Posted 12th July 2017 | 5 Comments

Competition concerns on routes to Exeter

THE Competition and Markets Authority has voiced concerns about the implications of a FirstGroup-led franchise taking over the Southern Western network next month, because both routes between London and Exeter will then be run by the same company. A major probe could follow unless the Authority receives suitable undertakings from the new operator.
A joint venture of FirstGroup and MTR has won the South Western franchise and will take over from Stagecoach on 20 August. The change will mark the end of 21 years of Stagecoach operations from London Waterloo, but the Authority is concerned about the prospect of fare increases on train services from Exeter to London, which run to Waterloo or the GWR terminus at London Paddington.
As FirstGroup already runs GWR, the Authority said it was concerned that FirstGroup having control of both services ‘could reduce competition on the route, leading to higher fares or worse service for passengers’.
The Authority’s acting chief executive Andrea Coscelli said: “This is a crucial rail route to the South West, used by around half a million passengers a year. It’s therefore vital that passengers do not suffer as a result of reduced competition.
“The CMA believes that without its intervention, FirstGroup may be able to increase fares for passengers between London and Exeter, as it will be the only rail operator running all services on this route. We look forward to hearing from the companies involved about how they think they can overcome this.”
FirstGroup and MTR now have the opportunity to offer proposals (described officially as ‘undertakings in lieu of reference’) to the Authority. If these undertakings are considered sufficient, the companies involved will be able to avoid what is known as an in-depth phase 2 investigation.
FirstGroup said: “We have been discussing our plans for the new South Western franchise with the CMA for several months and we are pleased that on most routes, it has found no competition issues. Now that this update gives more clarity, we look forward to submitting our proposals which we envisage will satisfy their concerns.’
In previous cases, such the recent award of the Northern franchise to Arriva, the Authority’s concerns were resolved by the operator agreeing to impose price caps.

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • David Cook, Broadstone, Dorset

    As a regular user of both routes into Exeter (via Salisbury or via Castle Cary), I see no problem in having First Group having an involvement in both lines. In fact, it may well be advantageous for train connections, particularly at Yeovil. As to competition, the worst time we ever had for competition was when the railways were run by the Government after nationalisation. There was no competition whatsoever, and nobody had the slightest interest in passengers views. The main change I can see coming is (hopefully) is a whole load of revenue inspectors on the SW lines like they have on GWR. First Group has paid quite heavily for these lines and they'll want to get their money back. The number of people travelling on the Bournemouth/Weymouth line without tickets at times is quite high, there is nothing more irritating than having to stand when you know there are quite a few people seated who have no intention of buying a ticket....

  • claydon william, Norwich, Norfolk

    When it comes to planning franchise awards, we have completely forgotten how important it is to keep costs and fares down using the 'natural' competition our rail network affords.

    Nearly every large city/town in this country has services to multiple London termini as a result of their Victorian builders competing amongst themselves.

    Recently we've seen Anglian services rolled into one franchise, Virgin running east and west coast Scottish routes, no competition on London-Manchester to 'protect' the Virgin franchise, and now 'First' running GW and SW.

    We really need to get back to having separately marketed franchises and services branded 'InterCity', 'Regional', and 'Metro/Cityrail' services; with no one holding group operating more than one franchise of each type; to encourage competition.

    The current set-up of the franchises is based upon operational convenience, rather than customer service, and this needs to change quickly IMO

  • Jonathan Brain, Sidmouth

    Over the years that I have experienced the Waterloo - Exeter route the service has been much improved and has always been the preferred choice for cost, speed (door to door journey time) and convenience.

    Existing issues for new franchisee to address:
    (a) Too many overcrowded 3 coach journeys West of Salisbury.
    (b) Double tracking and timetabling has shown imagination, but full double-track restoration between Salisbury and Exeter is long overdue - and should have been included with the A303 improvements (again a route which is unrecognisable from when I first experienced it) as part of a co-ordinated transport policy within an area of increasing development.
    (c) New stock would need to be AC/DC/Diesel hybrid of some sort.
    AC needed as with Reading-Southampton AC plans it would make sense for Salsibury to be AC and then slowly extend AC Eastwards from Basingstoke - treating the existing DC main-line infrastructure as an anamoly to be gone by 2117!
    (d) More reliable bus / train connections. Stagecoach could not manage this with both trains and buses being under its control.

    Concerns - how will these be handled?
    (a) Turn up and go return ticket prices.
    If the current nationwide ticket system is not torn up and rebuilt (which is long overdue) in the meantime. All that ever seems to happen is tinkering at the edges.
    (b) Continuation of through rail / bus tickets (e.g. Sidmouth - should similar be added elsewhere?).

  • Chris Jones-Bridger, Buckley

    Well what a surprise that the CMA has woken up to the reduction in competition on the Exeter route. Will a review really change anything? Given other such interventions in the rail industry I think not that anyone will notice. All bluster and more wasted time & effort adding no value to the passenger expectation or experience.

  • david c smith, Bletchley

    This was one of the few routes where competition actually existed. The only prime intercity service I can think of where there is effective competition is London - Birmingham, between Virgin, Chiltern and London Midland.

    One of the main flaws in our franchising system is the way that it throws up a series of state controlled private monoplies with little incentive to innovate or invest long term. Just the sort of setup that the prewar fascist dictators would have loved !