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The Public Service Obligations in Transport Regulations 2023

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Duration of public service contracts

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9.—(1) Unless paragraph (2) or (3) applies, the duration of a public service contract must not exceed—

(a)10 years if the contract is awarded under regulation 17 (direct awards: rail), regulation 19 (direct award: rail due to structural and geographical characteristics) or regulation 20 (direct award: rail where operator manages the railway infrastructure);

(b)2 years if the contract is awarded, extended or imposed under regulation 16 (emergency measures);

(c)5 years, if the contract is awarded under regulation 18 (temporary direct award: rail);

(d)for any other contract—

(i)if transport by either rail or other track-based modes, or any combination of rail and other track-based modes, represents more than 50% of the value of the public passenger transport services, 15 years;

(ii)otherwise, 10 years.

(2) Subject to paragraphs (3) and (4), a public service contract may have a duration of up to 50% longer than the applicable period prescribed under paragraph (1) if the public service operator provides assets—

(a)which have an exceptionally long depreciation period justifying, in the opinion of the competent authority, such longer duration,

(b)which are significant in relation to the overall assets needed to carry out the passenger transport services covered by the public service contract, and

(c)which are linked predominantly to the passenger transport services covered by the contract.

(3) A public service contract may have a longer duration than is prescribed under paragraphs (1) and (2) if—

(a)in the opinion of the competent authority a longer duration is justified by the amortisation of capital in relation to exceptional levels of investment in infrastructure, rolling stock or vehicles, and

(b)the public service contract is awarded in a fair competitive tendering procedure.

(4) Paragraphs (2) and (3) do not apply to a contract made under regulation 16 (emergency measures) or regulation 18 (temporary direct awards).

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