The Public Service Obligations in Transport Regulations 2023

Direct award of rail contracts due to structural and geographical characteristics

19.—(1) A competent authority may award a public service contract for public passenger transport services by rail directly—

(a) where it considers that the direct award is justified by the relevant structural and geographical characteristics of the market and network concerned, in particular relating to—

(i) size,

(ii) demand characteristics,

(iii) network complexity,

(iv) technical and geographical isolation,

(v) the services to be covered by the contract, and

(b) where such a contract would result in an improvement in quality of services or cost-efficiency, or both, compared to the previously awarded public service contract.

(2) Where the competent authority awards a public service contract under paragraph (1), it must include measurable, transparent and verifiable performance requirements in the contract.

(3) The performance requirements must, in particular, cover—

(a) punctuality of services,

(b) frequency of services,

(c) quality of rolling stock, and

(d) transport capacity for passengers.

(4) A contract awarded under this regulation must include—

(a) specific performance indicators enabling the competent authority to carry out periodic assessments, and

(b) effective and deterrent measures to be imposed in case the public service operator fails to meet the performance requirements.

(5) A competent authority that has awarded a contract under this regulation must—

(a) periodically assess whether the public service operator has achieved its targets for meeting the performance requirements as set out in the contract, and

(b) publish its findings on its website.

(6) The first periodic assessment undertaken under paragraph (5)(a) must take place no more than five years after the date on which the contract was entered into, with subsequent assessments taking place at intervals not exceeding five years following the first periodic assessment.

(7) The competent authority must take appropriate and timely measures to enforce a contract awarded under this regulation which may include the imposition of effective and deterrent contractual penalties, if any required improvements in quality of services or cost-efficiency, or both, are not achieved.

(8) The competent authority must publish on its website a contract awarded under this regulation, taking into consideration the protection of commercially sensitive information and commercial interests.