Office of Rail Regulation publishes its policy on long-term track access contracts

17 June 2005
ORR/27/05

The Office of Rail Regulation (ORR) has today published its policy on long-term track access contracts – those which extend for more than five years – following extensive consultation with the industry.

ORR expects that freight and open access operators should be able to meet the criteria for obtaining contracts of up to ten years if that is what they want. Franchised passenger operators are likely to be able to qualify for contracts that extend for the life of their franchise agreements, with a period to ease transition, up to a maximum term of ten years. 

Chris Bolt, ORR Chairman said:

“ This policy should give operators the certainty they are looking for to allow them to plan their businesses, commit to new investment and provide longer term assurance to their customers. It also provides the flexibility to ensure that network capacity is used efficiently.”

In certain exceptional circumstances contracts (including access options) lasting longer than ten years will be allowed. ORR expects that they will generally be approved in cases where they are needed to ensure access following focused investment on enhanced or new capacity.

This should be seen as a way of reassuring investors that they will be able to use the enhanced or new capacity as intended. For all cases, applications for long-term access contracts will be considered on their merits against ORR’s approval criteria of which this policy will form part.

Notes for editors

1. A copy of the final conclusions document, Long-term track access contracts: Final conclusions, is available as a related link; and is also available form the ORR Librarian, Sue MacSwan, 1 Waterhouse Square, 138-142 Holborn, London EC1N 2Tq, tel: 020 7282 2001, fax: 020 7282 2045.
2. A review of ORR’s policy was prompted by a number of developments:
• the Government’s desire for long term access contracts to provide greater stability, expressed in its White Paper ‘The Future of Rail’;
• · Article 17(5) of EC Directive 2001/14 due to be implemented by the Government later this year, which states that:
  “…Framework agreements shall in principle be for a period of five years. The infrastructure manager may agree to a shorter or longer period in specific cases. Any period longer than five years shall be justified by the existence of commercial contracts, specialised investments or risks. Any period longer than 10 years shall be possible only in exceptional cases, in particular, where there is large-scale, long-term investment, and particularly where such investment is covered by contractual commitments….”; and
• The receipt of two track access applications both of which relate to freight operations and are seeking terms of more than twenty years. Both applications are currently under consideration.
3. The policy has been developed following an initial approach to the industry in Autumn 2004 and ORR’s consultation document of February 2005, available in related links. ORR has taken full account of all the responses received.

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