Posted 29 May 2018 - 12:56 AM
(1) I think there's a "Winner's Curse" problem at hand here. The classic example of this is bidding on oil rights on some land: The person who thinks the land has the most oil to extract will likely win the contract (since they'll usually enter a higher bid than the others), but they obviously also have the biggest risk of being wrong.
(2) With that in mind, it would seem that there's a case that at least part of the payment should be based on the franchise operator's ability to operate their planned services (e.g. if Network Rail  fails to follow through, some of the payments are waived). This would probably require Network Rail to be party to the contracts in some manner on the government side (if only to potentially tell both the operator and the government "Nope, that plan is impossible in that given timeframe").
(3) Bear in mind that the line was, IIRC, producing several hundred million dollars per year in profit before payments. I think it was like $200m/yr. The problem is that, per the contract, that left about a $300m/yr hole.
 Not Railtrack. Railtrack was the private-sector fiasco in the 1990s.
Edited by Anderson, 29 May 2018 - 12:56 AM.
jis, cirdan and Ziv like this
Capitol Limited (7), CA Zephyr (4) Lake Shore Limited (1), Acela (2), NE Regional (2), Sliver Meteor (4)
Upcoming: Silver Meteor (1), Lake Shore Limited (1), SW Chief (2), MO River Runner (1), Texas Eagle (1)
Possibly Upcoming: Either Texas Eagle (1), Capitol Limited (1), Silver Meteor (2) or Texas Eagle (1), Capitol Limited (1), Silver Meteor (1)