Office of Rail Regulation

Rail Regulator announces decision on Grand Central track access application
_______________________________________________________________

date 18 June 2004
source Office of Rail Regulation
type Press release

note ORR/20/04

The Rail Regulator, Tom Winsor, has today published his decision on a track access application from Grand Central Railway Company Limited (Grand Central) for rights to operate four new services a day in each direction between Newcastle and Manchester Victoria, via Darlington, York, Leeds, Wakefield Kirkgate, Brighouse and Rochdale.

Having considered the application in accordance with his statutory duties and published criteria, the Regulator has decided not to direct that Network Rail Infrastructure Limited should enter into the track access contract sought by Grand Central. The Regulator’s document, Application by Grand Central Railway Company Limited for a track access contract, explains in detail how he dealt with the application and the reasons for his decision.

The document describes the consultation process with other train operators, the Strategic Rail Authority (SRA) and the relevant Passenger Transport Executives and Rail Passengers Committees, and a hearing held by the Regulator’s staff at which Grand Central, Network Rail and all other interested parties were able to present their arguments. The document also records the many exchanges that ORR staff had with Grand Central following the hearing, so that the Regulator had the most complete possible picture of the likely impact of approving the application.

The document notes that, in reaching his decision, the Regulator has had to balance a number of relevant objectives and considerations under section 4 of the Railways Act 1993 before deciding whether or not approving the application would be in the public interest. Given that a number of the section 4 duties would point him to different conclusions in this case, this decision inevitably involved the Regulator exercising his judgment, giving careful consideration to all relevant information.

Having assessed the application against his relevant statutory duties and in accordance with his relevant published criteria, the Regulator has decided to reject Grand Central’s application for the principal following reasons:

1. Although the rights sought by Grand Central could be accommodated without a disproportionate impact on the services of other operators and whilst Grand Central’s services would bring benefits to passengers, most of the route it would serve already has high frequency, high-speed services, using rolling stock of a comparable quality to Grand Central’s;
2. The Regulator has material doubts about Grand Central’s projected levels of revenue generation, given the evidence of the relevant precedents and the lack of evidence underlying its projections, especially for the main sources of generation that it has identified; and
3. Approving Grand Central’s application in these circumstances would therefore involve a considerable risk with respect to the level of abstraction from existing franchised train operators, with adverse consequences for their ability to plan their businesses and for the SRA’s financial position. Whilst the sums involved would form a relatively small percentage of the SRA’s overall budget, that budget is already substantially contractually committed and the sums involved in absolute terms could be substantial.

Notes to Editors
1. Application by Grand Central Railway Company Limited for a track access contract sets out the background to this application, how the Regulator has assessed it and the reasons for his conclusions. It is also available from the ORR Librarian, Sue MacSwan, 1 Waterhouse Square, 138-142 Holborn, London EC1N 2TQ, tel: 020 7282 2001, fax: 020 7282 2045, e-mail: rail.library@orr.gsi.gov.uk.
2. Some material in the document has been redacted, at the request of Grand Central, on the grounds that its disclosure would or might, in the opinion of the Regulator, seriously and prejudicially affect the company’s interests.
3. Moderation of competition: final conclusions, Office of the Rail Regulator, London, May 2004 sets out the Regulator’s policy on applications for rights where new services would compete with existing services and potentially abstract revenue from them. It is available from the ORR Librarian or at http://www.rail-reg.gov.uk/upload/pdf/195.pdf.

Press enquiries
ORR Press Office – 020 7282 2002/2007
Out of office hours – pager 07659 127303

Railhub Archive ::: 2004-06-18 ORR-001