Train operators under fire from CMA
The train operators of the UK are (rightly) getting it in the neck again, looking at lower incomes and allowing other operators to compete with them on their lines, thanks to new proposals from the Competition and Markets Authority (CMA).
In a report send to the Secretary of State for Transport, the CMA said that they've been looking at making the competition between train operators even greater. They'd like to see 'on-rail competition', which means you won't have one company running services on their own, in a given area.
The idea is that more competition on the tracks will mean companies will have to make their prices fairer and, of course, offer better services, as those that are lousy, will lose out to those who get their fingers out.
They could also be made to pay a bigger contribution in track access charges, which basically means that they'll have to help fund unprofitable services. These services are important though, as the CMA were looking at those in rural areas, which are covered in the Public Service Obligation (PSO) levy.
Don't get too excited though - these are only proposals, and they won't affect current franchises and the awarding of upcoming franchises. However, the CMA have said that "action is needed now", thanks to the state of the train services in the UK at the moment.
CMA chief executive Alex Chisholm said: "There are legitimate concerns about the impact that greater competition might have on the income received by government from franchise operators but so far that concern has been tackled in a way that hinders new entrants."
"We think a better way would be to have a level playing field – where competing operators are able to make more of a contribution to network costs and to funding unprofitable services. In return they would get more freedom to compete for business against the franchise operator."
We’ve found that there is strong evidence, both here and abroad, of the benefits that the introduction of competition on mainline intercity routes can bring. Where competing operators have been given the opportunity, the need to attract passengers who have a choice can mean lower fares, new routes and destinations, more innovations and flexible ticketing."