Watchdog concerned by bus and rail overlaps

 

northernVisualisation of a new Northern Rail train

 

The Competition and Markets Authority has called a full ‘Phase 2’ inquiry into the reduced competition between public transport services resulting from Arriva’s takeover of the Northern rail franchise in April.

It means Arriva faces an in-depth route-by-route investigation into whether overlaps between Northern and its other bus and rail services across the north of England could enable the company to abuse monopoly positions.

The inquiry was called after Arriva decided against offering undertakings to address concerns expressed by the CMA following its initial examination of the market. The CMA said it had found 44 Arriva bus routes where there is limited or no competition from public transport operators other than Northern. In addition, the CMA’s examination of Arriva’s existing rail businesses including CrossCountry, Tyne and Wear Metro and Grand Central found 38 train journeys where Arriva’s ownership of the Northern franchise has created similar competition issues. The competition watchdog claimed these overlaps between Northern and Arriva’s existing bus and rail services could lead to higher prices or a reduction in service quality for passengers.

An Arriva spokesman told Passenger Transport that initial discussions with the CMA on potential undertakings had not provided grounds to resolve the issues.

“We are of course disappointed to have reached this point,” he said. “However, during this process it became apparent that the development of a package of measures which would have been acceptable both to the CMA and to Arriva was unlikely without the more detailed assessment that Phase 2 allows for.”

If the Phase 2 inquiry upholds the original findings or uncovers new ones, a CMA spokeswoman said potential remedies that could be imposed on Arriva included ordering the company to sell bus routes, controls on Arriva’s bus and rail fares and frequencies, or ordering that some services must be taken out of the Northern franchise.

The inquiry will last until November and be conducted by a panel of independent competition experts.

 

This story appears inside the latest issue of Passenger Transport.

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