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1997-07-10 ORR-001
Office of the Rail Regulator


Year of massive change and new challenges for the railway says Rail Regulator

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Office of the Rail Regulator

Year of massive change and new challenges for the railway says Rail Regulator

related documents

Network Rail results


10 July 1997
source Office of the Rail Regulator
type Press release

note ORR/97/16

In his fourth annual report published today, John Swift QC, the rail regulator, said :"The restructuring of the railways is of immense economic and social importance for the future of the country. There is a mood of confidence in the new industry that rail is capable of achieving substantial and exciting growth in passenger and freight traffic. The evidence is already coming through of a substantial increase in the use of rail, at rates higher than that of the growth in the economy."

Referring to his June 1997 regulatory objectives for passenger train and station operators, Mr Swift said :"I made it clear that in many areas there was scope for substantial improvements for passengers and that I would have no hesitation in using my licence enforcement powers or to seek licence amendments if these improvements were not pursued or achieved.

"My job is to influence the industry and to regulate it in the public interest, ensuring an improved public transport service for rail passengers, improved opportunities for using rail for the carriage of goods and better value for money for the taxpayer", he added.

He said the year under review had been a critical year for the regulation of the rail industry. The system of contracts and licences had to be capable of accommodating a multi-operator railway; it had to provide incentives for growth and improved performance and deterrents against abuse or neglect or market failure. In the second phase of reconstruction the new arrangements had to work in the public interest and to the benefit of passengers and users of the railway.

He cited the effective regulation of Railtrack as one of his key objectives especially as this was the first year in which he could test the company's performance in the private sector, in commercial terms and against public interest criteria.

On reliability and punctuality, Railtrack had "produced a substantially improved performance over its record in the public sector. But there is a long way to go". On cooperation with operators

the regulator said that Railtrack now recognised that cooperation and partnership were essential for the effective running of the existing railway and for its enhancement.

Having published the criteria for network enhancement, which Railtrack is expected to follow, Mr Swift said :"I have intervened, and will continue to do so, where I see evidence of Railtrack seeking to obtain disproportionate profit from an investment or refusing to undertake investments without reasonable justification".

On investment in renewals, the regulator said : "Train operators and funding authorities have a right to expect investment which delivers a railway in modern equivalent form - the basis on which the company charges for access. The expenditure backlog identified in Railtrack's interim results last November was not acceptable to operators or to me."

That problem was addressed to some extent with the publication of Railtrack's network management statement in a form approved by the regulator. Containing more information about plans for renewal and development of the network than previous plans, the statement marked an important first step in demonstrating its commitment to planning and future investment. But, as the regulator notes, Railtrack's obligations on delivery of its investment programme have been extremely light. To overcome the fact that Railtrack had no obligation to demonstrate a link between its programme and output targets and the fact that the regulator had no means available of ensuring Railtrack invested wisely, the regulator recently sought agreement for a licence modification designed to meet those public interest concerns without prejudicing the company's effective management of a properly directed capital investment programme.

Turning to the regulation of the multi-operator passenger railway, Mr Swift said train operators had a duty to the public to improve services. The present situation had to get better. "Operators can and must do better by working together to secure a seamless network in which passengers can have full confidence," he said. For his part he would ensure that regulation was firm but fair and not designed to stifle innovation and growth. His Office had intervened to secure improvements for passengers by licence obligations - e.g. in relation to through ticketing- and by the use of the Regulator's powers on access to rail facilities - e.g. by enabling new and expanded services to be introduced.

On freight, the regulator points out that there exists no statutory requirement on Railtrack or on any freight operator to invest in infrastructure or locomotives or wagons to a level which might arrest the decline in the market share of freight. He reports that Railtrack is now committed to the development and implementation of a freight strategy and the publication of a code of practice on how it will behave in respect of freight development and its relationship with other users. He reaffirmed his Office's commitment to exercise its powers and its influence to promote freight on rail, and to ensure that the interests of freight users are properly taken into account in the enhancements that Railtrack will make to the infrastructure.

Mr Swift noted the growing public interest in the work of his Office and was pleased to have launched ORR's own World Wide Web pages in January. The Annual Report for 1996/97 can be found on the Internet at http://www.rail-reg.gov.uk/annrep/

Copies of the Report can be obtained from Sue MacSwan at the ORR Library.

Railhub Archive ::: 1997-07-10 ORR-001


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