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Watchdog weighs up options for greater rail competition Watchdog weighs up options for greater rail competition
(about 4 hours later)
The UK’s rail network could be opened up to greater competition between operators under proposals being considered by a watchdog.The UK’s rail network could be opened up to greater competition between operators under proposals being considered by a watchdog.
One of the options being weighed up by the Competition and Markets Authority (CMA) would be to ensure that two operators for each franchise.One of the options being weighed up by the Competition and Markets Authority (CMA) would be to ensure that two operators for each franchise.
It said changes were most likely to benefit Britain’s three mainline routes - the east coast and west coast mainlines between London and Scotland, and the Great Western route linking the capital with the south-west and Wales.It said changes were most likely to benefit Britain’s three mainline routes - the east coast and west coast mainlines between London and Scotland, and the Great Western route linking the capital with the south-west and Wales.
Related: Virgin Trains faces competition on east coast mainlineRelated: Virgin Trains faces competition on east coast mainline
The CMA said it had found that the recently reformed system of competitive bidding for rail franchises was working well.The CMA said it had found that the recently reformed system of competitive bidding for rail franchises was working well.
It said there was also a degree of “on-rail” competition, where franchises overlap or face competition from other approved operators.It said there was also a degree of “on-rail” competition, where franchises overlap or face competition from other approved operators.
“Overall, the evidence suggests that a material increase in on-rail competition would result in benefits for passengers and taxpayers,” the CMA said.“Overall, the evidence suggests that a material increase in on-rail competition would result in benefits for passengers and taxpayers,” the CMA said.
The watchdog said the changes could result in lower fares, greater incentives to improve service quality and create new efficiencies among operators, more effective use of the network’s capacity, and cost-savings in the network operation.The watchdog said the changes could result in lower fares, greater incentives to improve service quality and create new efficiencies among operators, more effective use of the network’s capacity, and cost-savings in the network operation.
The CMA said any potential shortfall in revenues from lower premiums paid by franchisees as a result of the changes could be met by extracting higher charges from new entrants to the market.The CMA said any potential shortfall in revenues from lower premiums paid by franchisees as a result of the changes could be met by extracting higher charges from new entrants to the market.
It said it was considering four options, including retaining the existing market structure “but with significantly increased open access operations”, or having two franchisees for each franchise.It said it was considering four options, including retaining the existing market structure “but with significantly increased open access operations”, or having two franchisees for each franchise.
They also included more overlapping franchises, and licensing multiple operators.They also included more overlapping franchises, and licensing multiple operators.
The CMA said it would not expect proposals to be implemented until 2023 at the earliest. It has opened a consultation to close on 16 October, after which it will undertake further work ahead of a final report. The CMA said it would not expect proposals to be implemented until 2023 at the earliest. It has opened a consultation to close on 16 October, after which it will undertake further work before a final report.