Biography information for Lisa Nandy – 2014 Parliamentary Question to the Department for Transport

The below Parliamentary question was asked by Biography information for Lisa Nandy on Transport.

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Stephen Hammond

Open access operators have helped to provide innovative services for passengers and grow new rail markets – often generating excellent passenger satisfaction scores. The additional competitive pressure generated by open access operators can also help improve the experience of passengers of franchised services.

These beneficial impacts must be balanced against the potential to abstract passenger revenue from franchised operators. This abstraction primarily manifests itself as a cost to Government in the form of diminished value of the franchises when they are tendered.

To mitigate this problem, the Office of Rail Regulation ("ORR") applies the "not primarily abstractive test", which aims to ensure that applicants for open access routes will generate at least 30 pence of new revenue for every £1 of existing revenue abstracted from franchised operators. The ORR considers that if the open access operator generates any less new revenue, the benefits of their operation would not outweigh the costs. Our policy is to support the application of the not primarily abstractive test when open access applications are assessed.