325.Under section 196 the Authority will be able to issue instructions and guidance to the Franchising Director about the management of passenger rail franchises serving London. (Franchised rail services are passenger rail services operated under a franchise agreement between the Franchising Director and a train operating company.)  The instructions and guidance can cover services to, from and within Greater London, but the Franchising Director must not follow the guidance where to do so would prevent or seriously hinder him from complying with guidance issued to him by the Secretary of State or have an adverse impact on passenger services outside London or require the Franchising Director to make additional payments to franchise operators from his own budget.
326.Section 197 places the Franchising Director under a duty to consult the Mayor over proposed changes to service levels and fares on London rail services.
327.Section 198 amends LRT’s existing exemption under sections 7 and 20 (licence and facility exemptions) of the Railways Act 1993, to bring TfL, its subsidiaries and PPP companies within its scope. The Railways (London Regional Transport) (Exemptions) Order 1994, under that Act, grants an exemption to every LRT company from the requirement to be authorised by licence to be an operator of a network (or connected light maintenance depot or train) on which it is the exclusive operator.  It exempts LRT companies from the access  provisions of the Railways Act 1993 in respect of such networks, stations and light maintenance depots. And it also exempts all LRT railway passenger services from designation as eligible for franchising and all LRT services, networks, stations and light maintenance depots from the standard closure provisions.
328.Section 199 enables the Secretary of State to grant a new exemption under sections 7 and 20 of the Railways Act 1993.  He may make an exemption order, on the request of LRT or TfL, and in respect of a network on which some or all of the regular scheduled passenger services are operated by LRT or TfL. This allows for the possibility of future integration with the national network under arrangements which might not be covered by the current exemption, which presumes that London Transport and its subsidiaries are the exclusive operators of services using the Underground network.
329.Section 200 ensures that LRT and TfL will have the power to enter into agreements involving the Rail Regulator to meet any need relating to transport in and around London.
330.Section 201 restricts TfL’s ability to enter into direct agreements with franchised train operators so that the Mayor’s instructions and guidance to the Franchising Director will have to include any instructions in respect of additional railway services, and the Franchising Director will then procure the services on behalf of the Mayor.
331.Section 202 provides that, like local authorities across the country, the GLA and TfL will not be able to run franchised railway services on the national network.
Commentary on Sections Part Iv: Transport Chapter Vi - Railways Sections 196 and 197: The Authority and the Franchising Director