Rail Partners recommending more Open Access (speculative)

[Snow1964]

Rail Partners have informed various media who are carrying the story about potential to save Government money and decrease fares, they cite Spanish and Austrian examples as well as the boom from letting Lumo compete with LNER

The findings from the study reveal where there is competition both for contracts and by operators on the same route, there are significant benefits:

• Reduction in subsidy by 15-50% – subsidy has reduced where contracts have been competed rather than directly awarded, freeing up public money for other uses
• Operational efficiency gains of 20-50% – where national and regional European governments have adopted a competitive tendering process, rather than direct awards, operational efficiency gains have been realised, allowing for more services on the network
• Increased service levels up to 60% on some routes – in the countries examined where operators compete on the same routes, evidence shows that the number of departures increased, offering more choice to passengers.
• An increase of up to 40% more passengers on routes where operators compete, while demand on regional competitively tendered lines outperformed untendered long-distance lines in some countries.
• Fares falling by 15-50% on routes where there is competition, open access operators offered fare reductions of between 15-50% immediately following entry, with fares being typically around 20-60% lower than that of the incumbent over time.

Rail Partners, the trade association for independent passenger owning groups, is calling for a reinvigorated public-private partnership to get Britain’s railways back on the track to growth. While European railways are liberalising and seeing signs of a renaissance, our railway risks being left behind, facing the same choice it did in the 1990s – either setting the railway up for managed decline, or harnessing train companies to replicate their previous success of achieving record passenger numbers and reducing rail subsidy.

A thriving railway boosts the economy and, as a lower carbon form of transport, it can act as an engine for green growth, helping to meet net-zero ambitions and air quality targets. It is widely recognised the railway is not performing as it should, but the scale of the challenges and the time needed for reform to have an impact are often underestimated – the need to make progress is urgent.

What do others think

Going to make DfT look rather silly if the carry on doing the more expensive direct awards

News

media.railpartners.co.uk

EDIT adding link to full report

https://cdn.prgloo.com/media/download/0cf625e0dc16487bbac4ec288920f0e5

 

[Fawkes Cat]

Rail Partners, the trade association for independent passenger owning groups, is calling for a reinvigorated public-private partnership to get Britain’s railways back on the track to growth.

My immediate response on reading the report in the Telegraph was that Rail Partners might not be an entirely neutral party in this argument.

My further (only slightly more considered) thought was that there seemed to be a degree of cherrypicking going on. It would be interesting to know what has happened to fares and frequency on European lines where open access operators have not got involved (maybe broken into those where they are unable to get involved and those where they have chosen not to get involved).

 

[Snow1964]

My immediate response on reading the report in the Telegraph was that Rail Partners might not be an entirely neutral party in this argument.

My further (only slightly more considered) thought was that there seemed to be a degree of cherrypicking going on.

End of report suggests Rail Partners speak for : Arriva, First, GoVia, Mitsui, MTR, Serco, Transport UK (formerly Abellio), Trenitalia UK.

I think it seems to work best on longer distance, or through trains where a main operator doesn't want to serve somewhere off their main network.

Looking at other countries seems most success is where they have picked leisure flows to/from a holiday area, or services to/from a Capital City that manages a fast section linking the two ends.

 

[Grimsby town]

The problem I see with this in the UK is that we don't have huge amounts of spare capacity on major intercity routes to run loads of competing trains. So the current intercity services run by incumbent ex-franchises would have to be contracted out.

I also think our intercity services are too intergrated with our local services. For example Crosscountry and Avanti provide the majority of trains for local flows from Macclesfield to Manchester. I could forsee this causing issues if an open access operator wanted to prioritise long distance trips and have things like compulsory reservations. It also adds another layer of complexity for passengers.

If HS2 is built in full this would rectify these issues. I'd be open to an open access model for HS2 which will mainly serve long distance flows.

 

[SynthD]

If HS2 is built in full this would rectify these issues. I'd be open to an open access model for HS2 which will mainly serve long distance flows.

Is the opposite possible? Once even the fasts are stopping at Milton Keynes, other services could fit in. Eg Tring, Northampton, Lichfield and Stoke.

 

[Bartsimho]

While this is probably lobbying from the rail operators it isn't that bad of an idea.

While Privatisation was meant to create competition the agreements that are signed create very limited competition due to area monopolies.

Now some Long distance routes have competition (London-Central Belt) but beyond that there is little competition outside of the London commuter belt.

Allowing more OAO's to compete with franchises could be good for passengers with fares and quality of service

 

[JonathanH]

Allowing more OAO's to compete with franchises could be good for passengers with fares and quality of service

Depends which passengers. Lumo runs five trains a day each way between London and Edinburgh that stop at Newcastle and Morpeth. It does nothing for passengers not using one of those four stations.

Moreover, some of the ways in which Lumo's costs are lower directly correspond to why rail staff are currently in an industrial dispute.

They arguably offer a lower quality of service than LNER on the route.

 

[Bletchleyite]

Market segmentation is fine, e.g. Lumo as a budget operator. That grows the market.

Straight competition misses the point. The competition is the car.

 

[Snow1964]

Market segmentation is fine, e.g. Lumo as a budget operator. That grows the market.

Straight competition misses the point. The competition is the car.

And air is also the competition.
Can fly routes like Bristol to Edinburgh, because direct train service is relatively slow.

Its about growing rail overall, not abstraction of one rail co vs another.

 

[Bartsimho]

Market segmentation is fine, e.g. Lumo as a budget operator. That grows the market.

Straight competition misses the point. The competition is the car.

And air is also the competition.
Can fly routes like Bristol to Edinburgh, because direct train service is relatively slow.

Its about growing rail overall, not abstraction of one rail co vs another.

I was thinking that based on this article https://www.railtech.com/all/2023/0...-way-for-modal-shift/?gdpr=accept&gdpr=accept

That competition driving fares into a more competitive range encourages more Modal Shift than just having one operator per route.

 

[Bletchleyite]

I was thinking that based on this article https://www.railtech.com/all/2023/0...-way-for-modal-shift/?gdpr=accept&gdpr=accept

That competition driving fares into a more competitive range encourages more Modal Shift than just having one operator per route.

It's one way to lower fares. It's not, in my view, the right way, because rail works best as a cohesive network. Operators need to be incentivised for bums on seats, not simple revenue.

 

[Bartsimho]

It's one way to lower fares. It's not, in my view, the right way, because rail works best as a cohesive network. Operators need to be incentivised for bums on seats, not simple revenue.

But how to you go about encouraging bums on seats. Everything has to pay it's way to some extent so to drive prices down it either needs more subsidies or more competition

 

[JonathanH]

But how to you go about encouraging bums on seats. Everything has to pay it's way to some extent so to drive prices down it either needs more subsidies or more competition

'More competition' doesn't reduce the need for subsidy, it increases it, if the costs increase and amount of revenue doesn't meet that increase.

 

[Bletchleyite]

But how to you go about encouraging bums on seats. Everything has to pay it's way to some extent so to drive prices down it either needs more subsidies or more competition

Competition doesn't create money. If Lumo abstracts from LNER, that means LNER needs MORE subsidy.

If the key issue is high fares (and it probably is to a good extent), increasing subsidy to reduce fares will put more bums on seats.

 

[RT4038]

Competition doesn't create money. If Lumo abstracts from LNER, that means LNER needs MORE subsidy.

Not necessarily. LNER could reduce their service in line with the reduced demand.

 

[Bartsimho]

Competition doesn't create money. If Lumo abstracts from LNER, that means LNER needs MORE subsidy.

If the key issue is high fares (and it probably is to a good extent), increasing subsidy to reduce fares will put more bums on seats.

But LNER's ridership has grown after Lumo entered the market. All the ECML operators have increased their ridership from pre-pandemic. Partly due to more Leisure travellers but for them price is a key factor

 

[Bletchleyite]

But LNER's ridership has grown after Lumo entered the market. All the ECML operators have increased their ridership from pre-pandemic. Partly due to more Leisure travellers but for them price is a key factor

If price is a key factor, reduce fares.

Competition is not needed to do that.

 

[Bartsimho]

If price is a key factor, reduce fares.

Competition is not needed to do that.

If someone is the only one offering that service what is there to stop price gouging.

The only thing determining the market rate is what they decide to charge for it

 

[nr758123]

Rail Partners, the trade association for independent passenger owning groups, is calling for a reinvigorated public-private partnership to get Britain’s railways back on the track to growth.

I'm not sure what an "independent passenger owning group" is. I'm a passenger and no-one owns me.

My immediate response on reading the report in the Telegraph was that Rail Partners might not be an entirely neutral party in this argument.

Quite.

In order to have competition, there has to be spare capacity. There are very few routes in the UK where that spare capacity exists, and it's not coincidence that the report doesn't attempt to identify a single route where their competition model could work.

 

[Bletchleyite]

If someone is the only one offering that service what is there to stop price gouging.

The service is transport, not rail travel. The things stopping it are the price of fuel and the price of flights and coaches.

Only a rail forum would consider the service to be specifically rail travel.

The only thing determining the market rate is what they decide to charge for it

And fares regulation. And competition from other modes.

 

[30907]

The article seems to be advocating European-style tendering (so the spec and fares are set, and it's about who can operate it most economically - sounds like GBR to me) as well as OA.

OA seems to work well in Italy, and the conditions (and initial results) look good for Spain with its under-used HSLs - under-used being the key I think.

Sweden and Czechia are the other countries with a significant amount of OA. My impression is that in both these there was demand that the national operator didn't have the resources to meet - a bit like the Hull scenario here.

 

[ShadowKnight]

And air is also the competition.
Can fly routes like Bristol to Edinburgh, because direct train service is relatively slow.

Its about growing rail overall, not abstraction of one rail co vs another.

On a tangent, I wonder how. Much quicker Bristol/SW to Edinburgh would be via the WCML? As it would not be as slowed down by all the meandering between derby and York?

 

[Bartsimho]

On a tangent, I wonder how. Much quicker Bristol/SW to Edinburgh would be via the WCML? As it would not be as slowed down by all the meandering between derby and York?

I think if it went Doncaster-Derby instead it might be faster.