Urban Transport Group concerned over 'cost dumping' on urban and regional rail networks

Friday, December 15, 2017
Ben Still

Lead Board member on rail issues for the Urban Transport Group, Ben Still, has today written to the Chief Executive of the Office of Rail and Road Regulation (ORR) to express the Group's concerns about industry processes that could further shift the balance of the railways' infrastructure costs on to regional rail services in a way which could damage their future prospects. Even though regional rail trains are generally lighter, slower and cause less impact on infrastructure than inter-city trains.

The moves to allocate more of the network's overall costs to regional rail services has come in a series of recent industry consultations by ORR and Network Rail.

This recently concluded consultation by Network Rail on fixed cost allocation could see the allocation of the network’s fixed costs attributed to Northern Rail increase by 50%, whilst the largely self-contained Merseyrail network sees its allocation go up by 66%. Meanwhile Virgin West Coast would see their allocation go down by 58% and Virgin East Coast would go down by 58%.

The Urban Transport Group’s letter to the Regulator says:

‘…to adopt a construct for rail costs which is to the benefit of the operators whose trains have some of the largest impacts on the cost of infrastructure provision in a way which creates artificial profits, whilst at the same time loading costs on to operators whose trains cause the least impact and which damages their future prospects, is not something that we believe is as either justifiable or sensible.’

A report the Group published in 2014 (A heavy load to bear – towards a fairer allocation of industry costs to regional rail services) found that:

• The allocation of maintenance and renewal costs largely treats every passenger train in the same way even though Inter-city trains are estimated to produce twenty times the amount of track damage as the most basic light weight regional trains

• A system that allocates costs more fairly would result in regional rail going from taking an estimated 58% share of total government support for the railways to 28%

Ben Still said:

‘We are concerned that running through a series of highly technical consultation papers there is a risk that more of the burden of the industry’s overall costs on to services that don’t create the majority of that burden in the first place and which are least able to bear it. This in turn will make regional railway services look far more expensive than they actually are generating public subsidy per trip figures that are misleading but which can be used to undermine the case for continuing to support and invest in regional rail services.’

‘Regional rail services bring clear benefits through switching traffic from road to rail in our busy cities, historic towns and national parks. We need a fairer system of allocating costs to them than the one we have now, the flaws of which could be exacerbated as a result of these emerging plans. Lightweight regional train services do not cause the most damage to the tracks, nor require the most sophisticated signalling systems. Nor do regional rail services generate the most income or receive the most investment. They are marginal users and this needs to be fairly reflected in the costs that are allocated to them.’

The heavy load to bear report can be downloaded below.

For more contact Jonathan Bray on 0781 804 1485.

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