Contestable services market study

We conducted a phase 1 study of the market for contestable services offered to third party project promoters at the end of 2008, following concerns raised by stakeholders in the course of various ORR consultations and in discussions with ORR.

In the context of facilitating third party investment in the railways, the purpose of this study was to consider the provision of contestable services in order to better understand how the market is functioning and to identify any actual/potential barriers to, or restriction of, effective competition.

We sought to gather information in order to:

  • identify those services offered by Network Rail that are contestable, i.e. can be provided by third parties;
  • identify potential barriers or limitations to and/or restrictions on the provision of these services by third parties.

Findings

We found no clear case or evidence to support regulatory intervention but neither were we in a position to provide assurance that all concerns had been addressed and industry processes were in place to produce the most efficient outcomes.

Further work

In the light of the concerns identified and in the light of our commitment to keep this area under review, we broadened this study to involve third parties in order to validate or otherwise the extent to which problems exist in this market(s), in order to be in a better position to determine the appropriate regulatory next steps.

In broadening this work, we also sought the views from the industry on how the investment process was operating and whether there remain barriers to efficient investment and suggestions as to how these barriers can be overcome.

The issues which were brought to our attention during the course of the consultation which ended in July 2008 informed our exchanges with Network Rail in this area, including our conclusions on template contracts.

We have also explored with Network Rail how the work it already has in hand will address stakeholder concerns. Our conclusions document pdf icon PDF, 85 Kb was published on 31 March 2009.