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Question for Department for Transport

UIN 216956, tabled on 3 December 2014

To ask the Secretary of State for Transport, what steps his Department is taking to better support (a) all new entrants to the railway operation market and (b) open access rail operators.

Answered on

9 December 2014

The Department is supportive of the principles and the benefits of competition that open access can bring, such as greater choice and lower fares for some passengers. Open access operators have helped to provide new services for passengers and grow new rail markets.

However, these benefits must be set against the need to reduce the overall cost of the railway to taxpayers and balanced against the potential to abstract passenger revenue from franchised operators.

Decisions on granting access rights to operate railway services are the responsibility of the independent Office of Rail Regulation (ORR). ORR does not normally approve access rights for new competing services, including open access services, which would not generate at least 30p of new revenue for every £1 abstracted from existing operators. ORR also takes account of the total amount of abstraction from franchised operators in order to consider the effect this may have on the funds available to the Secretary of State for the purposes of his functions in relation to railways and railway services.

The Department is continuing to develop the franchising approach and to engage with prospective operators about the opportunities within the railways in England and Wales. The pre-qualification process, which is the first stage operators face in the franchising competition process, is designed to ensure a field of appropriately qualified operators to meet the requirements of passengers and the Department; the process has been recently adapted to specifically encourage new entrants and partnerships.