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

TfGM gets to work on upgrades at 25 Metrolink stations

21/09/2017TfGM gets to work on upgrades at 25 Metrolink stations

Major work to upgrade stations across Manchester’s Metrolink network has kicked off this week. This first phase will see customer info... more >
Strategy developed to drive forward rail devolution agenda

21/09/2017Strategy developed to drive forward rail devolution agenda

A strategy has been set out by urban transport authorities that explains how government and transport bodies should work together to deliver inte... more >
NR starts £4.2m refurb of 134-year-old South Esk viaduct

21/09/2017NR starts £4.2m refurb of 134-year-old South Esk viaduct

Work has started this week on the £4.2m refurbishment of the South Esk viaduct at Montrose, it has been revealed. The impressive struc... more >

editor's comment

04/09/2017A series of incredible events

There are a couple of announcements I’d like to make in this editor’s comment, which I believe could be very beneficial to many of our readers.  Firstly, the deadline is fast approaching to enter the UK Rail Industry Awards (UKRIA), which will take place on 22 March 2018 at Battersea Evolution in London.  Now in its fifth year, UKRIA continues to bring together the leaders and decision-makers running the rail ... read more >

last word

How do tram and rail passengers compare?

How do tram and rail passengers compare?

David Sidebottom, director at Transport Focus, analyses the drivers in performance of passenger satisfaction in tram compared to rail. Results published in our recent Tram Passenger Survey (... more > more last word articles >

'the sleepers' daily blog

UKRIA 2018: Meet the judging panel

19/09/2017UKRIA 2018: Meet the judging panel

With just under a week left to get your applications in for the rail industry’s biggest awards event, UKRIA, it seems like the perfect time to introduce the huge names that are making up our judging panel this year. The most exciting addition to the senior pan-industry panel this year is one of the most recognisable names in the ind... more >
read more blog posts from 'the sleeper' >

comment

Wirral loop: ‘one industry’ approach to minimise disruption

21/09/2017Wirral loop: ‘one industry’ approach to minimise disruption

Wayne Menzies, head of rail for Merseytravel and chair of the Liverpool City Region’s Major Events Transport Board, discusses the recently ... more >
Crossrail: track installation complete

21/09/2017Crossrail: track installation complete

Chris Enoch, Crossrail’s railway systems project manager, discusses the complexities in the design and installation of the track system on ... more >
Ballast or slab?

21/09/2017Ballast or slab?

As HS2 moves forward, William Powrie, professor of geotechnical engineering and dean of the Faculty of Engineering and the Environment at the Uni... more >
A network of training excellence

18/09/2017A network of training excellence

Writing on behalf of the Training Alliance, Simon Rennie runs through the early results of a tight-knit collaboration agreement between key rail ... more >

rail industry focus

View all News

interviews

Pushing forward with EWR plans

21/09/2017Pushing forward with EWR plans

Andy Free, head of engineering assurance at East West Rail (EWR) Alliance, discusses the recent round two public consultation on the plans for th... more >