The CMA has cleared the award of the TransPennine Express rail franchise to First TransPennine Express Limited, a subsidiary of FirstGroup.
The franchise, which provides inter-urban services in the north of England, offering direct connections between cities including Leeds, Liverpool, Manchester, Newcastle and Sheffield, as well as cross-border routes from the north-west of England to Scotland, was awarded to First TransPennine Express Limited by the Department for Transport in December 2015.
The Competition and Markets Authority (CMA) examined overlaps with other rail services and determined that the franchise does not give rise to a realistic prospect of a substantial lessening of competition (SLC). This is primarily because of the competition provided by Northern Rail on the line between Selby and Hull.
The CMA also considered whether the award could reduce the number of bidders for future rail franchises, or provide an advantage to FirstGroup the next time the franchise is awarded, but it did not regard either as a realistic prospect.
In relation to competition between rail and bus services, the CMA could not rule out the possibility that the franchise award may result in an SLC between Huddersfield and Marsden as combining its bus services with the franchise would give FirstGroup a very high share of public transport services. However, it has exercised its discretion to apply the ‘de minimis’ exception where small markets are affected, and therefore has not referred the franchise award for an in-depth investigation.