Can anyone start a train operating company in the UK?

[Blillpers]

Hi!
This is just a thing that I have been thinking about, as the UK is world-leading in the field of private-operated trains. As you may know, we have been going in the quite same direction in Sweden (however our state-owned rail company still exists). Theoretical, anyone can start a train operating company in Sweden. As long as you have rolling stock, personell and a permission from the Ministry of Transport to operate trains. Some small companies have actually been started this way.

Could I do the same in the UK? If, for example, I got my hands on a class 90 and some MK3s (and had the money needed), could I start operating trains on the WCML bethween London and Scotland and try to steal some passengers from Virgin? Or do they alone have the right to operate express trains on that particular route?

Thank you for an aswear, and I´m sorry for my maybe-not-so-good English...

 

[Qwerty133]

Quick answer: no

 

[Cherry_Picker]

There are open access operators in the UK. Network Rail will sell track access to them and they can run trains. This might be a company like Hull Trains or Grand Central who operate a passenger service that most passengers probably don't know is any different to services franchised out by the government, or it might be to charter trains in heritage traction over obscure routes. So yes, in theory anybody can start their own train operating company. You will need a fair amount of cash to get up and running.

 

[maniacmartin]

In theory, yes. Open Access Operators such as Grand Central and Hull Trains were started this way, without getting a franchise from the DfT.

You would, however, need to get approval from the ORR (Office of Rail Regulation). They will not approve your operations there is no spare capacity on the sections of track you wish to use. You will also not get approval if your proposed routes are deemed to be in too much direct competition with a franchised TOC, as it would result in a loss of revenue for them. This is why Grand Central and Hull Trains do not call at intermediate stations between Doncaster and London, such as Peterborough, and they diverge off the ECML.

To operate regular (non-Charter) passenger services on Network Rail track, I believe (but am not certain) that you would be required to join ATOC and implement their policies such as the National Rail Conditions of Carriage. I believe that you would have to sign the Ticket & Settlement Agreement, which would mean you'd have to accept tickets sold by other TOCs and would be obliged to sell ANY PERMITTED tickets if passengers requested them, sharing the revenue with other interavailable operators.

An example of a section of rail that Virgin had passenger service exclusivity until their franchise recently ended is the WCML avoiding Northampton. This is why all London Midland services used to go via Northampton.

 

[tbtc]

If you have enough money, yes.

But you'd need deep pockets, plus you'd need to find a route that isn't already covered by existing services on a route with spare paths (which would probably be something fairly unprofitable/ marginal). Not London to Glasgow, but you could claim there's an unmet demand between Darlington and Sunderland or between Peterborough and Skegness (to pick a couple of pairs of stations in "quieter" areas that lack a proper direct service).

Basically, you can make a small fortune out of running a service, but only if you have a large fortune to start with.

 

[Blillpers]

Thank you for your answears!

We have one company here in Sweden, which have started to operate luxuary trains bethween Stockholm and Gothenburg (largest and second largest cities). This is also the absolutely busiest mainline in the country. Their 80 mph luxuary train doesen't mix very well with the usual 125 mph expresses, so they have got pretty lousy train slots. Their services take 4 h 30 min, the normal expresses just over 3 h...:roll:

 

[Alfie1014]

Most importantly you would need to have a safety case, to demonstrate that you and your staff could operate safely on the network. Need the relevant licences and agreements for access to track, stations, depots, ticketing and (revenue) settlement, demonstrate you have trains to operate, either purchased out right or agreements with leasing companies. Demonstrate to the relevant authorities that you have a financial backing and model going forward to maintain your operations.

Quite a mountain to climb, which goes some way to explain that only those with deep pockets can really afford to play with big trains.

 

[Simon11]

There is also the thought that neither open access operator is run indepentently.

 

[tractakid]

In relative terms, how easy would a Stockport-Stalybridge OAO be to set up?

 

[Simon11]

In relative terms, how easy would a Stockport-Stalybridge OAO be to set up?

It depends if you forever wish to loose money!

The routes will the biggest revenue pot will always generally be towards london.

 

[TEW]

You need a lot of money. Both Hull Trains and Grand Central are now backed by major transport groups, Arriva/DB and First Group respectively. Alliance Rail who are forever trying to get paths for what look like rather optimistic services are also backed by Arriva/DB.

 

[sheff'd victoria]

If you have enough money, yes.

But you'd need deep pockets, plus you'd need to find a route that isn't already covered by existing services on a route with spare paths (which would probably be something fairly unprofitable/ marginal). Not London to Glasgow, but you could claim there's an unmet demand between Darlington and Sunderland or between Peterborough and Skegness (to pick a couple of pairs of stations in "quieter" areas that lack a proper direct service).

Basically, you can make a small fortune out of running a service, but only if you have a large fortune to start with.

Dear bank manager, please lend me some money to start up The Lincolnshire Railway Company

 

[work-traveller]

Wrexham and Shropshire stated running trains from Wrexham/Shrewsbury to Marylebone, via a converluted route through the West Midlands. They operated with Class 67 locomotives and Mark 3 carriages, all refurbished in quite a classy way. Because of the quality of the onboard service and spacious carriages (compared with Chiltern stock) it was always a popular service. Indeed I know people who commute from Leamington to Marylebone every week and deliberately used to wait for that train to come through, in preference to the far larger number of Chiltern trains passing by.

However, this operator is no more. As far as I understand it the main reasons are a) they received no state subsidy, unlike most operators and b) Virgin Trains prevented them from calling at Wolverhampton as this was picking off a lot of their customers. So - subsidy and contractual entitlements seem to be some of the main pillars of operating a rail service in this county in essence.

 

[johnb]

WT: yes and no. They were finished off by the recession. Their business plan (obviously - they weren't idiots) took into account that they wouldn't get subsidy and that they'd be subject to the WC MoC conditions. It projected they'd make enough money anyway. Unlike the franchised operators, when they didn't make the money they'd projected, they had no alternative but to close down.

 

[jon0844]

We have one company here in Sweden, which have started to operate luxuary trains bethween Stockholm and Gothenburg (largest and second largest cities). This is also the absolutely busiest mainline in the country. Their 80 mph luxuary train doesen't mix very well with the usual 125 mph expresses, so they have got pretty lousy train slots. Their services take 4 h 30 min, the normal expresses just over 3 h...:roll:

What sort of luxuries do they offer out of interest? I can see how people might be happy to take a bit longer if there's a good reason - like a decent meal on the train or super comfortable seats etc.

In fact, while you might ordinarily expect a slower train to be cheaper - I can see that, if done right, you might actually be able to charge more.

I've used the X2000 quite a few times and one time I actually felt a bit sick, so perhaps a slower journey might suit anyone that feels sick when using a tilting train.

Edit: Is it this one? http://www.travelgatesweden.se/2012/01/27/new-classic-train-route-stockholm-goteborg/ < Looks pretty interesting. Like a regular charter service.

 

[Blillpers]

Well, they offer a full restaruant service onboard, with food prepered by the train's own chef. They also use older, but very comfortable 1st class carriages (built in the 60s).

Quite a lot of people are getting a bit sick on the X2. However, SJ have recently reinstated loco-hauled expresses on the major mainlines. They call at the same stations as the X2s, and are just slightly slower (about 20 minutes longer from Stockholm to Gothenburg).

 

[jon0844]

Sounds good. Might have to check that out one day, although for now most of my journeys are actually from Malmo to/from Stockholm, not Gothenburg.

 

[Cherry_Picker]

Wrexham and Shropshire stated running trains from Wrexham/Shrewsbury to Marylebone, via a converluted route through the West Midlands. They operated with Class 67 locomotives and Mark 3 carriages, all refurbished in quite a classy way. Because of the quality of the onboard service and spacious carriages (compared with Chiltern stock) it was always a popular service. Indeed I know people who commute from Leamington to Marylebone every week and deliberately used to wait for that train to come through, in preference to the far larger number of Chiltern trains passing by.

However, this operator is no more. As far as I understand it the main reasons are a) they received no state subsidy, unlike most operators and b) Virgin Trains prevented them from calling at Wolverhampton as this was picking off a lot of their customers. So - subsidy and contractual entitlements seem to be some of the main pillars of operating a rail service in this county in essence.

It was actually a pretty direct route through the West Midlands, covering most of the old Grand Junction railway's path through Birmingham. If WSMR were not screwed over by politics, ie being barred from calling at Wolverhampton, New Street, International, Coventry & Leamington Spa and if they were allowed to take the HST speeds over the Chilterns then they would probably still be running today.
WSMR is definitely an unfortunate example of how things can be unfair for an open access operator trying to compete with the big boys.

 

[route:oxford]

WSMR is definitely an unfortunate example of how things can be unfair for an open access operator trying to compete with the big boys.

If DB Rail aren't one of the "big boys"... Who is?

Best way to start an open access operator is to subcontract everything except the branding to a major rail group.

 

[Bevan Price]

To add to the comments by Alfie 1014 - anyone with very big pockets could bid to take over any franchises due for renewal. To start your own, you would probably need the backing of somebody like an oil magnate or a Russian multi-billionaire.

 

[tbtc]

If WSMR were not screwed over by politics, ie being barred from calling at Wolverhampton, New Street, International, Coventry & Leamington Spa and if they were allowed to take the HST speeds over the Chilterns then they would probably still be running today

Firstly, the rules were there before they applied for any paths. Nobody "screwed them over", nobody moved any goalposts. They knew what they were getting themselves in for.

Secondly, WSMR went for a very "high end" operation. Full catering facilities, plenty of staff etc. At the end the talk was of "fifty five jobs lost" yet they were only running three return journeys a day. That's a lot of jobs to pay for. If the operation was more "basic" like Hull Trains then maybe it would have done better. We'll never know, of course.

Thirdly, the opportunity cost of the WSMR stock may have had some bearing on it's demise. DB saw that they could convert the 67s/ Mk3s to enhanced capacity on the Marylebone - Moor Street service, rather than an "Orient Express" quality service to Wrexham.

 

[Cherry_Picker]

I didn't really want to turn this into a WSMR debate, but I think it is worth pointing out the following:

1] The paths were agreed because they were all that were available. If WSMR were allowed to call at the busy stations they passed through without stopping at and had been given normal paths where they didnt get looped constantly (like a franchised service would) then they would have been able to attract passengers without having to go for...

2] ... a silver service/orient express/high end (or whatever) business model, something they only really did because they needed something to attract passengers who would have to put up with overly long journey times which in turn meant that...

3] ... as the WSMR trains were full then the stock may not have been utilised over the Chilterns.


It's all speculation of course, and we are where we are right now because things didn't work out. I don't think that detracts from the over riding point that while yes, anybody (in theory) can start their own train operating company in this country the odds are definitely stacked against them and they will almost certainly have to put up with a lot of problems that simply dont happen to passenger services ran by franchised companies.

 

[ChiefPlanner]

There are examples in Germany for instance - Koln to Hamburg open access akin to WSMR which did not last long.

Not that the national operators have things stitched up - but running a stand alone service of any kind is frightfully expensive. (I recall an individual who wanted to run an off peak Canterbury to Cannon St run - madness !)

 

[DynamicSpirit]

As an interesting side-question... how about if a company with deep enough pockets found what it thought was an untapped commercial market on a route that had no railway, and decided to build its own tracks and run its own commercial services without ever touching Network-Rail owned infrastructure? What legal obstacles would a company wanting to run services in that way face? Clearly it's legally possible - the existence of so many private heritage railways shows that, but this thread has made me wonder what legal difficulties such a company would face.

 

[Lrd]

As an interesting side-question... how about if a company with deep enough pockets found what it thought was an untapped commercial market on a route that had no railway, and decided to build its own tracks and run its own commercial services without ever touching Network-Rail owned infrastructure? What legal obstacles would a company wanting to run services in that way face? Clearly it's legally possible - the existence of so many private heritage railways shows that, but this thread has made me wonder what legal difficulties such a company would face.

Fairly sure you may need an Act of Parliament to build a new railway.

The private heritage railways are just that, heritage, they were built years and years ago and were in regular use until they were closed down and a private company took over.

 

[johnb]

If you wanted to build a new railway solely on land that you owned, that would be allowable subject to regular planning rules. This is (effectively) what the shuttles at Gatwick and Stansted are.

An Act of Parliament would be required for anything that wasn't contained within a large commercial or industrial development like an airport, because you'd need to compulsorily purchase at least some of the land to build the railway on.

 

[Garmoran]

You will also not get approval if your proposed routes are deemed to be in too much direct competition with a franchised TOC, as it would result in a loss of revenue for them.

To operate regular (non-Charter) passenger services on Network Rail track, I believe (but am not certain) that you would be required to join ATOC and implement their policies such as the National Rail Conditions of Carriage. I believe that you would have to sign the Ticket & Settlement Agreement, which would mean you'd have to accept tickets sold by other TOCs and would be obliged to sell ANY PERMITTED tickets if passengers requested them, sharing the revenue with other interavailable operators.

I wonder whether Scotrail has lost much revenue to West Coast Railways now that WC have started operating a second daily steam service on the Mallaig line. Local opinion is that West Coast has captured many of Scotrail's daytrippers in spite of the cost of their fares.

And do West Coast operations on the Mallaig line count as charters? Their tickets don't seem to be interchangeable (not surprisingly, as a Scotrail ticket is half the price of a Jacobite ticket)