Next year's winter timetable will allow train companies to apply to run a rival's services - if Mr Swift considers they are failing to meet adequately their customers' demands.
The new policy will allow up to 20 per cent of a train operator's revenue to be up for grabs by rival companies in 1999. More competition could follow if Mr Swift's plans are a success - with a review of the system pencilled in for 2002.
Mr Swift did not give a definition of a "failing service" but the regulator has considerable control over track access charges and timetabling. Mr Swift said the policy would place "additional incentives" on train companies to "achieve and maintain greater benefits for passengers through improved services or lower fares".
At present, train operators enjoy complete protection withintheir franchise area under track access agreements with Railtrack.
There should be little new cost to the taxpayer, according to Mr Swift. "I expect this policy to lead to the introduction of new services such as airport links, services to new developments, to shopping and leisure centres, and park and ride sites, and cross-regional services."
Some train companies have privately voiced their concerns. Connex - which runs two large franchises in the South-east - has made it clear it would prefer no competition. Last year Connex South Central dropped 300 trains from its timetable - at the time many experts said another company should have stepped in to run the service.
Some companies have already launched competing services. The route between London and Peterborough is served by both GNER and WAGN, which last year bought out a "dedicated" annual season ticket for pounds 1,000 less than GNER's.
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