Table Of Content

Dated [INSERT DATE] (1) The Secretary of State for Transport (2) [INSERT NAME OF FRANCHISEE] SOUTH WESTERN FRANCHISE AGREEMENT South Western Franchise Page 1 of 634 Agreement TABLE OF CONTENTS Clauses 1. INTERPRETATION ...................................................................................... 17 2. AGREED DOCUMENTS ................................................................................ 20 3. DEFINITIONS............................................................................................ 21 4. COMMENCEMENT ..................................................................................... 107 5. DURATION OF THE FRANCHISE AGREEMENT ............................................... 108 6. GENERAL OBLIGATIONS............................................................................ 109 7. ASSIGNMENT........................................................................................... 110 8. CHANGE OF CONTROL AND FACILITATION FEE ............................................ 110 9. COMPLIANCE WITH LAWS ......................................................................... 111 10. CUMULATIVE RIGHTS AND REMEDIES ........................................................ 111 11. DISPUTE RESOLUTION PROCEDURE ........................................................... 111 12. NOTICES ................................................................................................. 113 13. SET-OFF.................................................................................................. 114 14. MISCELLANEOUS PROVISIONS .................................................................. 115 15. COMPETITION .......................................................................................... 117 16. ENTIRE AGREEMENT ................................................................................. 118 17. GOVERNING LAW AND JURISDICTION ........................................................ 119 SCHEDULE 1 - PASSENGER SERVICE OBLIGATIONS........................................ 121 SCHEDULE 1.1 ................................................................................................ 122 FRANCHISE SERVICES AND SERVICE DEVELOPMENT ..................................... 122 PART 1 - FRANCHISE SERVICES ........................................................................... 122 1. FRANCHISE SERVICES .............................................................................. 122 2. RESTRICTIONS RELATING TO FRANCHISE SERVICES.................................... 122 3. RESTRICTIONS ON CLOSURES OF RAILWAY PASSENGER SERVICES OR RAILWAY FACILITIES .............................................................................................. 124 4. SUBCONTRACTING ANY PASSENGER SERVICES ........................................... 124 5. STATION SERVICES .................................................................................. 125 6. LIGHT MAINTENANCE SERVICES ................................................................ 125 7. ANCILLARY SERVICES ............................................................................... 126 8. ROYAL TRAIN........................................................................................... 128 PART 2 - SERVICE DEVELOPMENT ........................................................................ 130 9. TRAIN SERVICE SPECIFICATION - PURPOSE AND RESPONSIBILITY ................ 130 10. TRAIN PLAN............................................................................................. 130 11. CONSULTATION ON SIGNIFICANT ALTERATIONS TO THE TIMETABLE ............. 131 12. TIMETABLE DEVELOPMENT RIGHTS ............................................................ 132 13. CERTIFICATION AND NOTIFICATION BY FRANCHISEE OF EXERCISING TIMETABLE DEVELOPMENT RIGHTS ............................................................................. 135 14. PLANNING TO MEET TARGET PASSENGER DEMAND ...................................... 136 15. CAPACITY MITIGATION PLAN ..................................................................... 138 16. NEW OR AMENDED TRAIN SERVICE SPECIFICATION BY THE SECRETARY OF STATE AND FRANCHISEE INFORMED OPINION ............................................. 139 17. PROCEDURAL ARRANGEMENTS AND TIMESCALES ........................................ 141 South Western Franchise Page 2 of 634 Clauses 1-17 Agreement 18. OBLIGATIONS IN RELATION TO OTHER TRAIN OPERATORS ........................... 142 19. PROVISIONS RELATING TO ACCESS AGREEMENTS AND PROPERTY LEASES .... 142 20. THE TIMETABLE AND NETWORK RAIL'S WORKING TIMETABLE ....................... 143 SCHEDULE 1.2 ................................................................................................ 144 OPERATING OBLIGATIONS ............................................................................. 144 1. DAILY OPERATING OBLIGATIONS ............................................................... 144 2. TIMETABLING AND TRAIN PLANNING COMPLIANCE INVESTIGATION .............. 144 3. TIMETABLE CHANGES PROPOSED BY NETWORK RAIL ................................... 146 4. TIMETABLE CHANGES PROPOSED BY THE FRANCHISEE ................................ 146 5. TIMETABLE CHANGES REQUESTED BY THE SECRETARY OF STATE ................. 147 6. OBLIGATIONS OF THE FRANCHISEE IN THE EVENT OF DISRUPTION TO RAILWAY PASSENGER SERVICES ............................................................................. 147 7. OBLIGATION TO USE ALL REASONABLE ENDEAVOURS UNDER THIS SCHEDULE 1.2 ......................................................................................... 148 SCHEDULE 1.3 ................................................................................................ 152 NOT USED....................................................................................................... 152 SCHEDULE 1.4 ................................................................................................ 153 PASSENGER FACING OBLIGATIONS................................................................ 153 1. PUBLISHING THE TIMETABLE..................................................................... 153 2. COMMUNICATING LATE TIMETABLE CHANGES ............................................. 154 3. FARES SELLING RESTRICTIONS ................................................................. 155 4. PASSENGER'S CHARTER ............................................................................ 157 5. END TO END JOURNEYS AND CYCLES......................................................... 159 6. STATUTORY NOTICES ............................................................................... 159 7. TRAIN AND STATION CLEANING ................................................................ 159 8. PUBLICATION OF PERFORMANCE DATA ....................................................... 160 9. PUBLICATION OF COMPLAINTS AND FAULTS HANDLING DATA....................... 161 SCHEDULE 1.5 ................................................................................................ 163 INFORMATION ABOUT PASSENGERS .............................................................. 163 1. PASSENGER NUMBERS INFORMATION ........................................................ 163 2. MANUAL PASSENGER COUNTS ................................................................... 164 3. TECHNOLOGY FOR OBTAINING THE INFORMATION REFERRED TO IN PARAGRAPH 1.2 ....................................................................................... 165 4. CRM DATA ............................................................................................... 165 5. YIELD MANAGEMENT DATA ........................................................................ 166 6. PERSONAL DATA - GENERAL PROVISIONS................................................... 166 7. RAIL PASSENGER COUNTS DATABASE ........................................................ 168 8. INTELLECTUAL PROPERTY RIGHTS AND GENERAL PROVISIONS ..................... 170 SCHEDULE 1.6 ................................................................................................ 173 THE ROLLING STOCK ...................................................................................... 173 1. PURPOSE ................................................................................................ 173 2. THE COMPOSITION OF THE TRAIN FLEET .................................................... 173 3. CHANGES TO THE TRAIN FLEET ................................................................. 174 4. ROLLING STOCK TESTING AND COMMISSIONING ........................................ 175 5. CONTROLLED EMISSION TOILETS .............................................................. 175 South Western Franchise Page 3 of 634 Clauses 1-17 Agreement 6. BABY CHANGING FACILITIES ..................................................................... 175 7. METERED TRAIN OPERATOR STATUS .......................................................... 175 APPENDIX 1 TO SCHEDULE 1.6 ....................................................................... 177 SCHEDULE 1.7 ................................................................................................ 179 STATIONS ...................................................................................................... 179 1. STATION ASSET MANAGEMENT .................................................................. 179 2. GREY ASSETS .......................................................................................... 182 3. STATION SOCIAL AND COMMERCIAL DEVELOPMENT PLAN ............................ 183 4. CONSULTATIONS ..................................................................................... 184 5. NOT USED ............................................................................................... 184 6. SECURITY AT STATIONS ........................................................................... 184 7. INFORMATION ABOUT STATION IMPROVEMENT MEASURES........................... 185 8. NOT USED ............................................................................................... 186 9. STATION INVESTMENT.............................................................................. 186 APPENDIX 1 TO SCHEDULE 1.7 ....................................................................... 187 LIST OF STATIONS AND CAR PARKS WITH SECURE STATIONS ACCREDITATION AND SECURE CAR PARKS ACCREDITATION ................................................................... 187 APPENDIX 2 TO SCHEDULE 1.7 ....................................................................... 193 INFORMATION ABOUT STATION IMPROVEMENT MEASURES..................................... 193 APPENDIX 3 TO SCHEDULE 1.7 ....................................................................... 194 NOT USED....................................................................................................... 194 APPENDIX 4 TO SCHEDULE 1.7 ....................................................................... 195 NOT USED....................................................................................................... 195 SCHEDULE 2 - ASSETS, LEASES, OTHER FRANCHISEES AND SCHEMES ........... 196 SCHEDULE 2.1 ................................................................................................ 197 ASSET VESTING AND TRANSFER..................................................................... 197 1. NOT USED ............................................................................................... 197 2. VESTING OF PROPERTY LEASES DURING THE FRANCHISE TERM .................... 197 SCHEDULE 2.2 ................................................................................................ 199 SECURITY OF ACCESS AGREEMENTS, ROLLING STOCK LEASES, STATION AND DEPOT LEASES ............................................................................................... 199 1. NOVATION OF ACCESS AGREEMENTS DURING THE FRANCHISE TERM ............ 199 2. ROLLING STOCK RELATED CONTRACTS AND INSURANCE ARRANGEMENTS ..... 200 3. CASCADED ROLLING STOCK AND DELAYED CASCADE MITIGATION PLAN........ 201 4. ASSIGNMENT OF PROPERTY LEASES DURING THE FRANCHISE TERM ............. 203 5. STATION AND DEPOT LEASES .................................................................... 204 6. STATION SUBLEASES ............................................................................... 205 SCHEDULE 2.3 ................................................................................................ 206 OTHER FRANCHISEES ..................................................................................... 206 1. OTHER FRANCHISEES ............................................................................... 206 SCHEDULE 2.4 ................................................................................................ 207 NOT USED....................................................................................................... 207 SCHEDULE 2.5 ................................................................................................ 208 TRANSPORT, TRAVEL AND OTHER SCHEMES................................................... 208 1. LOCAL AUTHORITY CONCESSIONARY TRAVEL SCHEMES ............................... 208 South Western Franchise Page 4 of 634 Clauses 1-17 Agreement 2. MULTI-MODAL FARES SCHEMES ................................................................. 209 3. DISCOUNT FARE SCHEMES........................................................................ 211 4. INTER-OPERATOR SCHEMES ...................................................................... 211 APPENDIX 1 TO SCHEDULE 2.5 ....................................................................... 212 LIST OF TRANSPORT, TRAVEL AND OTHER SCHEMES ............................................. 212 SCHEDULE 3 ................................................................................................... 214 NOT USED....................................................................................................... 214 SCHEDULE 4 ................................................................................................... 215 ACCESSIBILITY AND INCLUSIVITY ................................................................ 215 1. RELATIONSHIP WITH OTHER OBLIGATIONS RELATING TO PERSONS WITH DISABILITIES .......................................................................................... 216 2. PHYSICAL ALTERATIONS AND ACCESSIBILITY OF STATIONS ......................... 216 3. DEALING WITH CLAIMS RELATING TO STATIONS ......................................... 219 4. SPECIFIC ADDITIONAL OBLIGATIONS RELATING TO PERSONS WITH DISABILITIES .......................................................................................... 220 APPENDIX 1 TO SCHEDULE 4 .......................................................................... 222 MINOR WORKS .................................................................................................. 222 APPENDIX 2 TO SCHEDULE 4 .......................................................................... 223 ACCESSIBLE TRANSPORT ARRANGEMENTS ........................................................... 223 SCHEDULE 5 ................................................................................................... 224 FARES AND TICKETING .................................................................................. 224 SCHEDULE 5.1 ................................................................................................ 225 PURPOSE, STRUCTURE AND CONSTRUCTION ................................................. 225 1. PURPOSE OF SCHEDULE 5 ......................................................................... 225 2. STRUCTURE OF SCHEDULE 5 ..................................................................... 226 3. CONSTRUCTION ....................................................................................... 226 SCHEDULE 5.2 ................................................................................................ 228 FRANCHISEE'S OBLIGATION TO CREATE FARES ............................................. 228 1. CREATION OF COMMUTER FARES AND PROTECTED FARES ............................ 228 2. RESTRICTIONS ON CREATION OF FARES .................................................... 228 SCHEDULE 5.3 ................................................................................................ 229 ALLOCATION OF FARES TO FARES BASKETS ................................................... 229 1. ALLOCATION OF FARES TO FARES BASKETS ................................................ 229 2. DESIGNATION OF NON FARES BASKET FARES ............................................. 229 SCHEDULE 5.4 ................................................................................................ 231 REGULATION OF FARES BASKET VALUES ........................................................ 231 1. VALUE OF FARES BASKET NOT TO EXCEED REGULATED VALUE ..................... 231 2. VALUE .................................................................................................... 231 3. PROJECTED REVENUE ............................................................................... 231 4. REGULATED VALUE................................................................................... 231 SCHEDULE 5.5 ................................................................................................ 233 REGULATION OF INDIVIDUAL FARES ............................................................. 233 1. PRICE OR CHILD PRICE NOT TO EXCEED REGULATED PRICE OR REGULATED CHILD PRICE ........................................................................................... 233 2. REGULATED PRICE ................................................................................... 233 South Western Franchise Page 5 of 634 Clauses 1-17 Agreement 3. COMPULSORY INTER AVAILABLE FLOWS ..................................................... 234 SCHEDULE 5.6 ................................................................................................ 235 EXCEEDING THE REGULATED VALUE, REGULATED PRICE OR REGULATED CHILD PRICE 235 1. EXCEEDING THE REGULATED VALUE .......................................................... 235 2. EXCEEDING THE REGULATED PRICE OR REGULATED CHILD PRICE ................. 236 SCHEDULE 5.7 ................................................................................................ 237 CHANGES TO FARES AND FARES REGULATION ............................................... 237 1. CHANGES TO FARES BASKETS ................................................................... 237 2. CHANGES TO THE 2010 NOMINAL TICKET SALES ......................................... 238 3. CHANGES TO THE REFERENCE REVENUE, GROSS REVENUE, 2010 NOMINAL TICKET SALES AND/OR 2010 TICKET REVENUE ........................................... 238 4. CHANGES TO PRICES................................................................................ 239 5. CHANGES TO FARES REGULATION ............................................................. 239 6. CHANGES TO COMPULSORY INTER AVAILABLE FLOWS ................................. 239 7. CHANGE OF LEAD OPERATOR/MAJOR FLOW OPERATOR ................................ 240 8. CHANGES TO FARES DOCUMENTS .............................................................. 240 SCHEDULE 5.8 ................................................................................................ 241 FARES REGULATION INFORMATION AND MONITORING ................................. 241 1. INFORMATION ......................................................................................... 241 2. MONITORING........................................................................................... 241 SCHEDULE 5.9 ................................................................................................ 242 SMART TICKETING ......................................................................................... 242 1. SMART TICKETING ................................................................................... 242 SCHEDULE 6 ................................................................................................... 244 FRANCHISE SPECIFIC OBLIGATIONS AND COMMITTED OBLIGATIONS .......... 244 SCHEDULE 6.1 ................................................................................................ 245 FRANCHISE SPECIFIC OBLIGATIONS ............................................................. 245 1. CROSSRAIL ............................................................................................. 245 2. DIGITAL RAILWAY PROGRAMME ................................................................. 247 3. CROSSRAIL 2 .......................................................................................... 248 4. HEATHROW SOUTHERN ACCESS ................................................................ 248 5. CREATION OF AN ISLAND LINE BUSINESS UNIT AND COOPERATION.............. 248 6. ISLAND LINE CCIF SCHEME ....................................................................... 250 7. STATION IMPROVEMENTS ......................................................................... 252 8. STATUS OF GUILDFORD AND CLAPHAM JUNCTION STATIONS ....................... 253 9. POTENTIAL DEVOLUTION TO TRANSPORT FOR LONDON ............................... 254 10. TRANSFER OF STATIONS FROM THE GREAT WESTERN FRANCHISE ................ 255 11. REPORT ON OPTIMISATION OF PASSENGER SERVICES ON SPECIFIED ROUTES .................................................................................................. 256 12. AUTOMATIC SELECTIVE DOOR OPENING CAPABILITY OF THE TRAIN FLEET ..... 257 13. TSS ENHANCEMENT SERVICES .................................................................. 257 14. INFRASTRUCTURE PROJECTS..................................................................... 259 15. BOXING DAY SERVICES ............................................................................ 261 16. DEPOT AND STABLING WORKS AND WATERLOO INTERNATIONAL “FIT OUT” ... 261 South Western Franchise Page 6 of 634 Clauses 1-17 Agreement 17. CO-OPERATION WITH NETWORK RAIL AND THE PREVIOUS FRANCHISEE IN RELATION TO THE DEPOT AND STABLING WORKS ....................................... 265 18. ACQUISITION OF CP5 ROLLING STOCK ....................................................... 266 19. INTRODUCTION INTO PASSENGER SERVICE OF CP5 ROLLING STOCK ............ 271 20. GAUGING RISK ........................................................................................ 273 21. PROJECT MANAGEMENT ............................................................................ 277 22. CLASS 158 UNIT ...................................................................................... 279 23. WATERLOO INTERNATIONAL LEASE CHARGE FRANCHISE PAYMENT ADJUSTMENTS ......................................................................................... 279 APPENDIX 1 TO SCHEDULE 6.1 ....................................................................... 282 PART 1 - SOUTH WEST CORE NETWORK ............................................................... 282 PART 2 - SOUTH WEST OUTER NETWORK ............................................................. 284 SCHEDULE 6.2 ................................................................................................ 285 COMMITTED OBLIGATIONS ............................................................................ 285 PART 1 - COMMITTED OBLIGATIONS .................................................................... 285 PART 2 - SPECIAL TERMS RELATED TO COMMITTED OBLIGATIONS .......................... 286 1. CONTINUATION OF AVAILABILITY .............................................................. 286 2. EXPENDITURE COMMITMENTS ................................................................... 286 3. LIAISON AND CO-OPERATION.................................................................... 287 4. NATURE OF COMMITMENT ......................................................................... 287 5. REVIEW OF COMPLIANCE .......................................................................... 288 6. REMEDY FOR LATE COMPLETION OR NON-DELIVERY OF COMMITTED OBLIGATIONS .......................................................................................... 288 7. SPECIMEN SCHEMES ................................................................................ 288 8. THIRD PARTY CONSENTS, AGREEMENT AND CONDITIONS ............................ 288 9. DEFINITION OF “ALL REASONABLE ENDEAVOURS” OR “REASONABLE ENDEAVOURS” ......................................................................................... 289 10. DESIGNATION OF ASSETS COMPRISED IN COS AS PRIMARY FRANCHISE ASSETS .................................................................................................. 289 SCHEDULE 6.3 ................................................................................................ 291 NOT USED....................................................................................................... 291 SCHEDULE 7 ................................................................................................... 292 PERFORMANCE BENCHMARKS ........................................................................ 292 SCHEDULE 7.1 ................................................................................................ 293 OPERATIONAL PERFORMANCE ....................................................................... 293 1. DEFINITIONS, CHANGES TO BENCHMARKS AND ANNUAL BENCHMARKS AND NOTICE OF PERFORMANCE RESULTS .......................................................... 293 2. REPORTING REQUIREMENTS ..................................................................... 299 PART A – NON-FINANCIAL ENFORCEMENT REGIME................................................. 300 3. CANCELLATION CALCULATION: VALUE OF A ................................................ 300 4. CANCELLATION CALCULATIONS DURING THE INITIAL REPORTING STAGE ...... 300 5. CANCELLATION CALCULATION DURING THE BREACH REPORTING STAGE ....... 301 6. CANCELLATION CALCULATIONS DURING THE SUBSEQUENT REPORTING STAGE .................................................................................................... 301 7. NOT USED. .............................................................................................. 301 8 NOT USED. .............................................................................................. 301 South Western Franchise Page 7 of 634 Clauses 1-17 Agreement 9. NOT USED. .............................................................................................. 301 10. TOC MINUTE DELAY CALCULATIONS DURING THE INITIAL REPORTING STAGE 301 11. TOC MINUTE DELAY CALCULATIONS DURING THE BREACH REPORTING STAGE .................................................................................................... 302 12. TOC MINUTE DELAY CALCULATIONS DURING THE SUBSEQUENT REPORTING STAGE .................................................................................................... 302 13. NOT USED. .............................................................................................. 303 14. NOT USED. .............................................................................................. 303 15. SHORT FORMATIONS ................................................................................ 304 16. CALCULATIONS ........................................................................................ 305 17. SERVICE RECOVERY PLANS AND FORCE MAJEURE ........................................ 306 18. CONSEQUENCES FOR POOR PERFORMANCE – BENCHMARKS ......................... 306 19. ANNUAL CANCELLATIONS CALCULATIONS................................................... 307 20. ANNUAL TOC MINUTE DELAY CALCULATIONS .............................................. 307 21. ANNUAL SHORT FORMATION CALCULATIONS .............................................. 308 22. PERFORMANCE SUM PAYMENTS – ANNUAL BENCHMARKS AND ANNUAL MEASURES .............................................................................................. 308 23. DETERMINATION OF THE ANNUAL BENCHMARKS AND ANNUAL MEASURES FOR FRANCHISEE YEARS THAT ARE LESS THAN THIRTEEN REPORTING PERIODS BUT ARE SIX (6) REPORTING PERIODS OR MORE ............................................... 319 24. DETERMINATION OF THE ACTUAL CASL PERFORMANCE LEVEL AND THE ACTUAL PPM PERFORMANCE LEVEL FOR FRANCHISEE YEARS THAT ARE LESS THAN 13 REPORTING PERIODS BUT ARE SIX (6) REPORTING PERIODS OR MORE. ........ 322 25. NETWORK RAIL CLAIM .............................................................................. 323 26. CONSEQUENCES FOR POOR PERFORMANCE – ANNUAL BENCHMARKS AND ANNUAL MEASURES.................................................................................. 323 27. PAYMENTS MADE BY SECRETARY OF STATE................................................. 325 28. NOT USED ............................................................................................... 325 29. PAYMENTS IN RESPECT OF THE FINAL FRANCHISEE YEAR ............................. 325 30. ALLOCATION OF DISPUTED CANCELLATIONS/DISPUTED PARTIAL CANCELLATIONS ...................................................................................... 326 31. ALLOCATION OF DISPUTED MINUTES DELAY ............................................... 327 APPENDIX 1 TO SCHEDULE 7.1 ....................................................................... 329 CANCELLATIONS BENCHMARKS AND ANNUAL CANCELLATIONS BENCHMARKS .......... 329 PART 1 - CANCELLATIONS BENCHMARK TABLE ...................................................... 329 PART 2 - ANNUAL CANCELLATIONS BENCHMARK TABLE.......................................... 332 PART 3 - ANNUAL CANCELLATIONS PAYMENT TABLE .............................................. 333 APPENDIX 2 TO SCHEDULE 7.1 ....................................................................... 334 TOC MINUTE DELAY BENCHMARKS AND ANNUAL TOC MINUTE DELAY BENCHMARKS .. 334 PART 1 - TOC MINUTE DELAY BENCHMARK TABLE .................................................. 334 PART 2 - ANNUAL TOC MINUTE DELAY BENCHMARK TABLE ..................................... 337 PART 3 - ANNUAL TOC MINUTE DELAY PAYMENT TABLE .......................................... 338 APPENDIX 3 TO SCHEDULE 7.1 ....................................................................... 339 SHORT FORMATION BENCHMARKS AND ANNUAL SHORT FORMATION BENCHMARKS .. 339 PART 1 - SHORT FORMATION BENCHMARK TABLE .................................................. 339 PART 2 - ANNUAL SHORT FORMATION BENCHMARK TABLE ..................................... 342 South Western Franchise Page 8 of 634 Clauses 1-17 Agreement PART 3 - ANNUAL SHORT FORMATION PAYMENT TABLE .......................................... 343 APPENDIX 4 TO SCHEDULE 7.1 ....................................................................... 344 CASL MEASURE .................................................................................................. 344 PART 1 - ANNUAL CASL TABLE ............................................................................. 344 PART 2 - ANNUAL CASL PAYMENT TABLE ............................................................... 345 APPENDIX 5 TO SCHEDULE 7.1 ....................................................................... 346 PPM MEASURE ................................................................................................... 346 PART 1 - ANNUAL PPM TABLE .............................................................................. 346 PART 2 - ANNUAL PPM PAYMENT TABLE ................................................................ 347 SCHEDULE 7.2 ................................................................................................ 348 NATIONAL RAIL PASSENGER SURVEYS, CUSTOMER REPORT AND CCIF SCHEME .......................................................................................................... 348 1. DEFINITIONS........................................................................................... 348 2. CONDUCT OF NATIONAL RAIL PASSENGER SURVEYS.................................... 349 3. NRPS BENCHMARKS ................................................................................. 350 4. PERFORMANCE REVIEW ............................................................................ 350 5. REQUIRED IMPROVEMENT AND NRPS ACTION PLANS ................................... 351 6. ADDITIONAL EXPENDITURE ....................................................................... 351 7. PAYMENTS ON TERMINATION .................................................................... 352 8. CONSULTATIONS ..................................................................................... 352 9. CUSTOMER AND STAKEHOLDER ENGAGEMENT STRATEGY ............................ 352 10. CUSTOMER REPORT.................................................................................. 353 11. CCIF SCHEME .......................................................................................... 354 12. CUSTOMER SERVICE AND SATISFACTION DATA........................................... 356 APPENDIX 1 TO SCHEDULE 7.2 ....................................................................... 358 NRPS BENCHMARK TABLE ................................................................................... 358 SCHEDULE 7.3 ................................................................................................ 361 NOT USED....................................................................................................... 361 SCHEDULE 8 ................................................................................................... 362 PAYMENTS...................................................................................................... 362 SCHEDULE 8.1 ................................................................................................ 363 FRANCHISE PAYMENTS .................................................................................. 363 1. FRANCHISE PAYMENTS ............................................................................. 363 2. PAYMENT OF FRANCHISE PAYMENTS .......................................................... 367 3. INTEREST................................................................................................ 367 4. DISPUTES UNDER SCHEDULE 8 ................................................................. 368 5. INDUSTRIAL ACTION ................................................................................ 368 6. NO DOUBLE RECOVERY ............................................................................. 368 APPENDIX 1 TO SCHEDULE 8.1 ....................................................................... 369 ANNUAL FRANCHISE PAYMENTS ........................................................................... 369 APPENDIX 2 TO SCHEDULE 8.1 ....................................................................... 372 FIGURES FOR CALCULATION OF ANNUAL FRANCHISE PAYMENTS ............................. 372 SCHEDULE 8.2 ................................................................................................ 374 PROFIT SHARE MECHANISM ........................................................................... 374 1. PROFIT SHARE ......................................................................................... 374 South Western Franchise Page 9 of 634 Clauses 1-17 Agreement 2. ADDITIONAL COMPENSATION OR SETTLEMENT PAYMENTS ........................... 380 3. RELEVANT PROFIT REPORT........................................................................ 381 4. PAYMENT OF PROFIT SHARE AND DETERMINATION BY THE SECRETARY OF STATE..................................................................................................... 382 APPENDIX 1 TO SCHEDULE 8.2 ....................................................................... 383 PROFIT SHARE THRESHOLDS............................................................................... 383 APPENDIX 2 TO SCHEDULE 8.2 ....................................................................... 385 COMPONENTS OF AFA AND DFR ........................................................................... 385 SCHEDULE 8.3 ................................................................................................ 386 TRACK ACCESS ADJUSTMENTS AND STATION CHARGE ADJUSTMENTS ........... 386 1. TRACK ACCESS ADJUSTMENTS .................................................................. 386 2. STATION CHARGE ADJUSTMENT ................................................................ 388 SCHEDULE 8.4 ................................................................................................ 390 GDP ADJUSTMENT PAYMENTS ........................................................................ 390 1. PURPOSE AND APPLICATION OF SCHEDULE ................................................ 390 2. DEFINITIONS........................................................................................... 390 3. GDP ADJUSTMENT PAYMENT ...................................................................... 391 4. GDP ADJUSTMENT PAYMENTS (GDPA) ........................................................ 392 5. GDP RECONCILIATION PAYMENTS (GDPR AND GDPR ) ................................ 394 1 2 6. FINAL ADJUSTMENTS/RECONCILIATIONS .................................................... 395 APPENDIX 1 TO SCHEDULE 8.4 ....................................................................... 397 DFT RW ........................................................................................................ 397 GDP APPENDIX 2 TO SCHEDULE 8.4 ....................................................................... 398 ADJUSTED TARGET GDP INDEX ............................................................................ 398 SCHEDULE 8.5 ................................................................................................ 399 CLE ADJUSTMENT PAYMENTS ......................................................................... 399 1. PURPOSE AND APPLICATION OF SCHEDULE ................................................ 399 2. DEFINITIONS........................................................................................... 399 3. CLE ADJUSTMENT PAYMENT ...................................................................... 400 4. CLE ADJUSTMENT PAYMENTS (CLEA) .......................................................... 401 5. CLE RECONCILIATION PAYMENT (CLER) ...................................................... 403 6. FINAL ADJUSTMENTS/RECONCILIATIONS .................................................... 404 APPENDIX 1 TO SCHEDULE 8.5 ....................................................................... 405 DFT RW ........................................................................................................ 405 CLE APPENDIX 2 TO SCHEDULE 8.5 ....................................................................... 406 ADJUSTED TARGET CLE INDEX ............................................................................ 406 SCHEDULE 9.1 ................................................................................................ 408 FINANCIAL AND OTHER CONSEQUENCES OF CHANGE .................................... 408 1. PURPOSE AND APPLICATION OF SCHEDULE ................................................ 408 2. TIMESCALES ............................................................................................ 409 3. HOW ANY ADJUSTMENTS TO FRANCHISE PAYMENTS WILL BE ESTABLISHED... 409 4. HOW MODEL CHANGES AND/OR REVISED INPUTS WILL BE ESTABLISHED ...... 410 5. CHANGES TO BENCHMARKS AND/OR ANNUAL BENCHMARKS ........................ 410 6. RUN OF THE FINANCIAL MODEL FOLLOWING AGREEMENT OR DETERMINATION OF THE REVISED INPUTS AND MODEL CHANGES ......................................... 411 South Western Franchise Page 10 of 634 Clauses 1-17 Agreement

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(B). The Secretary of State wishes to appoint a franchisee to provide railway passenger services within the Franchise and expects his franchisee, on the terms of the. Franchise Agreement, actively to seek, in all reasonable business ways, greatly improved performance over the Franchise Term from it
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South Western franchise agreement PDF

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Dated [INSERT DATE] (1) The Secretary of State for Transport (2) [INSERT NAME OF FRANCHISEE] SOUTH WESTERN FRANCHISE AGREEMENT South Western Franchise Page 1 of 634 Agreement TABLE OF CONTENTS Clauses 1. INTERPRETATION ...................................................................................... 17 2. AGREED DOCUMENTS ................................................................................ 20 3. DEFINITIONS............................................................................................ 21 4. COMMENCEMENT ..................................................................................... 107 5. DURATION OF THE FRANCHISE AGREEMENT ............................................... 108 6. GENERAL OBLIGATIONS............................................................................ 109 7. ASSIGNMENT........................................................................................... 110 8. CHANGE OF CONTROL AND FACILITATION FEE ............................................ 110 9. COMPLIANCE WITH LAWS ......................................................................... 111 10. CUMULATIVE RIGHTS AND REMEDIES ........................................................ 111 11. DISPUTE RESOLUTION PROCEDURE ........................................................... 111 12. NOTICES ................................................................................................. 113 13. SET-OFF.................................................................................................. 114 14. MISCELLANEOUS PROVISIONS .................................................................. 115 15. COMPETITION .......................................................................................... 117 16. ENTIRE AGREEMENT ................................................................................. 118 17. GOVERNING LAW AND JURISDICTION ........................................................ 119 SCHEDULE 1 - PASSENGER SERVICE OBLIGATIONS........................................ 121 SCHEDULE 1.1 ................................................................................................ 122 FRANCHISE SERVICES AND SERVICE DEVELOPMENT ..................................... 122 PART 1 - FRANCHISE SERVICES ........................................................................... 122 1. FRANCHISE SERVICES .............................................................................. 122 2. RESTRICTIONS RELATING TO FRANCHISE SERVICES.................................... 122 3. RESTRICTIONS ON CLOSURES OF RAILWAY PASSENGER SERVICES OR RAILWAY FACILITIES .............................................................................................. 124 4. SUBCONTRACTING ANY PASSENGER SERVICES ........................................... 124 5. STATION SERVICES .................................................................................. 125 6. LIGHT MAINTENANCE SERVICES ................................................................ 125 7. ANCILLARY SERVICES ............................................................................... 126 8. ROYAL TRAIN........................................................................................... 128 PART 2 - SERVICE DEVELOPMENT ........................................................................ 130 9. TRAIN SERVICE SPECIFICATION - PURPOSE AND RESPONSIBILITY ................ 130 10. TRAIN PLAN............................................................................................. 130 11. CONSULTATION ON SIGNIFICANT ALTERATIONS TO THE TIMETABLE ............. 131 12. TIMETABLE DEVELOPMENT RIGHTS ............................................................ 132 13. CERTIFICATION AND NOTIFICATION BY FRANCHISEE OF EXERCISING TIMETABLE DEVELOPMENT RIGHTS ............................................................................. 135 14. PLANNING TO MEET TARGET PASSENGER DEMAND ...................................... 136 15. CAPACITY MITIGATION PLAN ..................................................................... 138 16. NEW OR AMENDED TRAIN SERVICE SPECIFICATION BY THE SECRETARY OF STATE AND FRANCHISEE INFORMED OPINION ............................................. 139 17. PROCEDURAL ARRANGEMENTS AND TIMESCALES ........................................ 141 South Western Franchise Page 2 of 634 Clauses 1-17 Agreement 18. OBLIGATIONS IN RELATION TO OTHER TRAIN OPERATORS ........................... 142 19. PROVISIONS RELATING TO ACCESS AGREEMENTS AND PROPERTY LEASES .... 142 20. THE TIMETABLE AND NETWORK RAIL'S WORKING TIMETABLE ....................... 143 SCHEDULE 1.2 ................................................................................................ 144 OPERATING OBLIGATIONS ............................................................................. 144 1. DAILY OPERATING OBLIGATIONS ............................................................... 144 2. TIMETABLING AND TRAIN PLANNING COMPLIANCE INVESTIGATION .............. 144 3. TIMETABLE CHANGES PROPOSED BY NETWORK RAIL ................................... 146 4. TIMETABLE CHANGES PROPOSED BY THE FRANCHISEE ................................ 146 5. TIMETABLE CHANGES REQUESTED BY THE SECRETARY OF STATE ................. 147 6. OBLIGATIONS OF THE FRANCHISEE IN THE EVENT OF DISRUPTION TO RAILWAY PASSENGER SERVICES ............................................................................. 147 7. OBLIGATION TO USE ALL REASONABLE ENDEAVOURS UNDER THIS SCHEDULE 1.2 ......................................................................................... 148 SCHEDULE 1.3 ................................................................................................ 152 NOT USED....................................................................................................... 152 SCHEDULE 1.4 ................................................................................................ 153 PASSENGER FACING OBLIGATIONS................................................................ 153 1. PUBLISHING THE TIMETABLE..................................................................... 153 2. COMMUNICATING LATE TIMETABLE CHANGES ............................................. 154 3. FARES SELLING RESTRICTIONS ................................................................. 155 4. PASSENGER'S CHARTER ............................................................................ 157 5. END TO END JOURNEYS AND CYCLES......................................................... 159 6. STATUTORY NOTICES ............................................................................... 159 7. TRAIN AND STATION CLEANING ................................................................ 159 8. PUBLICATION OF PERFORMANCE DATA ....................................................... 160 9. PUBLICATION OF COMPLAINTS AND FAULTS HANDLING DATA....................... 161 SCHEDULE 1.5 ................................................................................................ 163 INFORMATION ABOUT PASSENGERS .............................................................. 163 1. PASSENGER NUMBERS INFORMATION ........................................................ 163 2. MANUAL PASSENGER COUNTS ................................................................... 164 3. TECHNOLOGY FOR OBTAINING THE INFORMATION REFERRED TO IN PARAGRAPH 1.2 ....................................................................................... 165 4. CRM DATA ............................................................................................... 165 5. YIELD MANAGEMENT DATA ........................................................................ 166 6. PERSONAL DATA - GENERAL PROVISIONS................................................... 166 7. RAIL PASSENGER COUNTS DATABASE ........................................................ 168 8. INTELLECTUAL PROPERTY RIGHTS AND GENERAL PROVISIONS ..................... 170 SCHEDULE 1.6 ................................................................................................ 173 THE ROLLING STOCK ...................................................................................... 173 1. PURPOSE ................................................................................................ 173 2. THE COMPOSITION OF THE TRAIN FLEET .................................................... 173 3. CHANGES TO THE TRAIN FLEET ................................................................. 174 4. ROLLING STOCK TESTING AND COMMISSIONING ........................................ 175 5. CONTROLLED EMISSION TOILETS .............................................................. 175 South Western Franchise Page 3 of 634 Clauses 1-17 Agreement 6. BABY CHANGING FACILITIES ..................................................................... 175 7. METERED TRAIN OPERATOR STATUS .......................................................... 175 APPENDIX 1 TO SCHEDULE 1.6 ....................................................................... 177 SCHEDULE 1.7 ................................................................................................ 179 STATIONS ...................................................................................................... 179 1. STATION ASSET MANAGEMENT .................................................................. 179 2. GREY ASSETS .......................................................................................... 182 3. STATION SOCIAL AND COMMERCIAL DEVELOPMENT PLAN ............................ 183 4. CONSULTATIONS ..................................................................................... 184 5. NOT USED ............................................................................................... 184 6. SECURITY AT STATIONS ........................................................................... 184 7. INFORMATION ABOUT STATION IMPROVEMENT MEASURES........................... 185 8. NOT USED ............................................................................................... 186 9. STATION INVESTMENT.............................................................................. 186 APPENDIX 1 TO SCHEDULE 1.7 ....................................................................... 187 LIST OF STATIONS AND CAR PARKS WITH SECURE STATIONS ACCREDITATION AND SECURE CAR PARKS ACCREDITATION ................................................................... 187 APPENDIX 2 TO SCHEDULE 1.7 ....................................................................... 193 INFORMATION ABOUT STATION IMPROVEMENT MEASURES..................................... 193 APPENDIX 3 TO SCHEDULE 1.7 ....................................................................... 194 NOT USED....................................................................................................... 194 APPENDIX 4 TO SCHEDULE 1.7 ....................................................................... 195 NOT USED....................................................................................................... 195 SCHEDULE 2 - ASSETS, LEASES, OTHER FRANCHISEES AND SCHEMES ........... 196 SCHEDULE 2.1 ................................................................................................ 197 ASSET VESTING AND TRANSFER..................................................................... 197 1. NOT USED ............................................................................................... 197 2. VESTING OF PROPERTY LEASES DURING THE FRANCHISE TERM .................... 197 SCHEDULE 2.2 ................................................................................................ 199 SECURITY OF ACCESS AGREEMENTS, ROLLING STOCK LEASES, STATION AND DEPOT LEASES ............................................................................................... 199 1. NOVATION OF ACCESS AGREEMENTS DURING THE FRANCHISE TERM ............ 199 2. ROLLING STOCK RELATED CONTRACTS AND INSURANCE ARRANGEMENTS ..... 200 3. CASCADED ROLLING STOCK AND DELAYED CASCADE MITIGATION PLAN........ 201 4. ASSIGNMENT OF PROPERTY LEASES DURING THE FRANCHISE TERM ............. 203 5. STATION AND DEPOT LEASES .................................................................... 204 6. STATION SUBLEASES ............................................................................... 205 SCHEDULE 2.3 ................................................................................................ 206 OTHER FRANCHISEES ..................................................................................... 206 1. OTHER FRANCHISEES ............................................................................... 206 SCHEDULE 2.4 ................................................................................................ 207 NOT USED....................................................................................................... 207 SCHEDULE 2.5 ................................................................................................ 208 TRANSPORT, TRAVEL AND OTHER SCHEMES................................................... 208 1. LOCAL AUTHORITY CONCESSIONARY TRAVEL SCHEMES ............................... 208 South Western Franchise Page 4 of 634 Clauses 1-17 Agreement 2. MULTI-MODAL FARES SCHEMES ................................................................. 209 3. DISCOUNT FARE SCHEMES........................................................................ 211 4. INTER-OPERATOR SCHEMES ...................................................................... 211 APPENDIX 1 TO SCHEDULE 2.5 ....................................................................... 212 LIST OF TRANSPORT, TRAVEL AND OTHER SCHEMES ............................................. 212 SCHEDULE 3 ................................................................................................... 214 NOT USED....................................................................................................... 214 SCHEDULE 4 ................................................................................................... 215 ACCESSIBILITY AND INCLUSIVITY ................................................................ 215 1. RELATIONSHIP WITH OTHER OBLIGATIONS RELATING TO PERSONS WITH DISABILITIES .......................................................................................... 216 2. PHYSICAL ALTERATIONS AND ACCESSIBILITY OF STATIONS ......................... 216 3. DEALING WITH CLAIMS RELATING TO STATIONS ......................................... 219 4. SPECIFIC ADDITIONAL OBLIGATIONS RELATING TO PERSONS WITH DISABILITIES .......................................................................................... 220 APPENDIX 1 TO SCHEDULE 4 .......................................................................... 222 MINOR WORKS .................................................................................................. 222 APPENDIX 2 TO SCHEDULE 4 .......................................................................... 223 ACCESSIBLE TRANSPORT ARRANGEMENTS ........................................................... 223 SCHEDULE 5 ................................................................................................... 224 FARES AND TICKETING .................................................................................. 224 SCHEDULE 5.1 ................................................................................................ 225 PURPOSE, STRUCTURE AND CONSTRUCTION ................................................. 225 1. PURPOSE OF SCHEDULE 5 ......................................................................... 225 2. STRUCTURE OF SCHEDULE 5 ..................................................................... 226 3. CONSTRUCTION ....................................................................................... 226 SCHEDULE 5.2 ................................................................................................ 228 FRANCHISEE'S OBLIGATION TO CREATE FARES ............................................. 228 1. CREATION OF COMMUTER FARES AND PROTECTED FARES ............................ 228 2. RESTRICTIONS ON CREATION OF FARES .................................................... 228 SCHEDULE 5.3 ................................................................................................ 229 ALLOCATION OF FARES TO FARES BASKETS ................................................... 229 1. ALLOCATION OF FARES TO FARES BASKETS ................................................ 229 2. DESIGNATION OF NON FARES BASKET FARES ............................................. 229 SCHEDULE 5.4 ................................................................................................ 231 REGULATION OF FARES BASKET VALUES ........................................................ 231 1. VALUE OF FARES BASKET NOT TO EXCEED REGULATED VALUE ..................... 231 2. VALUE .................................................................................................... 231 3. PROJECTED REVENUE ............................................................................... 231 4. REGULATED VALUE................................................................................... 231 SCHEDULE 5.5 ................................................................................................ 233 REGULATION OF INDIVIDUAL FARES ............................................................. 233 1. PRICE OR CHILD PRICE NOT TO EXCEED REGULATED PRICE OR REGULATED CHILD PRICE ........................................................................................... 233 2. REGULATED PRICE ................................................................................... 233 South Western Franchise Page 5 of 634 Clauses 1-17 Agreement 3. COMPULSORY INTER AVAILABLE FLOWS ..................................................... 234 SCHEDULE 5.6 ................................................................................................ 235 EXCEEDING THE REGULATED VALUE, REGULATED PRICE OR REGULATED CHILD PRICE 235 1. EXCEEDING THE REGULATED VALUE .......................................................... 235 2. EXCEEDING THE REGULATED PRICE OR REGULATED CHILD PRICE ................. 236 SCHEDULE 5.7 ................................................................................................ 237 CHANGES TO FARES AND FARES REGULATION ............................................... 237 1. CHANGES TO FARES BASKETS ................................................................... 237 2. CHANGES TO THE 2010 NOMINAL TICKET SALES ......................................... 238 3. CHANGES TO THE REFERENCE REVENUE, GROSS REVENUE, 2010 NOMINAL TICKET SALES AND/OR 2010 TICKET REVENUE ........................................... 238 4. CHANGES TO PRICES................................................................................ 239 5. CHANGES TO FARES REGULATION ............................................................. 239 6. CHANGES TO COMPULSORY INTER AVAILABLE FLOWS ................................. 239 7. CHANGE OF LEAD OPERATOR/MAJOR FLOW OPERATOR ................................ 240 8. CHANGES TO FARES DOCUMENTS .............................................................. 240 SCHEDULE 5.8 ................................................................................................ 241 FARES REGULATION INFORMATION AND MONITORING ................................. 241 1. INFORMATION ......................................................................................... 241 2. MONITORING........................................................................................... 241 SCHEDULE 5.9 ................................................................................................ 242 SMART TICKETING ......................................................................................... 242 1. SMART TICKETING ................................................................................... 242 SCHEDULE 6 ................................................................................................... 244 FRANCHISE SPECIFIC OBLIGATIONS AND COMMITTED OBLIGATIONS .......... 244 SCHEDULE 6.1 ................................................................................................ 245 FRANCHISE SPECIFIC OBLIGATIONS ............................................................. 245 1. CROSSRAIL ............................................................................................. 245 2. DIGITAL RAILWAY PROGRAMME ................................................................. 247 3. CROSSRAIL 2 .......................................................................................... 248 4. HEATHROW SOUTHERN ACCESS ................................................................ 248 5. CREATION OF AN ISLAND LINE BUSINESS UNIT AND COOPERATION.............. 248 6. ISLAND LINE CCIF SCHEME ....................................................................... 250 7. STATION IMPROVEMENTS ......................................................................... 252 8. STATUS OF GUILDFORD AND CLAPHAM JUNCTION STATIONS ....................... 253 9. POTENTIAL DEVOLUTION TO TRANSPORT FOR LONDON ............................... 254 10. TRANSFER OF STATIONS FROM THE GREAT WESTERN FRANCHISE ................ 255 11. REPORT ON OPTIMISATION OF PASSENGER SERVICES ON SPECIFIED ROUTES .................................................................................................. 256 12. AUTOMATIC SELECTIVE DOOR OPENING CAPABILITY OF THE TRAIN FLEET ..... 257 13. TSS ENHANCEMENT SERVICES .................................................................. 257 14. INFRASTRUCTURE PROJECTS..................................................................... 259 15. BOXING DAY SERVICES ............................................................................ 261 16. DEPOT AND STABLING WORKS AND WATERLOO INTERNATIONAL “FIT OUT” ... 261 South Western Franchise Page 6 of 634 Clauses 1-17 Agreement 17. CO-OPERATION WITH NETWORK RAIL AND THE PREVIOUS FRANCHISEE IN RELATION TO THE DEPOT AND STABLING WORKS ....................................... 265 18. ACQUISITION OF CP5 ROLLING STOCK ....................................................... 266 19. INTRODUCTION INTO PASSENGER SERVICE OF CP5 ROLLING STOCK ............ 271 20. GAUGING RISK ........................................................................................ 273 21. PROJECT MANAGEMENT ............................................................................ 277 22. CLASS 158 UNIT ...................................................................................... 279 23. WATERLOO INTERNATIONAL LEASE CHARGE FRANCHISE PAYMENT ADJUSTMENTS ......................................................................................... 279 APPENDIX 1 TO SCHEDULE 6.1 ....................................................................... 282 PART 1 - SOUTH WEST CORE NETWORK ............................................................... 282 PART 2 - SOUTH WEST OUTER NETWORK ............................................................. 284 SCHEDULE 6.2 ................................................................................................ 285 COMMITTED OBLIGATIONS ............................................................................ 285 PART 1 - COMMITTED OBLIGATIONS .................................................................... 285 PART 2 - SPECIAL TERMS RELATED TO COMMITTED OBLIGATIONS .......................... 286 1. CONTINUATION OF AVAILABILITY .............................................................. 286 2. EXPENDITURE COMMITMENTS ................................................................... 286 3. LIAISON AND CO-OPERATION.................................................................... 287 4. NATURE OF COMMITMENT ......................................................................... 287 5. REVIEW OF COMPLIANCE .......................................................................... 288 6. REMEDY FOR LATE COMPLETION OR NON-DELIVERY OF COMMITTED OBLIGATIONS .......................................................................................... 288 7. SPECIMEN SCHEMES ................................................................................ 288 8. THIRD PARTY CONSENTS, AGREEMENT AND CONDITIONS ............................ 288 9. DEFINITION OF “ALL REASONABLE ENDEAVOURS” OR “REASONABLE ENDEAVOURS” ......................................................................................... 289 10. DESIGNATION OF ASSETS COMPRISED IN COS AS PRIMARY FRANCHISE ASSETS .................................................................................................. 289 SCHEDULE 6.3 ................................................................................................ 291 NOT USED....................................................................................................... 291 SCHEDULE 7 ................................................................................................... 292 PERFORMANCE BENCHMARKS ........................................................................ 292 SCHEDULE 7.1 ................................................................................................ 293 OPERATIONAL PERFORMANCE ....................................................................... 293 1. DEFINITIONS, CHANGES TO BENCHMARKS AND ANNUAL BENCHMARKS AND NOTICE OF PERFORMANCE RESULTS .......................................................... 293 2. REPORTING REQUIREMENTS ..................................................................... 299 PART A – NON-FINANCIAL ENFORCEMENT REGIME................................................. 300 3. CANCELLATION CALCULATION: VALUE OF A ................................................ 300 4. CANCELLATION CALCULATIONS DURING THE INITIAL REPORTING STAGE ...... 300 5. CANCELLATION CALCULATION DURING THE BREACH REPORTING STAGE ....... 301 6. CANCELLATION CALCULATIONS DURING THE SUBSEQUENT REPORTING STAGE .................................................................................................... 301 7. NOT USED. .............................................................................................. 301 8 NOT USED. .............................................................................................. 301 South Western Franchise Page 7 of 634 Clauses 1-17 Agreement 9. NOT USED. .............................................................................................. 301 10. TOC MINUTE DELAY CALCULATIONS DURING THE INITIAL REPORTING STAGE 301 11. TOC MINUTE DELAY CALCULATIONS DURING THE BREACH REPORTING STAGE .................................................................................................... 302 12. TOC MINUTE DELAY CALCULATIONS DURING THE SUBSEQUENT REPORTING STAGE .................................................................................................... 302 13. NOT USED. .............................................................................................. 303 14. NOT USED. .............................................................................................. 303 15. SHORT FORMATIONS ................................................................................ 304 16. CALCULATIONS ........................................................................................ 305 17. SERVICE RECOVERY PLANS AND FORCE MAJEURE ........................................ 306 18. CONSEQUENCES FOR POOR PERFORMANCE – BENCHMARKS ......................... 306 19. ANNUAL CANCELLATIONS CALCULATIONS................................................... 307 20. ANNUAL TOC MINUTE DELAY CALCULATIONS .............................................. 307 21. ANNUAL SHORT FORMATION CALCULATIONS .............................................. 308 22. PERFORMANCE SUM PAYMENTS – ANNUAL BENCHMARKS AND ANNUAL MEASURES .............................................................................................. 308 23. DETERMINATION OF THE ANNUAL BENCHMARKS AND ANNUAL MEASURES FOR FRANCHISEE YEARS THAT ARE LESS THAN THIRTEEN REPORTING PERIODS BUT ARE SIX (6) REPORTING PERIODS OR MORE ............................................... 319 24. DETERMINATION OF THE ACTUAL CASL PERFORMANCE LEVEL AND THE ACTUAL PPM PERFORMANCE LEVEL FOR FRANCHISEE YEARS THAT ARE LESS THAN 13 REPORTING PERIODS BUT ARE SIX (6) REPORTING PERIODS OR MORE. ........ 322 25. NETWORK RAIL CLAIM .............................................................................. 323 26. CONSEQUENCES FOR POOR PERFORMANCE – ANNUAL BENCHMARKS AND ANNUAL MEASURES.................................................................................. 323 27. PAYMENTS MADE BY SECRETARY OF STATE................................................. 325 28. NOT USED ............................................................................................... 325 29. PAYMENTS IN RESPECT OF THE FINAL FRANCHISEE YEAR ............................. 325 30. ALLOCATION OF DISPUTED CANCELLATIONS/DISPUTED PARTIAL CANCELLATIONS ...................................................................................... 326 31. ALLOCATION OF DISPUTED MINUTES DELAY ............................................... 327 APPENDIX 1 TO SCHEDULE 7.1 ....................................................................... 329 CANCELLATIONS BENCHMARKS AND ANNUAL CANCELLATIONS BENCHMARKS .......... 329 PART 1 - CANCELLATIONS BENCHMARK TABLE ...................................................... 329 PART 2 - ANNUAL CANCELLATIONS BENCHMARK TABLE.......................................... 332 PART 3 - ANNUAL CANCELLATIONS PAYMENT TABLE .............................................. 333 APPENDIX 2 TO SCHEDULE 7.1 ....................................................................... 334 TOC MINUTE DELAY BENCHMARKS AND ANNUAL TOC MINUTE DELAY BENCHMARKS .. 334 PART 1 - TOC MINUTE DELAY BENCHMARK TABLE .................................................. 334 PART 2 - ANNUAL TOC MINUTE DELAY BENCHMARK TABLE ..................................... 337 PART 3 - ANNUAL TOC MINUTE DELAY PAYMENT TABLE .......................................... 338 APPENDIX 3 TO SCHEDULE 7.1 ....................................................................... 339 SHORT FORMATION BENCHMARKS AND ANNUAL SHORT FORMATION BENCHMARKS .. 339 PART 1 - SHORT FORMATION BENCHMARK TABLE .................................................. 339 PART 2 - ANNUAL SHORT FORMATION BENCHMARK TABLE ..................................... 342 South Western Franchise Page 8 of 634 Clauses 1-17 Agreement PART 3 - ANNUAL SHORT FORMATION PAYMENT TABLE .......................................... 343 APPENDIX 4 TO SCHEDULE 7.1 ....................................................................... 344 CASL MEASURE .................................................................................................. 344 PART 1 - ANNUAL CASL TABLE ............................................................................. 344 PART 2 - ANNUAL CASL PAYMENT TABLE ............................................................... 345 APPENDIX 5 TO SCHEDULE 7.1 ....................................................................... 346 PPM MEASURE ................................................................................................... 346 PART 1 - ANNUAL PPM TABLE .............................................................................. 346 PART 2 - ANNUAL PPM PAYMENT TABLE ................................................................ 347 SCHEDULE 7.2 ................................................................................................ 348 NATIONAL RAIL PASSENGER SURVEYS, CUSTOMER REPORT AND CCIF SCHEME .......................................................................................................... 348 1. DEFINITIONS........................................................................................... 348 2. CONDUCT OF NATIONAL RAIL PASSENGER SURVEYS.................................... 349 3. NRPS BENCHMARKS ................................................................................. 350 4. PERFORMANCE REVIEW ............................................................................ 350 5. REQUIRED IMPROVEMENT AND NRPS ACTION PLANS ................................... 351 6. ADDITIONAL EXPENDITURE ....................................................................... 351 7. PAYMENTS ON TERMINATION .................................................................... 352 8. CONSULTATIONS ..................................................................................... 352 9. CUSTOMER AND STAKEHOLDER ENGAGEMENT STRATEGY ............................ 352 10. CUSTOMER REPORT.................................................................................. 353 11. CCIF SCHEME .......................................................................................... 354 12. CUSTOMER SERVICE AND SATISFACTION DATA........................................... 356 APPENDIX 1 TO SCHEDULE 7.2 ....................................................................... 358 NRPS BENCHMARK TABLE ................................................................................... 358 SCHEDULE 7.3 ................................................................................................ 361 NOT USED....................................................................................................... 361 SCHEDULE 8 ................................................................................................... 362 PAYMENTS...................................................................................................... 362 SCHEDULE 8.1 ................................................................................................ 363 FRANCHISE PAYMENTS .................................................................................. 363 1. FRANCHISE PAYMENTS ............................................................................. 363 2. PAYMENT OF FRANCHISE PAYMENTS .......................................................... 367 3. INTEREST................................................................................................ 367 4. DISPUTES UNDER SCHEDULE 8 ................................................................. 368 5. INDUSTRIAL ACTION ................................................................................ 368 6. NO DOUBLE RECOVERY ............................................................................. 368 APPENDIX 1 TO SCHEDULE 8.1 ....................................................................... 369 ANNUAL FRANCHISE PAYMENTS ........................................................................... 369 APPENDIX 2 TO SCHEDULE 8.1 ....................................................................... 372 FIGURES FOR CALCULATION OF ANNUAL FRANCHISE PAYMENTS ............................. 372 SCHEDULE 8.2 ................................................................................................ 374 PROFIT SHARE MECHANISM ........................................................................... 374 1. PROFIT SHARE ......................................................................................... 374 South Western Franchise Page 9 of 634 Clauses 1-17 Agreement 2. ADDITIONAL COMPENSATION OR SETTLEMENT PAYMENTS ........................... 380 3. RELEVANT PROFIT REPORT........................................................................ 381 4. PAYMENT OF PROFIT SHARE AND DETERMINATION BY THE SECRETARY OF STATE..................................................................................................... 382 APPENDIX 1 TO SCHEDULE 8.2 ....................................................................... 383 PROFIT SHARE THRESHOLDS............................................................................... 383 APPENDIX 2 TO SCHEDULE 8.2 ....................................................................... 385 COMPONENTS OF AFA AND DFR ........................................................................... 385 SCHEDULE 8.3 ................................................................................................ 386 TRACK ACCESS ADJUSTMENTS AND STATION CHARGE ADJUSTMENTS ........... 386 1. TRACK ACCESS ADJUSTMENTS .................................................................. 386 2. STATION CHARGE ADJUSTMENT ................................................................ 388 SCHEDULE 8.4 ................................................................................................ 390 GDP ADJUSTMENT PAYMENTS ........................................................................ 390 1. PURPOSE AND APPLICATION OF SCHEDULE ................................................ 390 2. DEFINITIONS........................................................................................... 390 3. GDP ADJUSTMENT PAYMENT ...................................................................... 391 4. GDP ADJUSTMENT PAYMENTS (GDPA) ........................................................ 392 5. GDP RECONCILIATION PAYMENTS (GDPR AND GDPR ) ................................ 394 1 2 6. FINAL ADJUSTMENTS/RECONCILIATIONS .................................................... 395 APPENDIX 1 TO SCHEDULE 8.4 ....................................................................... 397 DFT RW ........................................................................................................ 397 GDP APPENDIX 2 TO SCHEDULE 8.4 ....................................................................... 398 ADJUSTED TARGET GDP INDEX ............................................................................ 398 SCHEDULE 8.5 ................................................................................................ 399 CLE ADJUSTMENT PAYMENTS ......................................................................... 399 1. PURPOSE AND APPLICATION OF SCHEDULE ................................................ 399 2. DEFINITIONS........................................................................................... 399 3. CLE ADJUSTMENT PAYMENT ...................................................................... 400 4. CLE ADJUSTMENT PAYMENTS (CLEA) .......................................................... 401 5. CLE RECONCILIATION PAYMENT (CLER) ...................................................... 403 6. FINAL ADJUSTMENTS/RECONCILIATIONS .................................................... 404 APPENDIX 1 TO SCHEDULE 8.5 ....................................................................... 405 DFT RW ........................................................................................................ 405 CLE APPENDIX 2 TO SCHEDULE 8.5 ....................................................................... 406 ADJUSTED TARGET CLE INDEX ............................................................................ 406 SCHEDULE 9.1 ................................................................................................ 408 FINANCIAL AND OTHER CONSEQUENCES OF CHANGE .................................... 408 1. PURPOSE AND APPLICATION OF SCHEDULE ................................................ 408 2. TIMESCALES ............................................................................................ 409 3. HOW ANY ADJUSTMENTS TO FRANCHISE PAYMENTS WILL BE ESTABLISHED... 409 4. HOW MODEL CHANGES AND/OR REVISED INPUTS WILL BE ESTABLISHED ...... 410 5. CHANGES TO BENCHMARKS AND/OR ANNUAL BENCHMARKS ........................ 410 6. RUN OF THE FINANCIAL MODEL FOLLOWING AGREEMENT OR DETERMINATION OF THE REVISED INPUTS AND MODEL CHANGES ......................................... 411 South Western Franchise Page 10 of 634 Clauses 1-17 Agreement

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(B). The Secretary of State wishes to appoint a franchisee to provide railway passenger services within the Franchise and expects his franchisee, on the terms of the. Franchise Agreement, actively to seek, in all reasonable business ways, greatly improved performance over the Franchise Term from it
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