17.05.16
Full Arriva integration of Northern halted over competition concerns
Arriva’s takeover of the Northern rail franchise has been temporarily halted by the Competition and Markets Authority (CMA) over concerns that it will threaten competition, creating a worse experience for passengers.
The CMA is still deciding whether to carry out a full-length investigation, but it has issued an enforcement order to prevent full integration of Northern and Arriva, which officially took over the business on 1 April.
The CMA raised concerns after an initial review found that, following the takeover, there would be little or no competition against Arriva on 38 train routes and 44 bus routes, leading to a risk of higher prices or poorer quality service on these routes.
Andrea Coscelli, executive director of markets and mergers at the CMA, said: “Arriva already runs significant existing train and bus operations in the area covered by Northern Rail. We have identified a number of services and routes where passengers have previously had a choice between competing operators, but which will now be run by Arriva.
“This situation could potentially lead to a rise in non-regulated fares for passengers so unless Arriva is able to offer suitable undertakings now, we intend to carry out an in-depth investigation to look in more detail at these concerns, and decide whether any remedies are required.”
Arriva operates CrossCountry, Chiltern, Arriva Trains Wales, Grand Central and the open access Alliance Rail service, as well as London Overground, Tyne and Wear Metro and 5,900 bus services.
The company must now offer proposals to resolve the competition concerns raised by the CMA this week.
If Arriva does not offer such undertakings, or the CMA does not accept them, the CMA will refer the Northern Rail franchise award for an in-depth phase 2 investigation.
TSSA warns of flaws in “the whole franchise system”
Manuel Cortes, general secretary of the TSSA, which opposed the Arriva takeover, said: “The whole franchise system is basically flawed because it creates local monopolies across different regions. We warned about Arriva getting this franchise and our predictions have come true.”
A spokesperson for Arriva said: “We note the Competition and Markets Authority’s announcement in relation to the Northern Rail franchise.
“We are already working closely with the Competition and Markets Authority to attempt to agree a package of measures to address any competition concerns they have and avoid a time-consuming phase two investigation.”
A DfT spokesperson added that Arriva is already serving rail passengers in the north and this announcement doesn’t change that.
“They are now working to address the CMA’s concerns,” he said. “It would not be appropriate to comment further while the CMA’s review is ongoing.”
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