The UK rail industry is to be restructured under a new public body called Great British Railways but will continue to mostly be run by private companies, the government has announced.
For passengers, the new regime includes changes aimed at delivering "simpler, modern fares", including new flexible season tickets on sale from 21 June via a new Great British Railways website.
The new tickets are designed to appeal to those who commute two or three days per week, with new paperless tickets allowing travel on any eight days in a 28-day period.
As the publicly owned new umbrella organisation, Great British Railways subsume Network Rail, taking responsibility for track and stations, as well as collecting fare revenue, running and planning the network, and setting most fares and timetables.
A white paper entitled 'The Williams-Shapps Plan for Rail' sets out "the path towards a truly passenger-focused railway, underpinned by new contracts that prioritise punctual and reliable services, the rapid delivery of a ticketing revolution, with new flexible and convenient tickets and long-term proposals to build a modern, greener and accessible network".
"There will remain a substantial and often greater role for the private sector," the Department for Transport (DfT) said in a statement, with GBR to grant contracts to companies to operate most trains to the timetables and fares it specifies, similar to the model used by Transport for London.
To that end, FirstGroup PLC (LON:FGP) announced that it has won new national rail contracts with the DfT for its South Western Railway and TransPennine Express train operating companies, which will both begin on 30 May 2021, when the current emergency contract agreements come to an end.
Both new contracts are two years' long, with options to extend by up to two further years to May 2025.
The DfT will retain all revenue risk and substantially all cost risk, FirstGroup said, with its 70% share of the joint venture for South Western Railway the fixed management fee is £3.3mln per year and there is the opportunity to earn an additional fee of up to £9.9mln based on performance.
For the TransPennine Express, its fixed management fee is £2.3mln per annum with a possible maximum additional fee of up to £5.2mln.
Performance payments are based on punctuality and other operational targets "designed to incentivise the highest level of performance for customers".
As well as a focus on passengers, the Williams-Shapps Plan also aims to improve efficiency and promote greater rail use, including for freight.
Prime minister Boris Johnson said he was “a great believer in rail”, as shown by his ploughed ahead with the controversial HS2 project, but said: “For too long passengers have not had the level of service they deserve.”
Announcing the more flexible season tickets, transport secretary Grant Shapps said: "For many, the idea of travelling five days a week to the office is fast becoming a relic of the past. The future is flexible: passengers want a simple, stress-free option, and new flexible tickets make fares fairer."
New paperless tickets will allow travel on any eight days in a 28-day period, with passengers able to tap smartcards or scan mobiles at the station, with no need to select the days of travel in advance.
Shares in Trainline PLC (LON:TRN) tumbled 24% to 325p by mid-morning, with analysts saying the changes could have some positive and some negative effects for the online ticket seller.
On the other hand, Tracsis PLC (LON:TRCS), which develops and manages technologies to monitor and optimise resources in the railway and transport industry, saw its shares rise 4% to 880p, while the market could not make up its mind with FirstGroup, with the shares searching for direction in morning trading.