Climate Contract Playbook Edition 3
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1. The clause will ensure that franchise operators must invest in sustainable ancillary transport that connects passengers with rail services. Ensuring the lowest carbon method of transport is adopted. 2. The provision will also ensure ancillary transport services continue to be evaluated in terms of suitability and sustainability.
Impact
1. Government (DfT) 2. Rail franchise operators (Train Operating Companies) 3. Law firms
Stakeholders
Rail franchise operators are obliged to provide a sustainability plan as part of the bid process. This provision should be included in the sustainability plan and follow through into the franchise agreement.
Application
The suggested drafting is split into two sections.
Section 1 provides drafting which could be inserted within the ‘Committed Obligations’ schedule of a franchise agreement, having formed part of the successful bidder’s submission at the procurement stage. The Department for Transport will need to require bidders to include the green initiatives in the bid for the new franchise.
The timelines and targets will need to be tailored to the bid’s nuances.
Section 2 provides drafting to amend Schedule 14.7 (Incentivising Long-Term Investment). Whilst this would not place explicit obligations on the current franchisee, it does provide the ability for the incumbent franchisee to submit proposals to the Secretary of State in relation to the use of clean vehicles which, if accepted by the Secretary of State, could form an amendment to the relevant franchise agreement as of the date at which the new franchise begins. Any associated capital expenditure would then be recoverable by the incumbent franchisee at the end of the relevant franchise (although the target of this expenditure would also pass to the next franchisee). The drafting demonstrates the principle of incorporating EV usage within TOC contracts but it is acknowledged that further drafting is required for specific implementation and target setting. Further that remedies for failure to achieve clean vehicle targets would be required.
Notes for users
Additional Definition: “ clean vehicles ” has the meaning given to such term within Directive 2009/33/EC, as amended by EU Directive 2019/1161 Existing Definitions from existing franchise agreement: Committed Obligations or COs means any of the Franchisee’s obligations listed in Part 1 (Committed Obligations) of Schedule 6.2 (Committed Obligations) or any other obligation of the Franchisee expressed as a Committed Obligation under the Franchise Agreement;
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