Franchise agreements and related documents for First Greater Western Limited. Assuming that the termination sums are agreed, the necessary payments would only be due at the end of the ERMA term and, on that date, the already existing franchise agreement would terminate by contract. Matthew Gregory, Chief Executive Officer of FirstGroup, said the agreements “strengthen our balance sheet position and provide our rail business with a potential way to enter a new contractual basis over time, with a more appropriate balance between risk and return for all parties.” Shares of rail operator Go-Ahead rose 17 percent, with the government taking responsibility for its Govia Thameslink and Southeastern franchises, though the company canceled its dividend to save money. In October 2007, the European Union set the maximum length of a rail franchise at 22.5 years: 15 years initially, with a 50% extension in certain circumstances.   They then underwent further restructuring in preparation for franchising, being divided into 25 train operating units (TOUs) or which were gradually admitted as separate parallel undertakings as `parallel franchise` undertakings, which negotiated contracts separately with the regulatory authorities, Railtrack (owner of the infrastructure and central station) and ROSCOs (the rolling stock rental companies) before negotiate contracts in 1996 and 1997. were sold.  In 2012, the franchise system experienced difficulties; The Department of Transportation awarded the InterCity West Coast franchise to FirstGroup, but in October, the Secretary of State for Transport reversed this decision following significant technical deficiencies in the way the franchise process was implemented. Virgin Trains has been awarded a fixed-term management contract to operate the franchise until a new competition can be held.   On September 20, the first emergency assistance agreements expired and were replaced, in most cases, by EMERGENCY Recovery Measures Agreements (ERMAs) lasting between six and eighteen months.
Under this, the Ministry of Transport continues to collect revenues and pay most of the costs of railway operators.  There are some exceptions to the standard model: The Southeastern franchise will continue to operate under its EMA until October 2021 or March 2022, when it will be extended. Rail franchises are decided by the UK government`s Department of Transport (DfT), which sets limits and conditions of use and contracts with train operators.  Under the decentralised administrative agreements, franchises are granted to ScotRail and Caledonian Sleeper of Transport Scotland and the Wales & Borders franchise of Transport for Wales. Under the Railways Act 1993, the public sector in the UK cannot offer for rail franchises, although some franchised railway companies have been temporarily acquired in the past by a public company after an unsuccessful private franchise….