§ Mr. Hill
[holding answer 7 June 2000]Government subsidies to privatised railway companies take two forms: payments under franchise agreements to passenger train314W operating companies, and grant payments to rail freight operators under the track access and freight facilities grant schemes.
Franchise subsidies are agreed by the Franchising Director following competitive tender. Franchise payments are for specific contractual obligations, including minimum service levels, which the operator must fulfil.
Grant payments to rail freight operators are available on application in accordance with the published terms of the grant schemes. The grant payments are calculated at the lower of the environmental benefit gained, the economic need of the business, and, where applicable, the level of track access charge. Grant is paid only where the service or investment in question is actually delivered.