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16.10.15

RDG asks for more options to enhance competition in CMA franchise probe

The Rail Delivery Group (RDG) has called on the Competition and Markets Authority (CMA) to reassess whether the four options it put forth to radically reform the franchising system actually promote efficiency and benefit local communities.

In January, the CMA launched an examination to scope for increasing TOC competition in passenger rail services in order to improve service quality and value for money.

Seven months later, it published a consultation document inviting responses on four options for possible reform:

  • Option 1 – retaining the existing market structure, but with significantly increased open access operations
  • Option 2 – two franchisees for each franchise
  • Option 3 – more overlapping franchises
  • Option 4 – licensing multiple operators, subject to conditions (including public service obligations)
  • Source: Gov.uk

Rail industry leaders have now responded to the consultation, which closes today (16 October), by asking the CMA to test all options against how effectively they deliver service quality and capacity for passenger and freight, as well as promote efficiency and safety in the network.

They also questioned how each option would deliver wider benefits to the communities, economies and environment each network serves, and asked for further investigation into how each could be practically implemented.

The RDG claimed the CMA should also take into account a number of potentially significant reviews occurring in the industry currently, and, in light of these, should consider adding other options to respond more flexibly to passenger needs.

These new options would include changing franchise contracts and improving the access process and charging structure between Network Rail and train operators.

Michael Roberts, RDG director general, said: “Britain’s railway plays a crucial role in people’s daily lives and the wider economy, so it is important the industry continually considers how to harness the best aspects of competition to deliver even better services.

“The CMA has recognised the value delivered by the partnership between the public and private sectors in rail and suggests some alternative ways of structuring that successful formula.

“Alongside central and devolved governments and the regulator, this is a discussion in which the rail industry is actively engaged. We look forward to continuing to work with the CMA as it seeks to balance the opportunities for more competition in rail with the wider complexities and challenges of running this vital public service.”

Since announcing the probe in January, the CMA engaged in discussions with a wide range of stakeholders and liaised closely with the Office of Rail and Road.

It also hosted a round table meeting with franchisees and a separate meeting with open access operators and applicants – along with individually meeting TOC representatives, Network Rail, the freight industry, Transport Focus and other experts.

(Top image c. Alvey and Towers)

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