Non-Subscriber Extract
UK issues rolling stock competition report
By Jim Smith
20 April 2009
The UK's Office of Rail Regulation (ORR) referred the rolling stock market for investigation by the Competition Commission (CC) in April 2007.
The CC has been carrying out its own investigation to see if any features of this market prevent, restrict or distort competition and, if so, what action might be taken to remedy the position.
Passenger rolling stock in the UK is predominantly owned by three rolling stock lessors (roscos): Angel Trains Ltd, HSBC Rail (UK) Ltd and Porterbrook Leasing Co Ltd. The roscos were created at privatisation to own the fleets of ex-British Rail passenger vehicles that are leased to train operating companies (TOCs).
Restricted competition
In its final report, published on 7 April, the CC has concluded that competition in the market for the leasing of rolling stock is restricted by the limited number of alternative fleets available to TOCs when bidding for rail passenger franchises.
The CC has identified several factors which in combination have restricted the choice of rolling stock available for lease at the point at which franchises are being let. These include: technical and operational factors that limit interoperability; costs and risks in switching rolling stock or introducing new rolling stock; and aspects of the way in which the franchising system currently operates.
TOCs have in many cases little incentive or ability to negotiate with roscos and roscos in turn have little incentive to compete with each other, according to the report.