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Transport secretary gives open access a yellow light




Transport
secretary



Heidi
Alexander
has
sounded
a
note
of
caution
over
future
open
access
services,
and
has
issued
new
advice
to
the
Office
of
Rail
and
Road,
which
decides
whether
to
grant
licences.



She
emphasised
in
her
letter
that
the
formal
guidance
had
not
changed,
but
added
that
‘I
hope
it
will
be
helpful
to
the
ORR
by
setting
out
my
expectations’.



Since
the
early
days
of
privatisation,
the
main
test
for
open
access
has
been
that
a
new
service
will
not
‘abstract’
revenue
from
operators
with
government
contracts,
which
were
known
as
franchises
until
2020.



Such
a
loss
of
revenue
could
have
cost
taxpayers
money,
because
franchise
holders
enjoyed
a
degree
of
commercial
protection.



Since
Labour
announced
that
it
intended
to
renationalise
the
remaining
former
franchises,
which
now
operate
under
National
Rail
Contracts,
private
sector
owning
groups
have
been
paying
much
greater
attention
to
open
access
opportunities,
particularly
as
Labour
had
said
before
the
July
election
that
‘wherever
there
is
a
case
that
open
access
adds
value
and
capacity
to
the
network,
they
will
be
able
to
continue
to
compete’.



But
Ms
Alexander
has
now
qualified
this
general
statement
of
policy,
saying
in
her
letter
to
the
ORR
that:
‘I
am

aware
of
the
additional
pressures
new
services
can
create
on
already
constrained
network
capacity
and
their
impact
on
the
value
secured
from
public
investment
in
infrastructure.
While
Open
Access
operators
pay
variable
access
charges
to
Network
Rail
to
cover
the
direct
costs
incurred
running
their
trains
on
the
network,
unlike
government
contracted
operators
they
do
not
fully
cover
the
costs
of
fixed
track
access
charges.’



The
ORR
has
already
granted
licences
to
several
new
open
access
operators,
but
more
are
being
considered.



Naomi
Horton,
rail
partner
at
law
firm
Ashurst,
said:
‘Today’s
letter
from
Heidi
Alexander
signals
the
requirement
for
ORR
to
apply
a
more
stringent
test
for
future
privately
run
passenger
rail
open
access
services
which
takes
into
account
rail
network
congestion,
contribution
to
the
upkeep
of
the
infrastructure
and
an
implied
focus
on
bringing
innovation
and
new
markets,
in
addition
to
the
current
prohibition
on
such
open
access
services
“primarily
abstracting”
revenue
from
the
franchised/public
sector
run
services. 



‘This
will
be
viewed
with
interest
and
possible
dismay
by
private
sector
transport
operators
keen
to
continue
running
rail
services,
since,
following
the
passing
of
the
Passenger
Railway
Services
(Public
Ownership)
Act,
this
is
the
only
way
they
can
continue
their
passenger
rail
businesses.’



One
open
access
operator,
FirstGroup,
has
already
lost
Transpennine
Express
and
is
due
to
see
its
remaining
contracts
for
South
Western
Railway,
Great
Western
Railway
and
Avanti
West
Coast
renationalised
soon,
but
like
other
owning
groups
it
has
yet
to
comment. 

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