Outlook: How will this rail rivalry work?

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The Independent Online
THE deregulation of the bus industry had an interesting impact on behaviour. In some parts of the country it became commonplace to see rival operators leapfrogging one another's services in order to get to the bus stop first. Good news for passengers. Bad news for road safety campaigners.

Now the rail regulator is planning something similar for the train operating companies, except of course that trains cannot overtake one another quite like buses.

From September next year up to 20 per cent of the revenues that the current franchisees earn will be open to competition. Not real competition in the sense of two rival operators vying for the same passengers. In fact it would be better to call it substitution. Those operators who are making a poor fist of running a particular service will find it taken away and reallocated.

Details of how this will work are hazy. First the regulator will have to define what constitutes a "failing service". Then he will have to decide what to do with point-to-point franchises like the Gatwick Express where it will be difficult to reallocate only a portion of the route.

If the regulator does nothing more than ensure the train operating companies improve their most profitable routes sufficiently to hang on to them, then he will argue the exercise has been a success.

But the railways are an industry where the physical limits of the infrastructure make real competition well nigh impossible. The time to have extracted maximum benefit for passengers was when the franchises were first let. But that is another story.