Open Access Long Distance Passenger Rail Services in the United Kingdom: The Grand Central Experience

Abstract

The EU's forthcoming 4th Railway Package will allow open access passenger rail services to operate within member states alongside government supported services. The 1993 UK Railways Act, which resulted in the privatisation of the rail network in Great Britain, envisaged the development of open access passenger rail services alongside franchised rail operations. It is therefore relevant to assess how this has operated in practice. In practice, only two significant open access operators – Grand Central Railway and Hull Trains – have emerged, serving niche markets that were ignored by the franchise operators. This paper discusses the reasons for this, including barriers to entry and the application of economic regulation to assess applications to operate open access services. Particular attention is given to the experience of Grand Central in obtaining track access rights to operate services from London to Sunderland and Bradford in Northern England.The paper sets out evidence, based on work undertaken for Grand Central, on the impacts of open access on the market for rail travel, indicating that the presence of competition appears to have increased passenger demand and revenue, while constraining growth in average fares. It also compares forecast and outturn ridership and revenue. Finally the paper considers potential future developments. These include the emergence of larger scale open access proposals, possible changes to the application of economic regulation to open access services and potential impacts from the re-classification of the Infrastructure Manager – Network Rail – as a state-owned company. The implications of the UK experience for the 4th Railway Package are discussed.