3.1 Because passenger rail services are, on the whole, provided by the private sector, achieving value for money from the rail franchising programme depends largely on the success of the Department for Transport's (the Department's) commercial approach.
3.2 The Department's mantra for the programme is to 'buy the right thing, in the right way'. The Department puts a great deal of effort into designing the specification to achieve value for money, and buying what has been bid. This part looks at the contracted premia that the successful bidders have agreed to pay the Department on the three franchises awarded so far and at three important aspects of its commercial approach:
• allocating risks to the party best placed to manage them;
• getting value for money during the franchise; and
• generating market interest and maintaining strong competition at the procurement stage.