CMA urges government to reform rail franchising methods

The Competition and Markets Authority (CMA) has called on the government to overhaul rail franchising and to consider replacing it with multiple operators running services on the same lines.

In a report, the competition watchdog advised that the move could lead to lower fares, greater incentives for rail firms to improve services and more effective use of network capacity.

The report, entitled Competition in passenger rail services in Great Britain, found that utilising open access operators such as Grand Central and First Hull Trains provides competitive benefits which are already being implemented in other European countries and transport markets.

The report stated that increasing the number of open access services would result in a ’significant passenger, efficiency and wider economic benefits’, with competition between three of more licensed operators replacing franchises likely to ‘generate the strongest on-rail competition’.

In particular, the study claims that the East and West Coast main lines and the Great Western route have the greatest potential to benefit from competition.
Alex Chisholm, CMA chief executive, said: “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.”

A spokesman for the Department for Transport said: “As the CMA recognises, any reforms to the industry must protect taxpayers’ interests and future investment in the railways, which is critical to delivering the best services for passengers. We will now consider the CMA’s report and respond shortly.”