Aligning incentives to improve efficiency: Update and further consultation

On 3 May 2012, we published a further consultation on the alignment of incentives between Network Rail and train operators to improve cost efficiency.

This PR13 consultation provided an update on our position on the introduction of route-level efficiency benefit sharing (REBS) in CP5, following earlier consultation, and consulted on options for how REBS interacts with alliancing.

We also consulted on our proposals to introduce a new regulatory mechanism to expose train operators to changes in Network Rail’s costs at future periodic reviews, and an alternative proposal (in a supplementary consultation) for exposing franchised train operators to changes in the variable usage charge.

The consultation period closed on 12 July 2012 and after taking into account consultees' views, we have now set out our decisions ( 481 Kb) on the majority of these issues. As we are setting out our decisions early in the periodic review, there are some aspects of REBS (e.g. how we will set REBS baselines and then monitor performance within CP5) that we cannot yet confirm. We will consult on these issues in our draft PR13 determination (June 2013) and set out our decisions in our final determination (October 2013).

These decisions will be of particular interest to you if you are a passenger or freight train operator, Network Rail or a franchise authority.