Train operators will not face competition

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One of the key justifications for rail privatisation, the opportunity for competition between different operators, has been ruled out by the Rail Regulator until well into the next decade.

In a statement of his policy on competition on the railway, John Swift QC, the Rail Regulator who is responsible for protecting train operators and passengers in the new privatised system, said that existing train operators would have to beprotected against new competitors until the end of March 1999, and for the following three years would face limited competition.

The railway network has been broken up into 25 areas, which are being scheduled for franchising out to the private sector from the end of next year. Originally the Government had envisaged that they would face competition from operators willing to run trains on the same lines with the potential of cheaper fares or better service.

However, Mr Swift now says it is necessary to protect those franchisees from unexpected competition.

"I do not believe it would be wise to expose train operators or passengers to the risks of experimenting with uncontrolled competition," he says.

Most franchise bids are expected to come from management buy-out teams and privately many have expressed concern at the prospect of competitors "cherry-picking" the best trains.

Ministers had already intimated that competition would be muted in the early stages but Mr Swift's statement ensures that bidders will not have to worry about rival operators. He said that there would be sufficient competition within the bidding process for franchises but so far there has been very little interest from the private sector.

Mr Swift's statement provides further embarrassment for the Government which is becoming increasingly embattled over rail privatisation.

Henry McLeish, Labour's spokesman on transport, said: "The ban on competition is just the shambles rail privatisation has become."