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Railhub Archive
2016-01-13 RDG-001
Rail Delivery Group


Rail industry takes the lead in review of infrastructure charges

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Rail Delivery Group

Rail industry takes the lead in review of infrastructure charges

related documents

Review of charges, summary report (RDG, 2015)


13 January 2016
source Rail Delivery Group
type Press release

An industry-led review of the structure of charges that are paid by train operators for using Network Rail’s infrastructure has called for the rail regulator to work with the industry to build on its early engagement.

The charges that train operators pay to Network Rail are important because they account for over £1.6bn of Network Rail’s income every year. The charges allow Network Rail to pay the costs of providing rail infrastructure. They also provide information to users and policy makers about the best way to use infrastructure.

The review has been led by the Rail Delivery Group (RDG), which represents passenger operators, freight operators and Network Rail. It is the culmination of a two-year project that sought to inform the Office of Rail and Road’s (ORR’s) policy decisions, in advance of the ORR’s next Periodic Review of Network Rail’s charges, which starts later this year.

For the first time, through the RDG, the industry has set out its own views before the ORR starts its review, rather than waiting for the regulator to set out its views before responding. The RDG’s review involved around 100 stakeholders from across the industry, putting it in a strong position to work with the ORR during its next review.

The RDG will continue to work with the ORR to build on its review, and hopes that the regulator will take careful note of the areas where the RDG’s review identified the most significant issues, and focuses its resources in these areas. Where the ORR does not agree with the findings of the industry’s review, the RDG thinks that it is important for the ORR to explain why. The RDG hopes that the end result of the ORR’s review will be better outcomes for network performance, as well as capacity and efficiency for passengers and freight customers, as well as taxpayers and the economy overall.

The review concluded that the next periodic review should provide clarity about the purpose and principles of charges and that its review should prioritise those areas that the industry found to be most in need of reform. However, RDG found that without wider changes to industry arrangements, the impact of significant changes to infrastructure charges is likely to be limited.

The review also concluded that:

The areas of charges that are most in need of reform include how charges reflect the performance impact of increasing network traffic and how they reflect Network Rail’s cost drivers.
Charges should reflect the reality of Britain’s rail industry and should not assume that changes will impact all parties in the same way.
The ORR should align charges more closely with other parts of the industry’s regulatory and contractual framework, public transport policy, and the needs of customers.
The ORR’s proposals should be fully impact assessed.
* While identifying the need for some changes, the industry is broadly supportive of several elements of the current regime, such as charges that recover the costs of wear and tear on rail infrastructure and electric current for traction.

Paul Plummer, Chief Executive of the RDG, said:

“Charges matter because they affect the way that Network Rail and train operators work together to deliver the service that customers expect. They are an essential component of how the system operates.”

“For that system to work properly, the purpose of charges and incentives must be clear and they must apply consistently across the network. Train operators must know what they are for, and how they can help deliver a better service for our customers.”

Notes to editors

o The Rail Delivery Group was set up in 2011. It brings together Network Rail and the passenger and freight train operating companies to lead and enable improvements in the railway which are ultimately for the benefit of passengers and freight users as well as the taxpayer and the wider economy.
o The Review of Charges is part of RDG’s Reform portfolio. It was started in Spring 2014 and completed in November 2015, and was made up of three phases:
o Setting out a vision of what the charges and incentives regime should deliver
o Describing the current and potential alternative industry environments that charges operate in; and assessing how well the current regime delivers the RDG vision
o Developing and accessing options for changes to the charges and incentives regime.
o The review used desk-based research, industry workshops, and one-to-one meetings to gather information to develop the findings. It was guided by a small working group of industry representatives with each phase supported by independent consultants FTI Consulting, LEK Consulting (International) Limited, and Cambridge Economic Policy Associates.
o More information on the RDG’s Review of Charges.

Railhub Archive ::: 2016-01-13 RDG-001


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