Level Output Specification (Scottish Government 2007) which was published by Scottish Ministers on 13 July 2007. The amended franchise agreement contains a list of “…the type of projects envisaged to be included”, which are: providing research and information services to the Scottish Parliament 10

• Airdrie – Bathgate • Rail Link • Waverley (Borders) Railway • Redevelopment of Haymarket station • Central Scotland electrification • Major service enhancements, e.g. Edinburgh/Glasgow and Glasgow to Ayrshire

COMMONWEALTH GAMES

The original franchise agreements (Schedule 1.3, section 7) contains provisions for First group to co-operate with parties involved in the organisation of the 2012 Olympics. The amended franchise agreement extends these requirements to also cover the Commonwealth Games which will be held in Glasgow during 2014.

FARES FROM NEW STATIONS

In line with normal rail industry practice, First Group would be responsible for setting the fares from any new railway stations that open while they hold the ScotRail Franchise. The amended franchise agreement requires First Group to secure the agreement of Scottish Ministers prior to setting any such fares. Where an agreement cannot be reached, First Group must set the fares at a level specified by Scottish Ministers.

ADDED VALUE

The fact that the franchise has been extended is of potential financial benefit to First Group. In recognition of this First group has agreed to pay Scottish Ministers an additional £5.4994 million over the period of the extended franchise. £2.7247 million of this will be through in-kind payments for the provision of priced options 17 (Commonwealth Games), 22 (Smartcards) and 28 (Stations Community Regeneration Fund). Payment of the remaining £2.7747 million will be made in-kind or as a deduction from ongoing franchise payments.

EXTENSION TRIAL PERIOD

The extension of the franchise is conditional up until 1 October 2009. During the period up until 1 October 2009, Scottish Ministers may choose to end the franchise at the initial expiry date if:

• There is an “Event of Default”, as defined in schedule 10.3 of the original franchise agreement, e.g. insolvency, non-payment of any amount due to Scottish Ministers, revocation of any licence required to operate rail services or contravention of the Default Performance Level for three consecutive reporting periods, any four reporting periods within a period of 13 consecutive reporting periods or any five reporting periods within a period of 26 consecutive reporting periods • First Group fails to: o maintain train performance at least at the Target Performance Levels shown in the revised benchmarks; or

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o maintain SQUIRE1 performance at not more than 1.586 billion performance points during any 13 consecutive reporting periods; or o deliver Committed Obligations and those Priced Options as required by Scottish Ministers • At any time during the trial period there has been more than one Remedial Plan Notice, i.e. a notice issued by Scottish Ministers to First Group if they contravene or are likely to contravene any term of the franchise agreement, for which First Group have failed to supply a Remedial Plan to Scottish Ministers within the required time frame and/or the two parties have failed to reach agreement on a Remedial Agreement based on the Remedial Plan after the Plan’s submission to Scottish Ministers

SCOTTISH MINISTERS’ POLICY AND SPECIFIC INITIATIVES

Scottish Ministers reserve the right to change the list of priced options in the amended franchise agreement and require First Group to carry out these new options, as long as the cost of these new options does not exceed the annual expenditure on priced options set out in the amended franchise agreement.

SOURCES

Strategic Rail Authority, Strathclyde Passenger Transport Executive and First ScotRail Limited. (2004) ScotRail Franchise Agreement. London: Strategic Rail Authority.

Transport Scotland. (2007) Scottish Ministers’ High Level Output Specification. Glasgow: Scottish Government. Available at: http://www.transportscotland.gov.uk/files/documents/rail/HLOS-July-2007.pdf

Scottish Government and First Group. (2008) Amendment Agreement. Glasgow: Scottish Government/First ScotRail.

1 SQUIRE: Short for Service Quality Regime, SQUIRE sets out numerous service quality benchmarks to be met by the holder of the ScotRail franchise, e.g. amount of station graffiti, working station toilets, cleanliness of trains etc. Adherence to the SQUIRE standards is monitored by a team of Transport Scotland inspector who mark compliance with the required standards using a points system. providing research and information services to the Scottish Parliament 12

APPENDIX 1: LIST OF PRICED OPTIONS

Appendix 1: Priced Option 1. First Group to appoint a Project Manager to assist in the delivery of major projects and priced options 2. First Group to procure additional rolling stock to enable it to deliver services required by major projects 3. Enhancements to the Edinburgh, and Aberdeen service and creation of a new station at Laurencekirk 4. Introduction of half-hourly Glasgow- service and recast of Ayr-Girvan and Stranraer timetables 5. One additional Edinburgh-Glasgow Queen Street and Glasgow Queen Street-Edinburgh service at 0645 and 1915 every Monday to Friday, these began on 19 May 2008 with the later services also operating on Saturday 6. Extension of current Sunday Glasgow to Stirling and Stirling to Glasgow services to and from Alloa 7. Continuation of current Sunday services between Partick and Larkhall once current agreement with SPT ends 8. Introduction of an hourly semi-fast service between Edinburgh and Glasgow Central via Shotts 9. Introduction of additional early morning services from Gourock, Ayr, Kilmarnock, Dunblane and Perth to connect with the first services of the day leaving Glasgow/Edinburgh for London with an option for an additional service from North Berwick 10. Introduction of one additional early morning Dunbar to Edinburgh service and one late evening Edinburgh to Dunbar service 11. Introduction of an additional six return journeys between Glasgow and Perth daily, some trains between Glasgow and Dunblane will be cut back to Stirling to facilitate this service 12. Introduction of an additional early afternoon Inverness-Wick and late Friday night Inverness-Tain service 13. Creation of a virtual branch line to St. Andrews, i.e. integrated bus/rail ticketing and timetables 14. Continued operation of the shuttle bus linking Glasgow Central and Glasgow Queen Street stations 15. Through rail/bus ticketing from Wallyford station to Edinburgh Royal Infirmary (ERI) and introduction of a bus service between Newcraighall station and ERI 16. Construction of a ticket office at Edinburgh Park station which is to be staffed between 0600 and 1900 Monday to Friday 17. First Group will be required to carry out projects related to the Commonwealth Games 18. Develop and implement an annual Environmental Improvement Works Programme, i.e. small scale projects not the responsibility of Network Rail or the rolling stock leasing company 19. First Group to examine train operations on each line of route with a view to making changes to deliver better efficiency, performance and sustainability while meeting customer needs 20. Piloting of schemes aimed at shifting car commuters to rail, e.g. shoulder peak ticket pricing, direct debit purchase of season tickets 21. Creation of an additional fully accessible ticket counter at Haymarket Station, subject to planning permission 22. Creation of smartcard and mobile phone ticketing for the service linking Edinburgh and providing research and information services to the Scottish Parliament 13

Glasgow Queen Street 23. Introduction of new Scottish Minister owned “Scottish Rail” brand to all ScotRail trains and stations 24. Re-deployment of diesel multiple units (DMU) currently operating between Edinburgh and Bathgate to strengthen other DMU operated services 25. First Group to meet the revenue costs of capital projects pursued by third parties, e.g. costs associated with operating CCTV systems funded by local authorities 26. Additional day time customer service staff at Glasgow Queen Street, Edinburgh, Haymarket, Aberdeen and Inverness (May to September only) stations 27. Introduction of free wireless internet access on services linking Edinburgh and Glasgow Queen Street 28. Creation of a “stations community regeneration fund” which will be available to community groups, voluntary organisations and small businesses who want to use disused station buildings

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