Posted 8th August 2008 | 5 Comments
Rosco inquiry — Competition Commission blames DfT
The three main Roscos — Angel Trains, Porterbrook and HSBC Rail — have always rejected the DfT’s claims they were overcharging.
THE Department for Transport’s ‘micro-management’ of passenger train operations has been criticised by the UK’s Competition Commission—following an inquiry triggered by the DfT itself after claiming rolling stock leasing companies (Roscos) were overcharging train operators by as much as £177 million a year.
In a summary report, the Competition Commission said the very limited number of rolling stock options available to TOCs when bidding for franchises restricted competition in the rolling stock market. Consequently, train operators have only a very limited choice when it comes to leasing new carriages.
The three main Roscos — Angel Trains, Porterbrook and HSBC Rail — have always rejected the DfT’s claims they were overcharging.
Among its provisional findings, the Competition Commission cites the lack of rivalry resulting from a shortage of vehicles available for lease and the cost and risk of switching rolling stock, among other factors.
The lack of choice was reinforced by the way in which the franchise system operates, according to the Commission. While there was “active rivalry” among rolling stock companies on the first lease, this was little or none on incumbent leases when franchises were being re-let, it said.
The commission recommends the Department for Transport introduces a greater degree of flexibility in the franchising system, or in the procurement of leased rolling stock, to provide a greater choice of rolling stock to train operators.
Commenting on the DfT’s micro-management of franchise bids, the Commission’s deputy chairman Diana Guy told The Daily Telegraph this included the department's refusal to allow operators to buy new trains on cost grounds and the fact that franchises were too short “and not awarded simultaneously.”
The Conservative’s shadow rail minister Stephen Hammond said the Commission “echoed what the Conservatives have been saying for years - that the Government's possessive micro-management of the railways is preventing innovation.”
The DfT complained about Rosco charges to the Office of Rail Regulation two years ago, and the ORR then referred the matter to the Competition Commission in April 2007.
Commenting on the Commission’s interim report Bill Emery, ORR’s chief executive, said: “'We want to create an environment for a more competitive rolling stock market for the benefit of passengers and taxpayers.”
A DfT spokesman said: “We will consider these provisional findings carefully and look forward to discussing alternative remedies with the Competition Commission.”
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
H. Harvey, Birmingham
The old BR liveries were the best. It was easy to determine whether it was inter city or other service.
Now we have 'voyagers' in virgin livery working on the 'new' cross country services.
We have stations that are operated by companies whose trains do not call or even pass through the station
We had through journeys that now require changes to be made despite passengers demanding through services.
We have performance figures showing improvement year on year when trains that used to arrive 10 minutes late require 15 to 20 minutes longer to make the same journey (ie the old service was at least 5 minutes better when it arrived late.
We have restrictions on tickets that politicians would not have been allowed under the BR regime and yet these same politicians informed by their D(a)fT officials that the new ticket regime is a improvement on the old.
We have TOCS and Network Raill exhorting the benefits of unified control rooms that they scrapped on privatisation.
We have possessions that talke months to plan and involve a cast of thousands replacing an inefficient BR system that worked a million times better.
We have track and station improvements and projects that cost £billions when under BR they may have cost £millions and take a day rather than a week without serious passenger disruption or bus substitution.
We have a railway that requires twice the subsidy of BR in real terms and had the difference been invested in the network we would now have a sensibly electrified system and probably a High Speed Line.
In fact rather than the massive investment free of treasury and political interference we have massive subsidy, investment costing twice what it would have done micro management by polticians and the D(a)fT
There are no doubt some 'good' things from privatisation there just to difficult to find.
Joel Kos', London, UK
It's not the length of franchises (still important) but what happens (or doesn't) when they change, apart from giving paint and uniform suppliers money for nothing, giving passengers grief as two different colour trains run the same routes, and wasting effort, millions of pounds and resource. But - as long as each franchise has unique rolling stock (different stock types, different manufacturers, different body shapes and parts, apart from the traction differences), whoever is the next lucky winner on the merry-go-round (didn't win this time? Don't worry, you will next time) is stuck with trains the previous operator had, from the sheer cost of re-equipping, re-training and getting new clearances. This is the economics of a disposable society - never mind, passengers (and taxpayers) will pay; we always did but never so much for so little in return.
robbie craig, Romney Marsh, UK
the conservatives have a nerve commenting on this story. They are responsible for the expensive mess that we now have. To use their own words 'when times were good, they did not put anything away for a rainy day'.
It would be nice if the DfT's ultimarte plan was to imitate the model of rail services that France and Spain operate...
Geoff Steel, Northampton, United Kingdom
This is yet another own goal for the DfT and demonstrates the strangle hold they have on the railway industry. At least when it was a nationalised industry the BRB were able to make all the operational and engineering decisions based on their knowledge and expertise.
John Gaughan, Hanover, PA (Ex Gloucester UK), USA
Instead of the many ridiculous looking liveries for rolling stock, why not have three standard colours. Red for West coast, East coast. Blue for Cross Country,Wales and Green for Great Western, Southern and the rest. The liveries should be professional looking and not all the gaudy scheems of today. As Scotrail are doing, the liveries should be standard when passing from one franchise to another.