London Banter - View Single Post - Rail commuters face 20% rise in ticket prices as cap is axed

[email protected] · October 19th 10, 07:22 AM posted to uk.transport.london

In article , (Roy
Badami) wrote:

In article ,
wrote:
In article , (Roy
Badami) wrote:

In article ,
Clive D. W. Feather wrote:
Um, won't that breach the present franchise agreements?

Presumably the gov't will negotiate (or legislate) a variation in the
franchise agreements that will balance lower subsidies/higher
premiums with an increase in the fares basket cap, such that the
overall package is revenue-neutral on the TOCs.

That could be more expensive than it seems if cap and collar
applies to most of the franchises

I'm not sure why. By definition it would be calculated to be revenue
neutral, so any increase in fares collected will effectively go to the
exchequer.

Er, it's not quite that simple. Cap and collar isn't cost-free to TOCs and
higher fares could drive passengers away, worsening their results.
Therefore they might not accept the change without some compensation.

--
Colin Rosenstiel