It's a common thing with many companies, not just in the rail industry, to advertise outside and internally, and most of the time internal applications will be favoured. Part of the problem is that I don't think companies are actually allowed to just advertise internally, but there is nothing at all to stop them favouring internal candidates. I know my company recently advertised two positions, one lower management and one senior management, and although both were advertised externally and we did have external applications AFAIK all the interviews were internal, in fact for the senior management position is was pretty much a formality (still applied though).
Providing feedback I presume means they will let you know how you would have done had they decided to take external candidates. Of cource sometimes you get lucky and find that they they haven't got enough internal applications, or they are not up to standard.
