ORR consultation on recovering fixed network costs

28 September 2017

As part of the 2018 periodic review (PR18) of Network Rail, the Office of Rail and Road is today consulting on its approach to calculating the charges operators pay to access the rail network.

Access charges are important as they affect the decisions that Network Rail, train operators and funders make about use of the rail network. They play an important role in improving outcomes for passengers, freight customers and taxpayers.

In its June 2017 charges and incentives conclusion letter, ORR confirmed that it would continue to work towards levying charges to recover fixed network costs on all operators, subject to a market-can-bear test.

The purpose of this consultation is to continue progress on developing our approach to levying these charges, which we have called infrastructure cost charges. In this consultation we are:

  • Proposing to retain the existing approach to market segmentation for freight services, based on commodities carried. We are also setting out initial views on which freight market segments appear to be able to bear infrastructure cost charges in control period 6 (CP6). This includes proposing to allow Network Rail to continue levying infrastructure cost charges on trains carrying coal for the electricity supply industry (ESI coal), spent nuclear fuel and iron ore. We are proposing to also define trains carrying biomass for the electricity supply industry (ESI biomass) as a market segment able to bear infrastructure cost charges in CP6;
  • Setting out initial views around a potential approach to defining passenger market segments for the purpose of levying infrastructure cost charges; and
  • Setting out proposals on the design of, and approach to levying infrastructure cost charges on passenger operators, both franchised and open access.