7. Infrastructure charge and franchise fee

Measurement basis

Adjustment mechanisms for main rail network franchise

The implementation agreement with the Ministry of Infrastructure and Water Management includes a number of adjustment mechanisms for setting the franchise price. The adjustment relating to the average profitability during the franchise is recognised as a receivable at the time that, in accordance with the calculation method laid down in the implementation agreement, the entitlement arises. The adjustment is recognised on a straight-line basis over the franchise period. Other (one-off) payments under the agreement are recognised on a straight-line basis over the franchise period.

Adjustment mechanisms for UK train franchises

In the franchise agreements, mainly with Ministries of Transport (Department for Transport, Transport Scotland) and the infrastructure manager Network Rail, a number of adjustment mechanisms are included, including the one for ‘Central London Employment (CLE)’, with which the franchise fee can be adjusted. The CLE is an index that is adjusted annually, after which the franchise fee can be adjusted and accounted for by the Dft in the respective reporting year. The right to compensation for loss of income and the method of calculation are determined by contract and will be recognised in the year in which the loss occurred based on an estimated calculation.