Provision of Consultancy for the Project on Upfront Payments ("Project PUP")

Under the current rail franchising model, bidders propose the franchise payments that they are willing to pay (or the subsidy they require) for each year of the franchise term. In return, the Department gives the winning bidder the right (and the obligation) to deliver the services specified in the Franchise Agreement. Advice is being sought on what options are available for requesting upfront payments for rail franchises and the impact such payments structures could have on the incentives of bidders, operators, taxpayers and passengers. Furthermore, the Department wishes to understand whether it should consider requesting upfront payments for different franchise structures it may tender i…

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