Train passengers will benefit from lower fares and better connectivity if services run by private companies are “embraced” under the Government’s nationalisation policy, according to a report.
Transport giant FirstGroup said open access routes – which are operated by private companies – mean locations receive services that would “otherwise require taxpayer subsidies”.
This comes after Transport Secretary Heidi Alexander expressed concerns that the open access model can cause “potential congestion” and result in taxpayers being “left to fill shortfalls” in maintenance costs.
The vast majority of trains in Britain are run by operators either owned or paid management fees by the UK, Scottish or Welsh governments.
In contrast, open access operators set their own fares, take on all revenue risk and receive no taxpayer-funded subsidies.
FirstGroup, which owns open access operators Lumo and Hull Trains, is planning a major expansion of these services, including:
– Between Sheffield and London King’s Cross, calling at Retford, Worksop and Woodhouse.
– Between Rochdale and London Euston via stations such as Warrington Bank Quay and Manchester Victoria.
– Between London Euston and Stirling, calling at stations across the Scottish Borders and elsewhere.
– Between London Paddington and Carmarthen in south-west Wales, via Severn Tunnel Junction, Gowerton and Llanelli.
This comes as the Labour Government has committed to bringing all services running under Department for Transport (DfT) contracts under public ownership over the next three years.
FirstGroup’s report stated that travel on open access services is often cheaper than by traditional operators.
It gave the example of Lumo’s fares being “around one third to one half lower than fares offered by other operators”.
The report also stated that track access charges paid by open access operators to Network Rail are set at a level to “incentivise new, commercially operated services to underserved areas … which would otherwise require taxpayer subsidies under traditional rail models”.
It added: “This arrangement is proportionate given the significant value open access operators bring to the communities they serve.”
Steve Montgomery, managing director of First Rail, part of FirstGroup, said: “Open access has delivered huge improvements to the railway over the past two decades.
“As the Government embarks on significant rail reform, it is vital open access is embraced and allowed to deliver more, rather than being marginalised.
“Leading that delivery is our mission.”
Regulator the Office of Rail and Road (ORR) is responsible for assessing whether to approve new open access applications.
FirstGroup said it is vital that the ORR “retains its decision-making powers to ensure it drives innovation and creativity in timetabling for the benefit of all rail users”.
It also called for the process of reviewing applications for new open access routes to be accelerated, as it currently takes “up to five years” for services to launch.
Ms Alexander wrote to ORR chairman Declan Collier earlier this month, stating it is her “expectation” that “the impacts on the taxpayer and on overall performance” are “given primacy” by the regulator when it analyses proposals.
While acknowledging that open access can “open up new markets, drive innovation and offer choice to passengers”, she insisted there is “a balance to be struck”.
She wrote that fees paid by open access operators generally “do not fully cover” the cost of long-term maintenance, and noted the “additional pressures new services can create on already constrained network capacity”.