Office of the Rail Regulator
Rail Regulator demonstrates year of action in Annual Report 2000
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Rail Regulator demonstrates year of action in Annual Report 2000
type Press release
note ORR/00/23 (national version of ORR/00/24)
The Rail Regulator, Tom Winsor, published his first annual report today. It charts the progress of work following a dynamic regulatory agenda launched when he took office a year ago.
Work in the year to 31 March 2000 covers a period of intense activity stemming from a policy of tougher and more effective regulation with proportionate use of regulatory powers to meet and promote the public interest.
'The annual report shows the progress made by holding the railway companies much more closely to account for the discharge of their public interest obligations' says Tom Winsor. 'It has been a period of hard work and firm action aimed at realising the potential of the railway industry as a partnership between the private and public sectors.
'The rail network is a precious asset and needs to be maintained and developed to a high standard. Independent regulation helps to deliver this outcome while allowing rail companies also to pursue their legitimate business objectives. Much has been achieved this year and we're set to build on that by keeping these aims firmly within our sight.'
The most significant work of the year has been on the periodic review of Railtrack's access charges. The periodic review determines the financial framework by which Railtrack charges for the use of the network by franchised train operators. It also contains a new regime under which Railtrack will be incentivised to enhance the network. (See notes for editors and report paras 3.1 - 3.12).
Other achievements of the regulatory year, covered in the report, are:
Railtrack performance: Performance is a key indicator of Railtrack's network stewardship and the Regulator acknowledges its improvement in this area. This was substantially due to enforcement action taken by the Regulator to hold Railtrack to targets it had committed to in the 1998/99 Network Management Statement. Enforcement action was taken requiring Railtrack to achieve a 12.7% reduction in delays per passenger train. To incentivise achievement of the target the Regulator set a penalty of £4 million per percentage point for any shortfall. The enforcement order was made on 25 November 1999. (Report paras 2.8 - 2.10)
West Coast Main Line: As part of the West Coast Passenger Upgrade 2 agreement between itself and the Virgin Rail Group, Railtrack agreed to provide additional capacity for other train operators and to look at the scope for further improvements to the line's capacity and capability. After failing to demonstrate how it proposed to meet these commitments the Regulator commenced enforcement action on 5 November 1999 requiring it to do so. The enforcement order came into force on 5 May 2000 requiring Railtrack to provide all necessary information by 22 May 2000. (Report paras 2.8 - 2.10)
Safety: This year saw the tragic accident at Ladbroke Grove on 5 October 1999 which claimed 31 lives and injured hundreds more. The Regulator is not the safety regulator for the rail industry but does have a duty to 'take into account the need to protect all persons from dangers arising from the operation of the railways, taking into account, in particular, any advice given to him by the Health and Safety Executive (HSE)'. Actions put in hand following the Regulator's evidence to Professor Uff's inquiry into the Southall accident on 19 September 1997 included a review of train regulation policy and discussions on funding of research. Pending the Cullen inquiry into the Ladbroke Grove accident, the office took part in an interim review of Railtrack's role in safety. During the year it has also strengthened its relationship with HSE and sought its advice on various issues. (Report paras 2.25 - 2.28)
Track quality: Railtrack is required to meet track quality improvement targets by 2001. However a 24% increase in broken rails (from a figure of 756 in 1997/98 to 927 in 1998/99) was clear evidence of failing asset management and the Regulator has taken action to monitor the emerging situation throughout 1999/2000. He is considering what further action is appropriate in the light of only a marginal improvement to a figure of 917 for the current year. Specific concerns over the Severn Tunnel and the Settle-Carlisle, Glasgow and South Western and Fife Circle routes have also been addressed. (Report paras 2.11 - 2.14)
Track access: Significant work has been undertaken in respect of the approval of, and amendments to, access agreements between Railtrack and the train operators. We have given advice where necessary, ensured effective consultation, and have required increasingly detailed information relating to performance, reliability both to inform the decision-making process and to explain the implications of specific decisions to interested parties. New access agreements include those for Tyne & Wear Transport Executive (Nexus) affecting Sunderland, Newcastle and South Hylton, new services on the East Coast Main Line by GNER and Hull Trains and new cross-London services by Anglia Railways. (Report paras 2.20 - 2.24)
Competition: The Competition Act 1998, which came into force on 1 March 2000, is applied and enforced, in railway cases, by the Regulator. This year he published draft guidelines explaining how the Act applies to the railway industry. He will also use powers under this Act to enforce codes of practice established by him with the rolling stock leasing companies. (Report paras 4.40 - 4.42)
Freight: The focus of regulation included a decision that Railtrack should develop its freight routing strategy to be more fit for purpose and work towards overcoming obstacles to growth such as network constraints or lack of economic incentives. A major freight survey was launched on 20 January 2000 to build up a picture of the barriers to choosing rail as a mode of transport for freight. New licence applications were received and processed from Mendip Rail Ltd and GB Rail Freight. Consideration of a new Freightliner access agreement is underway. (Report paras 2.38 - 2.42)
Model clauses: The Regulator has begun the development of standard clauses that can be incorporated into all access agreements. These will promote agreements between train operators and Railtrack that are fair, well balanced, clear and of benefit to both parties. (Report paras 3.13 - 3.17)
A copy of the Annual Report (text only version) is available from this website or 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: "firstname.lastname@example.org". Details of the conclusions of the periodic review were announced yesterday Thursday 27 July 2000 - see ORR press notice ORR/00/22.
Railhub Archive ::: 2000-07-28 ORR-001