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26.11.12

ORR publishes TOC costs and revenues

A new study on train operators’ costs and revenues has been published, to highlight and compare expenditure across franchises and over the years.

Operator costs accounted for 48% of total rail industry costs in 2010-11 and revenue now broadly matches their direct costs. Net subsidy paid from the DfT and Transport Scotland to the operators is now £20m, down from £2.3bn in 2006-07.

There are differences in the costs incurred by each TOC, which also vary when measured in a range of ways.

ORR’s director of markets and economics, Cathryn Ross, said: “This is the first time detailed analysis of the nineteen franchised train operating companies has been published. It has involved collaboration across a number of organisations, and I welcome the commitment to transparency and accountability made by the rail industry. This is a really important step in giving taxpayers and customers access to better information about what they are funding and paying for in relation to the services they are getting.

“The cost of running Britain’s railways is too high and this must be tackled by the industry as a whole. Exploring and understanding the key factors that drive each train operator’s costs is a very positive step in helping achieve greater efficiency.  Future reports will build on this analysis to examine how the specification of what is to be delivered in franchises contributes to costs, so that funders and the public have better information on what they are getting for their money.”   

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