Rail Regulator concludes that the London Underground Group did not infringe the Competition Act 1998 in relation to the procurement of safety critical personnel

23 June 2004
ORR/24/04

The Rail Regulator, Tom Winsor, has concluded that the London Underground Group’s approved supplier policy for the procurement of safety critical staff has not infringed the Chapter II prohibition on abuse of a dominant position, imposed by the Competition Act 1998.
 
The Regulator’s investigation was initiated following separate complaints made by Suretrack Ltd and P.Way Services Ltd (agency suppliers of safety critical personnel to contractors working on the London Underground) in July 2002.  Both complainants alleged that the London Underground Group’s new approved supplier policy involved an abuse of a dominant position in breach of the Chapter II Prohibition of the Competition Act 1998. 

The Regulator’s subsequent investigation found that the London Underground Group’s approved supplier policy was justifiable on safety grounds and that is was unlikely to have an adverse effect on competition or consumers, in particular as regards the provision of underground passenger services.   Further, since commencement of the investigation, the companies involved have introduced new procurement policies, which the Office of the Rail Regulator (ORR) is satisfied are unlikely to give rise to the concerns that prompted the original investigation.

A non-confidential version of the non-infringement decision will be published on the ORR website shortly.

Notes to editors:

  1. The Regulator is an independent statutory office holder appointed by Government under the Railways Act 1993 (“the Railways Act”), to regulate the railways following privatisation. The Regulator exercises powers under the Competition Act 1998 (the Act) concurrently with the OFT in respect of agreements or conduct which relate to the supply of services relating to railways (see section 67(3) of the Railways Act).
  2. The Act contains two prohibitions:
    • the Chapter I prohibition prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have the object or effect of preventing, restricting or distorting competition in the UK (or any part of it) and which may affect trade within the UK (or any part of it); and
    • the Chapter II prohibition prohibits conduct by one or more undertakings which amounts to the abuse of a dominant position in a market which may affect trade within the UK (or any part of it).
  3. The London Underground Group up until the advent of the Public Private Partnership (PPP) initiative in 2003 consisted of London Underground Limited and its subsidiary infrastructure maintenance companies.
  4. Safety critical staff are required when maintenance or engineering work is carried out on or near the track, for example, to ensure that the track is not live, and safe working practices are followed.

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