Latest Rail News

17.05.16

Full Arriva integration of Northern halted over competition concerns

Arriva’s takeover of the Northern rail franchise has been temporarily halted by the Competition and Markets Authority (CMA) over concerns that it will threaten competition, creating a worse experience for passengers.

The CMA is still deciding whether to carry out a full-length investigation, but it has issued an enforcement order to prevent full integration of Northern and Arriva, which officially took over the business on 1 April.

The CMA raised concerns after an initial review found that, following the takeover, there would be little or no competition against Arriva on 38 train routes and 44 bus routes, leading to a risk of higher prices or poorer quality service on these routes.

Andrea Coscelli, executive director of markets and mergers at the CMA, said: “Arriva already runs significant existing train and bus operations in the area covered by Northern Rail. We have identified a number of services and routes where passengers have previously had a choice between competing operators, but which will now be run by Arriva.

“This situation could potentially lead to a rise in non-regulated fares for passengers so unless Arriva is able to offer suitable undertakings now, we intend to carry out an in-depth investigation to look in more detail at these concerns, and decide whether any remedies are required.”

Arriva operates CrossCountry, Chiltern, Arriva Trains Wales, Grand Central and the open access Alliance Rail service, as well as London Overground, Tyne and Wear Metro and 5,900 bus services.

The company must now offer proposals to resolve the competition concerns raised by the CMA this week.

If Arriva does not offer such undertakings, or the CMA does not accept them, the CMA will refer the Northern Rail franchise award for an in-depth phase 2 investigation.

TSSA warns of flaws in “the whole franchise system”

Manuel Cortes, general secretary of the TSSA, which opposed the Arriva takeover, said: “The whole franchise system is basically flawed because it creates local monopolies across different regions. We warned about Arriva getting this franchise and our predictions have come true.”

A spokesperson for Arriva said: “We note the Competition and Markets Authority’s announcement in relation to the Northern Rail franchise.

“We are already working closely with the Competition and Markets Authority to attempt to agree a package of measures to address any competition concerns they have and avoid a time-consuming phase two investigation.”

A DfT spokesperson added that Arriva is already serving rail passengers in the north and this announcement doesn’t change that.

“They are now working to address the CMA’s concerns,” he said. “It would not be appropriate to comment further while the CMA’s review is ongoing.”

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Comments

Fred Smith   17/05/2016 at 12:38

What utter nonsense. Are they being serious? What all the other franchises where there is little or no competition on all its services - for example the whole of South Eastern, Wessex, GTR, c2c, Greater Anglia. Also surely two government departments or even two government regulators confer over all this. A complete waste of money

Hugh   17/05/2016 at 13:16

What we are now seeing is the ongoing developments in the public transport industry. With a diminishing number of operators we are progressing towards a handful of companies running road and rail services. All have the same objective, maximise profit for the shareholders, receive subsidies to provide services for rural areas, and keep prices as high as possible. The case for renationalisation grows stronger by the month.

Nonsuchmike   17/05/2016 at 14:02

Ha, ha! Somebody has not done their homework before briefing the Ministers and the franchise decided upon! Which public body will the Government choose to be the fall guy this time? Or will it be the Unions' fault? Will that somebody be demoted, sacked or even reprimanded? Probably not; just quietly promoted to a post with a bigger salary but with less front line responsibility. Or retired with an inflation linked pension.

Gabriel Oaks   17/05/2016 at 16:40

I wonder if the CMA will require each and every railway station to be served by two different train operators.......

Roger Capel, Sheffield   18/05/2016 at 07:40

Fred, you're ignoring the bus services. Southeastern serves an area where buses are almost entirely Stagecoach. C2C's nearest NatEx bus service is in Coventry (!). By contrast, Northern's area covers Arriva Yorkshire (serving most of West Yorks & into the surrounding counties) & Arriva Northwest (serving Liverpool, down to Crewe & across to Manchester).

Joel   18/05/2016 at 10:13

The CMA's view may not be entirely unconnected with DB's decision to sell a significant stake in Arriva?

Martin T   19/05/2016 at 14:37

Manuel Cortes complains about "local monopolies" but he wants to see a national monopoly on all transport - that's what renationalisation of rail and bus adds up to.

Jim Browne   19/05/2016 at 22:45

It has been noticed that CMA didn't look into the fact that Virgin/Stagecoach now run the majority of train services between London & Scotland, so why are Arriva being checked by CMA, or is it that the owners of Virgin/Stagecoach paying lots of money into the tory party?

Phil Stevens   19/05/2016 at 23:40

Unbelievable, having gotten rid of the previous unsatisfactory Northern franchisees and appointing an outfit that is at least prepared to invest seriously in much needed rolling stock we are faced with another governmental farce. Unfortunately renationalisation is not an option with our current government so lets make the best of a bad job. Stagecoach control or have an interest in virtually all long distance road & rail between England and Scotland, West Coast, East Coast & Megabus yet not a word about investigating them. I smell a rat!

Bill Davies   20/05/2016 at 12:19

What about the monopoly Govia have in the South East ?? No open access operators interested there!!!!!'

Pdeaves   20/05/2016 at 13:01

The CMA is worried about a rise in non-regulated fares. Surely that is the reason that regulated fares exist.

Ray Penn   20/05/2016 at 15:21

The majority of the comments are ignoring the fact that Arriva is a huge bus service provider. Most of the big franchises are actually monopolies already. The mainline services don't have competition for those routes. Grand Central may cover York to London like VTEC but that us a rare exception. Where things are getting dodgy is companies like Arriva and Stagecoach that operate local bus services are trying to run local train services. The Northern Rail service from Middlesbrough to Whitby has only and Arriva bus service as competition. Arriva would have no doubt created a proposal to create an "integrated" service that would see local services reduced on both road and rail. This would also mean a reduction in Government subsidy and an appropriate reduction in quality.

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