Partners want bundles of intercity train paths to be auctioned off, replacing ‘confused and damaging’ blend of franchises and open access services

 

virgintrainseastcoastA Virgin Trains East Coast HST at Edinburgh Waverley

 

Stagecoach and Virgin have urged the government to scrap franchising on intercity routes and adopt a new system that allows train operators to compete directly on intercity routes. They claim that greater “in market” competition would give a better deal to customers and taxpayers.

The two companies jointly run the West Coast and East Coast intercity franchises. They are calling for the new approach to be piloted on these routes, or on the Great Western routes.

The proposal is included in a joint response by Stagecoach and Virgin to a consultation by the Competition and Markets Authority on potential reform of passenger rail services after 2023.

It calls for a licensing system to be introduced on intercity routes in place of franchising. It would replace the current system where the government competitively lets rail franchises, but then other operators are allowed to run selectively competing open access services. The partners say that this approach is “confused and damaging” and “fails to maximise the benefits of competition for rail passengers and taxpayers”.

Under the new licensing system, bundles of train paths would be openly auctioned, allowing for multiple operators to compete on a route “on a level playing field”.

“There is strong evidence that competition can deliver benefits to passengers through lower fares, better service quality and innovation. It can increase rail’s modal share from the private car, its biggest competitor,” the Stagecoach and Virgin response says. “Taxpayers benefit too.”

 

Related coverage in the latest issue of Passenger Transport:

 

‘Reform rail, not bus’ – Stagecoach urges
Bus and rail group says genuine and open competition would enable intercity rail to replicate the ‘stunning success’ of commercial bus networks

Michael Holden: How much competition do you need?
The time is right to reset the organisational model for Britain’s railways and let competition drive greater value and innovation

 

This article appears inside the latest issue of Passenger Transport.

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