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

RAIB: Croydon tram driver had ‘lost awareness’ before fatal derailment

20/02/2017RAIB: Croydon tram driver had ‘lost awareness’ before fatal derailment

The driver of the fatal Sandilands junction tram accident in Croydon, London, had “lost awareness” before the carriage he was control... more >
HS3 success key to closing bleak north-south divide, says IPPR

20/02/2017HS3 success key to closing bleak north-south divide, says IPPR

Success with HS3 is key to readdressing the imbalance in investment between the north and London, influential think tank IPPR North has argued. ... more >
ORR confirms Joanna Whittington as CEO

20/02/2017ORR confirms Joanna Whittington as CEO

The Office of Rail and Road (ORR) has today officially confirmed the appointment of Joanna Whittington as its permanent CEO following an open pub... more >

editor's comment

17/01/2017Rising to the digital demand

The countdown is well and truly on for this year’s UK Rail Industry Awards (UKRIA), and the whole RTM team is looking forward to welcoming you to the fourth edition of this event on 9 February.  Held once again at Battersea Evolution, the prestigious awards ceremony promises to be an extraordinary evening, celebrating some of the major achievements of the industry in the last year. You can see the awards shortlist on pag... read more >

last word

Making rail fares simpler

Making rail fares simpler

David Sidebottom, passenger director at Transport Focus, explains how a number of initiatives over the next 12 months aim to make rail fares simpler. By the end of 2017, we hope passengers w... more > more last word articles >

'the sleepers' daily blog

Southern Rail passengers reminded to claim compensation

03/02/2017Southern Rail passengers reminded to claim compensation

Southern’s annual season ticket holders have been reminded that they are entitled to claim compensation due to the franchise’s poor performance over the 2016-17 financial year. Last year, the DfT promised that Southern season ticket holders would be able to claim the equivalent of a month’s worth of fares in compensation... more >
read more blog posts from 'the sleeper' >

comment

The role of simulation in ERTMS training and system design

01/02/2017The role of simulation in ERTMS training and system design

Paul Boyle, head of ERTMS at Virgin Trains East Coast (VTEC), discusses the role of simulation in ERTMS training ahead of this year’s &lsqu... more >
Digital railway maintenance

01/02/2017Digital railway maintenance

Tim Flower, head of maintenance at Network Rail, explains how the infrastructure owner is adopting a new approach for condition monitoring to max... more >
Challenges and opportunities for big data in the Digital Railway

01/02/2017Challenges and opportunities for big data in the Digital Railway

Dr John Easton and Dr Shruti Kohli from the University of Birmingham write for RTM about the role big data can play in transforming the country&r... more >
A better railway depends on harnessing technology

27/01/2017A better railway depends on harnessing technology

Paul Plummer, chief executive of the Rail Delivery Group (RDG), argues that we must change the status quo and invest in technology if we are to c... more >

rail industry focus

View all News

interviews

Tackling regulation at its routes

24/01/2017Tackling regulation at its routes

John Larkinson, the ORR’s director of railway markets and economics, speaks to RTM about the move to regulating Network Rail at a route lev... more >