Office of the Rail Regulator

Rail Regulator publishes objectives for rail freight

date 9 October 1997   source Office of the Rail Regulator   type Press release

Issuing his objectives for rail freight, the Rail Regulator, John Swift QC, today spoke of "an historic opportunity for growth". He called on train operators to deliver market growth through improvements in product range, quality, price and customer service, and on Railtrack to develop and implement a comprehensive strategy for freight. He also described how Government action, through grant support and wider transport and environmental policies, together with specific regulatory action on his part to reduce administrative burdens, could help secure rail freight growth.

Outlining his strategy for the development of rail freight now that the restructuring of the industry is almost complete, the Regulator said, "There is a prospect of - and a social and economic need for - growth after a long period of decline. I will need to understand freight users' needs, speak up for their interests, and use my powers and influence to ensure that the rail industry meets freight needs.

"The main task of delivering this growth falls to the freight train operating companies, who I believe have the incentives to deliver the improvements in product range, quality, price and service needed to increase rail freight's market. I believe they should be free to develop the market in this way and am therefore anxious to avoid unnecessarily constraining or putting undue administrative burdens on these companies.

"But", he warned, "they must act fairly. My policy also includes affording the necessary regulatory protections against the potential misuse of dominant market positions, in particular:

anti-competitive or exclusionary behaviour in respect of existing or potential competitors, and also the unfair use of market power over the rail supply industry to anti-competitive effect; or
exploitation of dependent rail freight customers through excessive pricing.
"In respect of Railtrack my objectives are to ensure that it supplies rail freight with enough capacity efficiently, effectively and at the right price, to allow it to thrive, and to ensure that Railtrack's broader investment and property management actions contribute to the development of rail freight. I expect Railtrack to:

develop a clear approach to meeting the capacity needs of freight;
adopt a positive, proactive, facilitative approach to freight customers;
act to improve its efficiency and reduce the costs of freight operations;
allow the development of new open access business; and
manage its property estate in a manner which takes proper account of the needs of freight.
"I intend to monitor closely Railtrack's delivery of the promises it has made.

"Government - at local, national and EC level - has a major role to play in providing the wider policy environment within which rail freight can develop", he continued. "I will maintain an effective dialogue with all levels of government on matters concerning the development of rail freight."

The Regulator concluded by confirming his commitment to reducing administrative complexity.

"I believe that further simplification of the contractual matrix could be consistent with my duties and I propose to work with the industry to identify where such simplification can be achieved and take the necessary action on my part to secure this objective."

In setting out his objectives the Regulator has been able to draw on a research report which he commissioned earlier this summer to advise him on rail freight's potential for growth in Great Britain. This report is also published today.



Notes to editors

1. Regulatory Objectives for Rail Freight is the third in a series of objectives issued by the Regulator. It follows Regulatory Objectives for Railtrack, published in January 1997, and Regulatory Objectives for Passenger Train and Station Operators, June 1997. All are available, free of charge, from Sue MacSwan, ORR Library, 1 Waterhouse Square, 138-142 Holborn, London EC1N 2ST. (Tel: 0171 282 2001; Fax: 0171 282 2045; E-mail: orr@dial.pipex.com).

2. The Potential for Rail Freight report was produced by a team led by National Economic Research Associates (NERA) in association with MVA, Symonds Travers Morgan and the Institute for Transport Studies at the University of Leeds. It is also available from ORR Library.

Railnews Archive ::: 1997-10-09 ORR-001

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