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The UK’s independent rail regulator has rejected three applications to run new commercial private sector services along Britain’s West Coast, including from Sir Richard Branson’s Virgin Group, but said it had not bowed to government pressure to turn them down.
On Thursday, the Office of Rail and Road said it had refused bids by Virgin, FirstGroup and a consortium backed by train builder Alstom to launch new trains on the West Coast main line linking London to cities including Liverpool, Birmingham and Glasgow, because of insufficient capacity.
It later added in a letter that it would continue to assess five applications to run “open-access” rail operations on the East Coast main line on its normal basis, despite government pressure to take a more restrictive approach.
Virgin had been hoping to return to the UK rail network by launching new services, including from London to Manchester and Liverpool Lime Street, while FirstGroup had planned to run a direct London to Rochdale train.
The regulator rejected the “open-access” applications on the grounds there was insufficient capacity on the southern section of the highly congested route to accommodate them.
The three applications and a series of others still under consideration became a subject of intense controversy last week when a senior Department for Transport official wrote to the ORR pressuring it to reject many of the open-access applications it was considering.
Open-access operators run as purely commercial operations but must prove there is enough capacity for their plans. They must also prove they will not take revenue from operations running under government-awarded franchises — currently a mixture of public sector and private sector companies.
The UK’s existing open-access operators — Hull Trains, Lumo and Grand Central — will continue after the current nationalisation of franchised services is completed. Other operations also have approval and are planning to start.
The DfT had argued that, if the ORR approved all the open-access applications still before it, it would cost franchised train operators an unacceptable £229mn in revenue as passengers chose open-access services over franchised ones.
The ORR statement made it clear it had ignored the DfT’s pressure in rejecting the applications. “In the case of these three applications, lack of capacity and the anticipated impact on performance alone meant we could not approve them,” its statement said. “As such, our duty to have regard to the funds available to the secretary of state was not relevant to this decision.”
The regulator also insisted in the letter published shortly after the West Coast decision that it would ignore government pressure when considering another five applications to use part of the London to Edinburgh East Coast main line.
One of those applications — to run a direct London to Cleethorpes service — is from Arriva through its Grand Central subsidiary, while the other four are for expansions of FirstGroup’s Hull Trains and Lumo services.
ORR chief executive John Larkinson wrote in the letter to DfT that it would create a “significant administrative burden” for the rail industry to undertake an extra review the department had demanded before considering those applications.
“We therefore intend to proceed with decision making on the East Coast main line in line with our published policy unless you write by Monday 7 July to ask us to delay the process,” Larkinson wrote.
Most past open-access applications on the UK’s crowded rail network have been turned down either because of capacity constraints or because they would duplicate franchised services.
Virgin called the decision a “blow for consumer choice and competition”, while FirstGroup said it was “disappointed” at the ORR’s decision and that it would continue to explore possibilities on the route involved. Alstom’s operation, the Wrexham, Shropshire & Midlands Railway Company, said it was “extremely disappointed”.