On the right track: Open access explained
12 June 2019
By David Reed, Senior Executive, Access and Licensing.
There are two types of train operator running passenger services in Great Britain: franchised operators hold contracts with the government to run services, while open access operators work independently of, and often compete with, franchises. Open access operators, such as Hull Trains and Grand Central, introduce competition which has been shown to deliver benefits to passengers.
Any would-be railway operator which wants to run trains on the network must seek ORR’s approval of a track access agreement with Network Rail – this sets out where and how often the operator intends to run trains.
When we consider track access applications, we do so in accordance with our statutory duties, including to:
- Protect the interests of users of railway services;
- Promote the use of the network for passengers and freight; and
- Promote improvements in railway service performance.
To do this we look at what the fair and efficient use of network capacity is and what impact extra services could have on the performance of existing services, especially on busy parts of the network. Where there are competing applications for limited network capacity, we assess the costs and benefits of the available options.
For open access applications, we must also consider our statutory duties to:
- Promote competition for the benefit of rail users; and
- Take into account the Secretary of State for Transport’s funds and guidance.
We seek to balance the benefits that open access operators can bring through increased competition (e.g. through lower fares or innovation) against the potential costs to incumbent operators and to the Secretary of State through lower franchise values. We do this through our ‘not primarily abstractive’ test which looks at whether the new services would generate sufficient new revenue, not just take it from current operators, and the new economic equilibrium test which looks at the overall impact of proposals on existing franchises.
It's an interesting area which allows for potential new services where there is capacity and passenger demand. You can find out more about how we assess applications and current applications and decisions on our website.