ORR simplifies train operator’s licences

18 January 2006
ORR/01/06

The Office of Rail Regulation (ORR) has today published conclusions setting out various simplifications to licences granted to operators of trains, stations, networks and light maintenance depots. These follow ORR’s review of all standard licence conditions, outlined in a consultation launched in August 2005, and reflect ORR’s commitment to best practice in regulation.

Other changes arise from the Railways Act 2005, in particular the transfer in July 2005 of consumer protection licence conditions formerly the responsibility of the Strategic Rail Authority, and from the implementation in November 2005 of the European Directive on rail licensing.

The document confirms the approach ORR is taking to the new requirements of the Licensing Directive, including a new standard of financial fitness that most freight and passenger train operators must meet on an ongoing basis. The aim is to ensure that the requirements are met in a proportionate way that does not impose unnecessary burdens on rail companies.

New, streamlined model licences will be introduced today for use in licences issued to new operators. Five outdated conditions have been deleted, four conditions have been merged into two to improve transparency, and one has been shortened from fifteen pages to four paragraphs. We will write to current licence holders shortly to ask their consent to bring their licences in line with these new, simpler models. 

These conclusions will be of interest to all existing licensed rail operators, potential licence applicants and the holders of licence exemptions with a condition requiring them to hold insurance. 

Notes for editors

1. Section 6 of the Railways Act 1993 (as amended) requires the operators of passenger and non-passenger trains, stations, light maintenance depots and network to hold an appropriate licence or licence exemption. ORR publishes model licences on its website and these form the basis of those normally granted to new applicants.
2. There are currently around 60 licensed operators holding about 160 different licences between them. Most operators (apart from Network Rail Infrastructure Limited) hold licences in standard form and the review focused on these.
3. The Department for Transport implemented the First Package of European Rail Directives on 28 November 2005, including one Directive focused on licensing matters (Directive 2001/13 amending Directive 1995/18 on the licensing of railway undertakings). The implementing Regulations provide for licences to be granted by ORR, valid throughout Europe, to most passenger and freight train operators. To remain valid four criteria – professional competence, third party liability insurance, good repute and financial standing – must be met on an ongoing basis. Matters included in licence conditions under the Railways Act have been incorporated in a Statement of National Regulatory Provisions (SNRP) for affected operators. DfT designated these operators’ licences partly as new European licences and partly as an SNRP, thus avoiding the need for existing operators to apply for new licences.
4. Licensing Review: Conclusions is published today and is available here. 

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