199.Sections 211 to 222 describe the main functions and powers of the Authority, including ones transferred from the Franchising Director, the Rail Regulator, the Secretary of State and the British Railways Board (“BRB”).
200.Under section 211 the Authority has power to enter into agreements for the purpose of securing the provision, improvement or development by others of any railway services or assets or for any other railway related purpose. This includes a power to give grants, loans or guarantees for any purpose relating to any railway or railway services and to invest in a body corporate.
201.The section also provides certain restrictions on this power. Payments for franchised services may only be paid under the franchise agreement. In Scotland, the Authority will have no powers with regard to freight where something falls within a scheme which it has notified to the Scottish Ministers. These schemes (which are intended to replace the freight grants and track access guarantee schemes in sections 137 and 139 of the 1993 Act) will be administered in Scotland by Scottish Ministers only.
202.In this section “railway” means a railway, tramway or transport system, which uses another mode of guided transport but which is not a trolley vehicle system. This is what is meant by railway in “its wider meaning” (see subsection (6) of the section and section 81(2) of the 1993 Act.) The expression “railway”, “tramway” and “transport system” have, in turn, their meaning under section 67(1) of the Transport and Works Act 1992.
203.Section 211 would enable the Authority, for example, to:
	provide grants to local authorities (Passenger Transport Authorities (“PTAs”)) in support of railway services provided or funded by them (including such services provided under franchise agreements to which the relevant Passenger Transport Executive (“PTE”) is a party);
	fund the integration of light rapid transport systems with the heavy rail network and;
	make grants or enter into contracts in respect of the enhancement of railway infrastructure which is not commercially viable but in the public interest.
204.Grants to PTAs would provide a substitute for the special grant which the Secretary of State makes to them each year, under the general grant power in section 88B of the Local Government Act 1988. The power in section 211 is in addition to the Secretary of State’s power in section 157 to make such payments.
205.The power in section 211 relates to anything connected with railways as a mode of transport. It relates, for example, to anything connected with the type of railway services which are provided (such as networks, carriages, stations), the types of railway assets involved (such as network and trains) and facilities connected with railway travel (such as parking outside stations).
206.Schedule 15 provides a power to make a transfer scheme for the administration of grants for freight from the Secretary of State to the Authority.
207.Sections 212 and 213 govern the Authority’s powers to secure or provide railway services. The sections meet the commitment in A New Deal for Transport (paragraph 4.19) to retain the capability for the public sector to take over franchises “as a last resort” (for example, if a franchise was terminated or there were no acceptable private sector bids).
208.Section 212(1) and (2) make technical amendments to the Railways Act 1993 to facilitate franchising. The Authority is required to designate passenger services which ought to be secured by franchise unless they are exempt services and not merely to designate services which may be eligible for franchising. Section 212(6) enables the Regulator to refuse to grant access rights if they might impede the provision of a service which has been designated.
209.The Secretary of State is required to publish his policy towards the use of the power in section 26 of the Railways Act to set aside the tendering process which otherwise precedes the award of a franchise and to have regard to that policy when exercising that power. The Act also sets out the use that may be made of that power.
210.The section specifies the procedures which the Authority will need to follow before it can act as the operator of last resort for services which have been designated for franchising.
211.Where the Authority has issued an invitation to tender for services which have been designated for franchising but receives no tender at all, the Secretary of State may either direct the Authority to issue new invitations to tender or direct that the service should be secured otherwise than by a franchise (by the Authority or a private contractor).
212.Where the Authority has issued an invitation to tender for services which have been designated for franchising and has received tenders for a franchised service, but considers that the services could be provided more economically and efficiently other than by a franchise agreement, the Secretary of State is required either to direct the Authority to select a franchisee or to conduct a further tendering exercise. He may not, at this stage, direct the Authority not to seek to secure provision of a franchise under a franchise agreement. If a further tendering exercise results in no tenders, or tenders are received but the Authority remains of the view that services could be provided more economically or efficiently other than under a franchise agreement, the Secretary of State may, at this stage, direct the Authority not to award a franchise. Where tenders were received, the Secretary of State still has the option to direct the Authority to re-consider these.
213.Section 212 makes it clear that the Authority must provide services if a direction not to seek a franchise has been made by the Secretary of State or a franchise comes to an end or is terminated without a new agreement being in place. This duty remains until there is a new franchise, although it does not apply if there are already adequate services, nor does it prevent closure procedures.
214.Section 213 gives the Authority limited additional powers to run goods or undesignated passenger services where it acquires an obligation to provide that service in consequence of a former obligation of the BRB or they are no longer being provided by another person. It gives the Authority the necessary associated powers (such as storing goods) to run that service.
215.Section 214 confers on the Authority certain powers associated with passenger services – so that passengers can be transported by road during temporary disruptions to the rail service.
Commentary on Sections Part IV: Railways Chapter I: the Strategic Rail Authority Sections 211 to 222. Securing the provision of railway services and assets etc