Private rail firms given guarantee of monopolies

THERE WILL be virtually no competition between rival rail operators for at least five years after privatisation, ministers have conceded.

Commuter and regional rail services will be franchised off as monopolies and even private operators bidding to take on InterCity services will in most cases be guaranteed exclusivity.

This emerged yesterday as the Department of Transport published detailed proposals setting out how private operators will gain access to the rail network and the basis on which they will be charged.

The document says 'to the extent that it is necessary to ensure the success of the first generation of franchises, on-track competition between operators of passenger services may have to be moderated for a limited and specified period'.

Open access - the system whereby rival operators will be allowed to offer competing services on the same track - will not be introduced until a later stage.

Last week the Government announced that seven lines accounting for one-third of British Rail's pounds 2.1bn passenger income would be the first to be offered for franchise. They include InterCity's East Coast main line from London to Scotland, the Great Western main line from Paddington, Network SouthEast's south western division, the Victoria-Gatwick express and the whole of Scotrail.

The typical length of franchises has been suggested as five to seven years, although in some cases they may last as long as 15 years.

Roger Freeman, transport minister, said yesterday that it would not be possible to have competition on commuter services such as Network SouthEast because there was not enough capacity at peak times to run rival trains.

Mr Freeman also hinted that the Government would oblige franchisees on Network SouthEast to accept travelcards and tickets issued by BR or other private operators. 'There may be circumstances where this is made mandatory,' he said.

Under the proposals, published yesterday, Railtrack, the government body which will take over the ownership and management of the rail infrastructure from BR, will levy charges to cover running costs and investment. The organisation will have to achieve a set rate of return, probably 8 per cent.

Where private operators cannot meet the charges, these will be met through a subsidy paid by a government-appointed franchising director who will be responsible for awarding passenger franchises and monitoring the quality of service standards.

The first franchises will be awarded in the spring of next year and will later form part of the 1994 national rail timetable.

The charging proposals received a lukewarm response yesterday from companies which have already announced an interest in operating rail services.

Sea Containers, the transport company run by James Sherwood, said it was concerned that it might be difficult to operate profitably with Railtrack having control over such an important element of a franchisee's operations. 'Either it will have to operate in a very commercial manner or the franchisees should be allowed to manage and run the rail infrastructure,' a spokesman said.

Richard Branson's Virgin group, which would like to just operate non-stop InterCity services to Edinburgh and Newcastle, said: 'We do not believe we could take on any of the franchises offered by the Government on our own.'

News
peoplePerformer had recently been diagnosed with prostate cancer
News
The surrealist comedian at the Q Awards in 2010
people
News
i100
Arts and Entertainment
Media baron Rupert Murdoch owns News Corps and 20th Century Fox
theatrePlaywright David Williamson is struggling to find a big name to star as the media mogul
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
News
i100
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Arts and Entertainment
JK Rowling will not be releasing a 'romance' novel anytime soon
books
Life and Style
tech

Of all the computers Apple has ever made there’s only one that Steve Jobs had to sell his car to finance

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

2nd Line server support - Microsoft certified

£25000 - £30000 Per Annum: Clearwater People Solutions Ltd: Our large organisa...

Systems Tester - Functional/Non-Functional/Full Life Cycle

£20000 - £22000 per annum: Ashdown Group: Systems Tester - Functional/Non-Func...

SQL Developer with T-SQL, Watford, Hertfordshire - £350 - £360

£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...

Business Intelligence Consultant - Central London - £80,000

£65000 - £80000 per annum: Ashdown Group: Business Intelligence Consultant - C...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?