Rail franchises operators & contracts

16.12.16

ORR opens consultation on changes to TOC charges

Rail operators will be required to pay fixed charges from 2018 as part of new proposals from the ORR.

The ORR has previously said it supports a greater role for open access operators, who are at risk of being deterred by the cost of franchise bidding.

In the new consultation, it announced that it has chosen to recover fixed costs from all passenger operators, including open access operators, in PR18.

“This would represent a step forward in terms of transparency and cost reflectivity, and could facilitate more competition in passenger services,” the report says.

The ORR said the charges would be introduced following a ‘market can bear’ test to establish which passenger market segments could pay the charges.

It considered alternate options, where the amount operators pay is linked to their use of capacity or their access rights, but decided against them because they require too wide a scale of changes at this time.

However, the ORR noted that these alternate options could form part of a “longer term direction of travel”.

It said that costs linked to capacity utilisation could be introduced if a way to measure utilisation is introduced by the 2023 period review, while charges linked to access rights would only be appropriate if “significantly more open access services” were in operation.

For freight operators, the freight only line charge (FOL) and freight specific charge (FSC) will be combined. Furthermore, it proposed abolishing the coal spillage charge on freight operators because of downward trends in coal transport.

However, the ORR said it would not pursue fundamental reform of the variable use charge (VUC) because changes elsewhere, such as the move to increased route-based regulation, made it unnecessary.

It also wanted to consult on whether to either remove caps on the capacity charge or abolish it altogether, saying there were “good arguments” for changing the charge because it is too complex and does not offer sufficient incentives for Network Rail to grow traffic.

The consultation is open until 9 March. To take part, click here.

Have you got a story to tell? Would you like to become an RTM columnist? If so, click here 

Comments

There are no comments. Why not be the first?

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

Crucial work to link Bolton station and interchange hits milestone

25/04/2017Crucial work to link Bolton station and interchange hits milestone

Considerable progress has now been made on the project to upgrade Bolton’s transport interchange and build a new ‘skylink’ brid... more >
Merseyrail prepares for more strike action as RMT talks fail again

25/04/2017Merseyrail prepares for more strike action as RMT talks fail again

Yet more strike action is expected to be announced on Merseyrail services as talks between the operator and the RMT union broke down yet again. ... more >
Virgin and Stagecoach join with SNCF on HS2 WCP franchise bid

25/04/2017Virgin and Stagecoach join with SNCF on HS2 WCP franchise bid

Operators Virgin Trains and Stagecoach have today announced that they will launch a joint bid for the West Coast Partnership (WCP) HS2 franchise ... more >

editor's comment

08/03/2017A celebration of rail achievement

Welcome to this special UK Rail Industry Awards (UKRIA) review issue of RTM. The fourth edition of the prestigious awards took place on 9 February at London’s Battersea Evolution and, once again, was a huge success.  With over 1,100 rail decision-makers in attendance, the black-tie event was a great place for networking and celebrating the success of the rail industry in the last 12 months. To see who won at this year’s... read more >

last word

Reasons to be cheerful

Reasons to be cheerful

Ahead of the major imminent reforms to the apprenticeship system, Simon Rennie, general manager of the National Training Academy for Rail, outlines the industry’s reasons to be positive abo... more > more last word articles >

'the sleepers' daily blog

Digital service to reunite passengers with lost valuables trialled in Wales

11/04/2017Digital service to reunite passengers with lost valuables trialled in Wales

Customers pulling their hair out at constantly leaving their valuables on the train may be in luck, as an innovative new system may help them track down their possessions. The system, FindMyLost, is a digital service which allows passengers and railway staff who find an item to put it online with a description, along with a photo and deta... more >
read more blog posts from 'the sleeper' >

comment

Overcoming the challenges of e-ticketing

23/03/2017Overcoming the challenges of e-ticketing

Justin Stenner, head of technology for Heathrow Express, considers the  benefits and drawbacks of implementing e-ticketing on rail services.... more >
Breathing life back into the Connaught Tunnel

23/03/2017Breathing life back into the Connaught Tunnel

Linda Miller, former Crossrail project manager, Connaught Tunnel, reflects on the challenges of widening and deepening the vital Victorian tunnel... more >
The case for rail integration

23/03/2017The case for rail integration

Jeremy Long, CEO of European Business at MTR Corporation, reflects on how stronger integration of train and track could benefit major rail infras... more >
Getting fire testing standards right

23/03/2017Getting fire testing standards right

Richard Nowell, rolling stock engineer at the RSSB, discusses the ‘EN 45545-2 Fire testing of materials and components for trains’, a... more >

rail industry focus

View all News

interviews

Intertrain: ready for the future

23/02/2017Intertrain: ready for the future

RTM recently attended Intertrain’s ‘Driving for Success’ event in Doncaster, where leaders from major players such as Carillion... more >