Posted 8th January 2025 | No Comments
Concern grows over future of open access
A group which lobbies on behalf of the private sector is urging the government to make the future prospects for open access passenger services clear, after transport secretary Heidi Alexander warned on Monday that she is advising the Office of Rail and Road to ‘ensure that the benefits provided by open access operators outweigh the impacts they have on taxpayers’.
Until now new operators have only been allowed if they would not abstract too much revenue from operators with government contracts and provide a genuinely new service. Train paths must also be available.
Now Ms Alexander wants the ORR to consider the differences between track access charges, which tend to be lower for open access services, and the fact that such operators benefit from public investment in infrastructure.
Although she conceded her letter was only advisory, she has also indicated that she is considering changes to her formal guidance.
Since renationalisation of the former franchises was confirmed, transport groups have been anxious to lodge open access applications. Among these, Virgin is proposing to operate as many as 35 trains a day from London Euston to various destinations, and FirstGroup wants to run new Lumo services between London and south Devon.
Lobby group Rail Partners, which has also opposed general renationalisation, is concerned that the recent enthusiasm for more open access could be reversed.
Chief executive Andy Bagnall said: ‘The last 18 months have been a breakthrough period for open access operators as the benefits they bring to customers have been increasingly recognised. Open access operators create new travel opportunities especially for underserved communities, support economic growth and encourage a shift to greener transport options. They also promote fares competition and, importantly for taxpayers, they receive no government subsidy.
‘Since the UK’s general election in July, the new government has confirmed its support for open access operators in the private sector, despite its rail renationalisation agenda. It is a very positive sign that the Prime Minister personally visited the Hitachi factory in Newton Aycliffe to support a deal to manufacture new trains for FirstGroup’s open access services.
‘However, despite all the positive developments in recent months, it remains unclear whether the new government is a champion of open access operators, or it is simply tolerating them as part of the system that is too costly to nationalise. If the Government doesn’t make a positive choice to grow the sector through adequate safeguards and a fairly-adjudicated application process, it will effectively be creating the conditions for existing operators to wither on the vine. The Secretary of State’s letter to the ORR this week is a worrying signal.’
Meanwhile, the value of shares in FirstGroup has fallen back by almost 3 per cent since the transport secretary’s letter was published two days ago.