Office of the Rail Regulator

Regulator consults on sharing profits from Railtrack's property estate
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date 19 January 1996
source Office of the Rail Regulator
type Press release

note ORR/96/2

In January 1995, the Rail Regulator, John Swift QC, announced his conclusions on the future level of access charges payable by franchised passenger train operators to Railtrack*. Among his conclusions was one that there should be a provision to allow profit sharing on additional proceeds from Railtrack's property estate, over and above the levels assumed by the company in the projections submitted to the Regulator. He indicated that he was discussing with Railtrack the precise form that the provisions should take.

The Regulator is now consulting train operators on the broad structure of the profit sharing mechanism. The key feature of the proposed mechanism is that 25% of additional net income, over and above the levels already taken into account in setting access charges, should be passed back to train operators through a rebate of access charges, with Railtrack retaining the other 75%. A copy of the proposals - "Proposed Mechanism for Sharing Variations in Railtrack's Property Income" - is attached.

Mr Swift said:"Railtrack's property is held for the benefit of its customers, passengers, other users of the network and its shareholders. The 75:25 share of any additional proceeds, upon which I am consulting, would provide the most powerful incentive to develop its property assets and to build a stronger business without compromising its duties to concentrate on and develop a better railway infrastructure."

Railhub Archive ::: 1996-01-19 ORR-001