Work to get Great British Railways (GBR) up and running is gathering steam. Last month saw the consultation launch for one of the most eagerly-awaited components – the Access and Use Policy (AUP).
The AUP is the framework that will govern capacity allocation, set the conditions for companies to access the rail network, and set policies on how any access granted will be charged. Similar policies and processes will apply whether or not capacity is being allocated by GBR to one of its own operators or to non-GBR operators. However, the AUP will be critical to businesses falling within the latter category as they stand to lose out most from decisions taken by GBR about who should be allocated capacity on an increasingly constrained network. Non-GBR operators, such as freight, and concessions such as Merseyrail and TfL's concessions – will need to pay particular attention to the AUP as it goes to the very heart of their business models. There is plenty to learn from the AUP about how GBR intends to operate, and the proposed relationship with both its own train operators and the wider industry.
How will capacity be allocated?
There is limited capacity on the railway, and GBR's remit is to decide how that capacity is best used, whilst retaining capacity for GBR's own future aspirations. The intention of the AUP is to ensure that GBR is consistent across all users of the railway, while maintaining enough flexibility to optimise services, solve practical problems and ultimately deliver for the customer. GBR intends to class capacity across potential uses of the network, including GBR, non-GBR (both public and private) and freight services.
As GBR operators will not need permission to use their own track, going forward access contracts will only be needed for non-GBR operators. The ORR will no longer be required to approve those contracts. Access contracts and capacity commitments – which is how allocated capacity will be known – will be separately progressed by GBR. The AUP contemplates public bodies such as Merseyrail and TfL being capable of holding capacity for use by services they procure – and delegated accordingly.
What are the criteria for making decisions on capacity?
The AUP sets out 29 criteria which will be taken into account by GBR in deciding who capacity commitments will be granted to. These range from devolved government strategies, rail freight and public funding through to purposes of journeys and investment. Such a broad range of criteria means there will be a balancing exercise to be done, and no one clear answer. GBR will have a great deal of flexibility when making decisions as – whilst GBR will have "particularly high regard" to certain individual criteria – no individual criteria is weighted more than another.
Of course, with so many criteria, total alignment will be impossible. There will be differences between local and national priorities. And while the AUP indicates that GBR will seek to address differences through long-term planning, sometimes GBR will be expected to make the final decision using the AUP criteria.
GBR intends to place some weight on continuity of existing service provision, but the AUP recognises this needs to be balanced against the need for change and therefore does not protect existing uses indefinitely. Tellingly, the AUP states continuity 'does not require the continuation of a particular operator' which in a GBR operator-dominated world, leaves a sense of foreboding.
How will GBR charge for access?
While GBR won't be charging itself for access to its own network, non-GBR operators such as freight will find themselves subject to those charges. GBR charges aim to enable proportionate cost recovery, align behaviours with infrastructure cost, and support planning and investment. This is an approach consistent with today's charging framework.
The starting point for charging is the cost which GBR directly incurs as a result of a particular group of services operating – covering items such as track wear and tear, and any specific staffing costs. There will also be ancillary charges under the AUP. These will be set for a five-year GBR funding period and will cover GBR's fixed costs which would be incurred in any event, such as signalling and communications equipment costs, certain staff costs and asset renewal costs. This is something that non-GBR operators will need to particularly scrutinise as the level of cost will have a material impact on their businesses.
What else is in the AUP?
GBR will have a performance scheme. This principally impacts non-GBR operators, as no payments will be made where a train operator delays its own services. GBR will also no longer provide compensation for disruption which is outside of GBR's own control – and assurances are given that this is expected to be interpreted relatively narrowly.
Two types of disruption remain relevant: planned disruption, including for engineering work, and unplanned disruption.
For planned disruption, it appears that GBR will be allowed to take into account its own needs for engineering work, and in those instances compensation may not be payable. Where compensation is payable, it will cover short-term costs and revenue losses only relating to unreasonable levels of disruption. It will be modelled only, rather than being based on actuals – which is narrower than under the present regime.
On the other hand, much like at present compensation for unplanned disruption will be based on short term costs and revenue losses, and will again be on a modelled basis, with no compensation being available above this.
What does it mean for operators?
A lot of thought has gone into the AUP, and it is reflective of an evolution of rather than a revolution of existing principles. What is missing however is how GBR will interface with other infrastructure managers, and how GBR's proposals will impact services which cross boundaries.
The AUP gives a long-awaited view of how GBR is likely to work in practice. Non-GBR operators will however need to carefully review the AUP and respond to the consultation, as they are the ones which will be most impacted by the proposals.
