Rebates to investors in large rail enhancements

ORR conclusions (26 pages, PDF) on the proposed mechanism to pay rebates to investors (other than DfT and Transport Scotland) in large-scale enhancements to the railway network when the enhancements are used by others.

Differential treatment would apply to public- and private-sector investors. Private sector investors would only be entitled to a rebate when the enhancement is used by one of their competitors, or perhaps by someone else for the benefit of a competitor (with precise definitions to be agreed on a case-by-case basis). Public-sector investors would be entitled to a rebate for use of the enhancement by any operator.

The rebate would be a charge per train movement based on an average cost concept. Details of the calculation, for example in relation to the meaning of "use of" or "benefit from" the investment, would be agreed on a case-by-case basis.

Network Rail's duty to pay rebates to the investor would be incorporated in contracts for the enhancement. ORR would use its access contract approval and direction powers to ensure that additional access charges on competitors or third-party operators are levied in line with the rebate scheme.

The conclusions document does not discuss the basis for the scheme's compliance with competition law and Directive 2001/14/EC.

For further information or advice please contact Franck Latrémolière.

Filed under ORR, Public transport.

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