In that section, after subsection (2) insert—

“(2A)

A designation may be varied or revoked; but a variation or revocation of the designation of particular services, or services of a class or description, shall not affect any franchise agreement previously entered into with respect to those services or services of that class or description.

(2B)

The Authority shall publish designations, and any variations or revocations of designations, in such manner as it considers appropriate.”

In section 26 of that Act (invitations to tender for franchise), after subsection (3) insert—

“(4)

The directions which may be given under subsection (1) above (at any time when the Secretary of State considers it inappropriate that the person who is to be the franchisee under a franchise agreement should be selected after an invitation to tender) include—

(a)

a direction that that person is to be the person specified in the direction, and

(b)

a direction requiring the Authority to select that person in such manner as is so specified,

(as well as a direction authorising the Authority to select that person in such other manner as it may consider appropriate).

(5)

The Secretary of State shall prepare and publish a statement of policy with respect to directions under subsection (1) above.

(6)

The statement shall (in particular) contain the Secretary of State’s policy about—

(a)

when he will consider giving a direction (including, in particular, when he will consider doing so in relation to a franchise agreement which is to replace an earlier franchise agreement before the end of its franchise term); and

(b)

the sorts of direction which he will consider giving in particular circumstances.

(7)

In deciding whether to give a direction, and (if so) what direction to give, the Secretary of State shall have regard to the statement of policy.

(8)

The Secretary of State—

(a)

may at any time alter or replace a statement of policy; and

(b)

shall publish the altered or replacement statement.

(9)

The Secretary of State shall undertake appropriate consultation when preparing, altering or replacing a statement of policy.

(10)

When a statement of policy is prepared, altered or replaced, a copy of the statement shall be laid before each House of Parliament.”

After that section insert—

“26A No tenders for franchise.

(1)

The Authority shall give notice to the Secretary of State if it has—

(a)

issued an invitation to tender for the provision of any services under section 26 above (otherwise than in compliance with a direction under section 26B(3)(b) below); but

(b)

received no tenders in response to the invitation.

(2)

On receipt of the notice under subsection (1) above the Secretary of State shall (after considering the matter) give to the Authority—

(a)

a direction to issue new invitations to tender for the provision of the services under section 26 above, or

(b)

a direction not to seek to secure the provision of the services under a franchise agreement,

as he considers appropriate.

(3)

The Secretary of State may at any time—

(a)

revoke a direction under subsection (2)(b) above; and

(b)

instead direct the Authority to issue new invitations to tender for the provision of the services under section 26 above.

26B No adequate tenders for franchise.

(1)

The Authority shall give notice under subsection (2) below if—

(a)

it has issued an invitation to tender for the provision of any services under section 26 above (otherwise than in compliance with a direction under subsection (3)(b) below); but

(b)

although it has received a tender or tenders in response to the invitation, it considers that the services would be provided more economically and efficiently than under a franchise agreement entered into pursuant to the tender or any of the tenders if the Authority provided them or secured their provision otherwise than under a franchise agreement.

(2)

The notice shall be given to—

(a)

the Secretary of State; and

(b)

the person, or each of the persons, who submitted a tender.

(3)

On receipt of the notice under paragraph (a) of subsection (2) above the Secretary of State shall (after considering the matter and any representations duly made in response to a notice under paragraph (b) of that subsection and not withdrawn) give to the Authority—

(a)

a direction to reconsider the tender or tenders with a view to selecting a franchisee, or

(b)

a direction to issue new invitations to tender for the provision of the services under section 26 above,

as he considers appropriate.

(4)

The Authority shall give notice under subsection (5) below if it has issued an invitation to tender for the provision of any services under section 26 above in compliance with a direction under subsection (3)(b) above but either—

(a)

it has received no tenders in response to the invitation; or

(b)

although it has received a tender or tenders in response to the invitation, it considers that the services would be provided more economically and efficiently than under a franchise agreement entered into pursuant to the tender or any of the tenders if the Authority provided them or secured their provision otherwise than under a franchise agreement.

(5)

The notice shall be given to—

(a)

the Secretary of State; and

(b)

if the Authority received a tender or tenders, the person, or each of the persons, who submitted a tender.

(6)

In a case where the Authority has received no tenders, on receipt of the notice under subsection (5)(a) above the Secretary of State shall give to the Authority a direction not to seek to secure the provision of the services under a franchise agreement.

(7)

In a case where the Authority has received a tender or tenders, on receipt of the notice under paragraph (a) of subsection (5) above the Secretary of State shall (after considering the matter and any representations duly made in response to a notice under paragraph (b) of that subsection and not withdrawn) give to the Authority—

(a)

a direction to reconsider the tender or tenders with a view to selecting a franchisee, or

(b)

a direction not to seek to secure the provision of the services under a franchise agreement,

as he considers appropriate.

(8)

Any notice under subsection (2)(b) or (5)(b) above shall specify a period (not being less than 28 days from the date of the service of the notice) within which representations may be made to the Secretary of State.

(9)

The Secretary of State may at any time—

(a)

revoke a direction under subsection (6) or (7)(b) above; and

(b)

instead direct the Authority to issue new invitations to tender for the provision of the services under section 26 above.

26C Review of directions.

(1)

If the Secretary of State gives a direction under section 26B(3) or (7) above, he shall give notice to the person or persons who submitted the tender or tenders that he has done so.

(2)

An application for the review of a decision of the Secretary of State to give a direction under section 26B(3) or (7) above may be made to the court by any person who submitted a tender within 42 days from the date of service on him of the notice under subsection (1) above.

(3)

Except as provided by subsection (2) above, a direction under section 26A or 26B above shall not be questioned by any legal proceedings whatever.

(4)

In subsection (2) above “the court” means—

(a)

the High Court in relation to England and Wales; and

(b)

the Court of Session in relation to Scotland.”

For section 30 of that Act substitute—

“30 Duty of Authority in absence of franchise.

(1)

The Authority shall provide, or secure the provision of, services for the carriage of passengers by railway where—

(a)

a direction not to seek to secure the provision of the services under a franchise agreement has been given to the Authority under section 26A or 26B above (and not revoked); or

(b)

a franchise agreement in respect of the services is terminated or otherwise comes to an end but no further franchise agreement has been entered into in respect of the services (otherwise than because of such a direction).

(2)

The duty in subsection (1) above in relation to any services ceases if the services begin (or again begin) to be provided under a franchise agreement.

(3)

Subsection (1) above does not—

(a)

require the Authority to provide or secure the provision of services if and to the extent that, in its opinion, adequate alternative railway passenger services are available;

(b)

preclude it from giving notice under subsection (5) of section 38 below in relation to any of the services, in which case its duty under this section to secure the provision of the services to which the notice relates will (subject to subsections (5) and (6) of that section) terminate on the day specified in the notice in pursuance of paragraph (b) of that subsection; or

(c)

preclude it from ceasing to provide or secure the provision of any of the services in any case falling within any of paragraphs (a) to (d) of subsection (2) of that section.”

In section 18 of that Act (access agreements: contracts requiring approval of Regulator), after subsection (6) insert—

“(6A)

The grounds on which the Regulator may reject, or approve subject to modifications, a proposed access contract submitted to him pursuant to subsection (5) above include that he considers that the use of the facility for which it provides might impede the provision of services—

(a)

under a franchise agreement; or

(b)

under an agreement entered into by the Authority pursuant to its duty under section 30 below.”