Rail Regulator publishes his last annual report for 2003-04

20 May 2004
ORR/13/04

Tom Winsor, the Rail Regulator, today published his fifth and last annual report – for the reporting year 2003-04 - providing an overview of the ORR’s achievements of the past year and a review of the major developments in the industry and its regulation in the last five.  Also published today is the ORR business plan for 2004-07 which identifies key priorities for 2004-05 and a projected work plan for the two years beyond (2005-06 and 2006-07).

During the year, a radically new type of track access contract – governing the crucial interface between track and train – was established for passenger and freight train operations.  It provides much needed clarity and certainty in the relationship between Network Rail and its passenger and freight train operating customers.  The parties to track access contracts now have a stronger, simpler and streamlined set of rules governing their parts in what is a railway joint venture, with aligned incentives and a clear specification of what each has to contribute to the enterprise and a proper and efficient system for remedial action when things go wrong.

The year 2003-04 also saw welcome improvements in Network Rail’s stewardship of the rail network, with the lowest number of broken rails since detailed records began and substantial improvements in track quality.
The main focus of the reporting year was the outcome of the 2002-03 access charges review.  After 15 months of intensive work, the Regulator’s final conclusions were announced on 12 December 2003, and the new charging regime came into force on 1 April 2004.  The review was made necessary by the aftermath of the Hatfield derailment on 17 October 2000 and the decision of the Government to apply for Railtrack to be put into administration on 7 October 2001.  The review’s conclusion - £24.4 billion for Network Rail - has been a watershed for the railway industry, establishing as it has the size, quality and efficient cost of the national network for the five years 1 April 2004 to 31 March 2009.  The review has set tough but fair targets and has reinforced and strengthened Network Rail’s incentives to deliver on its obligations.

As set out in the business plan, ORR will build on the foundations laid by the access charges review 2003, through a number of more specific and narrowly focused access charges reviews over the coming year.  These will complement the planned reform of the network code in encouraging and incentivising whole-industry solutions and in facilitating an optimum approach to network stewardship, performance and capacity allocation.

ORR will also improve the regulatory monitoring regime governing Network Rail’s delivery of its business plan and its cost management activities through progressing work streams relating to Network Rail’s continuing development of a comprehensive asset register, and a balanced scorecard, to form a fuller picture of the company’s delivery against its stewardship obligations.

Commenting on the annual report, Tom Winsor said:   “My five-year term of office ends on  4 July 2004.  After that, the statutory position of Rail Regulator is abolished, replaced by a board to be called the Office of Rail Regulation under the chairmanship of Chris Bolt.  The independence and jurisdiction of the ORR will not change as a result of this new structure, but the dynamics of the organisation’s decision-making undoubtedly will; indeed, that is why Parliament has established it.  Immediately upon the announcement of the members of the statutory board, I invited each to join my non-statutory advisory board, to facilitate a smooth and efficient handover.

“As this is my last annual report, it is also appropriate that I offer some observations on the last five years, and a view on what lies ahead.  For the railway industry and its users, they have been turbulent years - unnecessarily so.  What the industry now needs is stability, predictability, clarity of responsibility and accountability, sound incentives and an environment which is friendly to investment.  It is bruised and battered, reorganised and restructured, pressed and criticised.  But the professionalism and dedication of the people who work in the railway industry has not been suppressed. They have hung on and intensified their efforts to provide a service of which they and we can be proud, and they deserve our support and our thanks for their work.”

Notes for editors:

  1. The ORR annual report for 2003-04 is also available from the ORR Librarian, Sue MacSwan, 1 Waterhouse Square, 138-142 Holborn, London EC1N 2TQ, tel: 020 7282 2001, fax: 020 7282 2045, e-mail: rail.library@orr.gsi.gov.uk.
  2. The ORR business plan for 2004-07 is also available from the library. 

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