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1999-06-15 ORR-001
Office of the Rail Regulator

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“Make or break year” for railways warns Regulator


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Office of the Rail Regulator

“Make or break year” for railways warns Regulator
_______________________________________________________________


date
15 June 1999
source Office of the Rail Regulator
type Press release

note ORR/99/21


This is a make or break year for the railway industry in Great Britain, according to the latest annual report from the Rail Regulator which is published today.

In the report, Chris Bolt says :"Much has been said over the past year about the effectiveness of the new structure of the rail industry and of the current framework of rail regulation. Whatever the criticisms, the fact remains that the railways are now carrying more passengers than at any time in the last 40 years, and that the seemingly inexorable decline in rail freight has been reversed.

"There is a potential virtuous circle here : better performance and greater efficiency will create both the climate for growth in rail services and the resources needed to deliver it. The next year will be a test of the industry's ability to deliver."

Mr Bolt identifies the Periodic Review of Railtrack's access charges as a key area of work for the Office. "Decisions on the Review will establish the basis for delivering and funding additional capacity and improved performance during the first decade of the 21st Century", he said.

In his foreword to the report, Mr Bolt says the Competition Act 1998, which was now on the statute book, would have major implications both for the scope of the Rail Regulator's powers - extending, for example, to the manufacture and leasing of rolling stock and to other industry suppliers such as infrastructure maintenance companies - and the means of enforcement available to him, with fines of upto 10 per cent of a company's turnover being applicable for transgressors.

Mr Bolt warns, however, that while prohibition on abuse of market power would add to existing regulatory powers to protect the interests of consumers, prohibition of anti-competitive agreements could conflict with the objective of fostering co-operation to secure the operation of the railway as an integrated network. "These are matters where the Office will need to work closely with both the railway industry and the Director General of Fair Trading to ensure an appropriate outcome", he said.

The Office together with the Office of Passenger Rail Franchising has established a Consumer Benefits Group to work together on the transfer of the Regulator's consumer benefit functions to the Strategic Rail Authority, which is already operating in shadow form. However, Mr Bolt points out that the Regulator's power under licences would continue to be an important means of securing improved service to passengers, as the modifications initiated during this year on timetabling had demonstrated.

He stressed that success for the Strategic Rail Authority would depend critically on Railtrack's performance and delivery of investment plans. He had already met with Sir Alastair Morton and Mike Grant, the new Franchising Director, to explain ORR's approach and ensure that decisions taken by the different organisations were properly integrated.

Commenting on the arrival of Tom Winsor as the new Rail Regulator on 5 July, Mr Bolt says the task now facing the Office is very different from that five years ago. "Then the challenge was to put in place the new structure of contracts and licences that would allow the restructured industry to operate effectively, with a focus on preventing decline in services.

"Now the challenge is to use and develop that framework to ensure that the investment needed for growth and improved performance takes place and can be funded, and to achieve that in a way that leaves the industry to manage delivery."

The ORR Annual Report 1998-99 can be found on the ORR website at http://www.rail-reg.gov.uk/



PRESS ENQUIRIES : ORR Press Office - 0171 282 2002/ 2059.
(Out of office hours pager : 0941 148521)


Railhub Archive ::: 1999-06-15 ORR-001





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