ORR’s decision upheld in East Coast case

27 July 2006
ORR/22/06

The Office of Rail Regulation (ORR) today welcomed the judgment of Mr Justice Sullivan rejecting the challenge by Great North Eastern Railway Limited (GNER) to ORR’s decision of 23 March 2006 to approve access rights for open access operators on the East Coast Main Line.

The case centred round GNER’s claims that the access charging regime contravenes regulations implementing EU rail directives by discriminating between franchise operators and open access operators, and amounts to an unlawful grant of state aid to open access operators.

Chris Bolt, ORR Chairman, said:

“We are pleased that our decision has been upheld.  It means that Grand Central can continue with its preparations to run new services between London and Sunderland, and Hull Trains can continue to run its additional service between London and Hull.”

ORR’s decision also said that it was minded to approve access rights for GNER to run additional services to Leeds if further work found that there was sufficient capacity.  ORR expects to make a decision on this shortly.

Notes for editors

1. The applications for new or increased services on the East Coast Mainline (ECML) which were the subject of ORR’s 23 March decision were from:
• GNER - under section 22A of the Railways Act 1993 (the Act) - Additional contingent rights for five weekday Leeds – King’s Cross services each way which would be used together with existing rights to operate a half-hourly off-peak service between London and Leeds;
• Grand Central - under section 17 of the Act - Firm rights for four services each way Monday to Saturday between Sunderland and King’s Cross and a further four firm rights each way between Bradford and King’s Cross, with three each way on Sundays on both routes; and
• Hull Trains - under section 22 of the Act - Firm rights for a sixth weekday path and fifth Saturday path and contingent rights for a fourth Sunday path each way between Hull and King’s Cross.
2. ORR’s 23 March decision approved:
• three firm rights each way (Monday to Sunday) for Grand Central to operate services between London King’s Cross and Sunderland calling at York, Thirsk, Northallerton, Eaglescliffe (for Teesside), and Hartlepool; and
• one additional contingent right each way (Monday to Sunday) for Hull Trains to operate services between London King’s Cross and Hull. Subject to Network Rail being able to timetable this contingent right, this will permit Hull Trains to continue to operate its current level of service.
3. In respect of GNER, ORR’s decision said that, to the extent that further work demonstrated the potential availability of capacity, it would be minded to approve contingent rights to operate up to five additional weekday Leeds to King’s Cross services each way.
4. On 22 May 2006, GNER made an application to the courts for an order to quash ORR’s decision of 23 March and a declaration that the current access charging regime was unlawful and/or state aid. GNER had also claimed that ORR failed to apply its own policy on moderation of competition and revenue abstraction but withdrew this ground during the course of the hearing which took place between 10 and 14 July 2006.
5. In rejecting the grounds of GNER’s challenge, Mr Justice Sullivan stated that he was “satisfied that the ORR’s approach is consistent with the Directive and with the Regulations purposively construed as a whole.” He went on to note that “the ORR (and previously the Rail Regulator) engages in a remarkably thorough consultation process with the railway industry in respect of all of its statutory functions, including the review of track access charges and the consideration of track access applications.”
6. An application for leave to appeal was made by GNER and refused.

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