On 10 September 2010, the Office of Rail Regulation ("ORR") announced the launch of a public market study into access to sites suitable for rail freight business in Britain. Rail freight sites are considered key to the movement of goods by rail and are used for the loading and unloading of rail freight, the transfer of freight between rail and other modes of transport, and storage.
The public market study has been prompted by an internal research study undertaken by the ORR from July to April 2010. This research study was carried out as part of the ORR's freight regulatory programme. It reviewed the level of competition between freight operators by looking at the current site leasing arrangements and the existing regulatory framework as it relates to rail freight sites. It also sought to identify any incumbency advantages that accrue from legacy arrangements.
Based on its freight regulatory programme work, the ORR has decided to proceed with a public market study, to enable a full exploration of access issues with the rail freight industry and its customers.
The study will focus particularly on issues surrounding the control of key rail freight sites by freight operators, including:
- whether the transfer of long-term site leases to incumbent operators at the time of privatisation may have distorted competition in a way which was disadvantageous to consumers; and
- the effectiveness of concentrating on promoting competition between the operators of the processes and procedures attaching to the strategic freight sites list managed by Network Rail.
Potential outcomes range from a reference to the Competition Commission for an in-depth review of the market through to a clean bill of health. The ORR will also explore whether there is a case for changing the regulatory framework, particularly relating to how the ORR assesses future applications for access exemptions and appeals relating to access to freight facilities. It may also decide to strengthen Network Rail's incentives to get more involved in the management of leases.
The ORR intends to hold meetings with key stakeholders in October and November of this year. It expects that a published consultation on provisional findings will be published in January / February 2011.
To view Community Week, Issue 489 – 20 September 2010 in full, click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
