Office of Rail Regulation

The arrangements which enable the ORR to review track access charges are set out in Schedule 7 of the track access agreements between franchised passenger operators and Network Rail.  As part of the implementation of the 2000 and 2003 access charges reviews, the Regulator altered the provisions in Schedule 7 to enable several specific interim reviews to be carried out prior to the next planned access charges review. 

The access charges  review 2000 allowed for specific interim reviews in  specific areas. These concerned possessions, stations incremental output statements (stations IOS), on-train metering of electricity for traction, electricity supply, track and signalling incremental output statements (IOS) and  incentivising appropriate maintenance of wheel and rail.

In concluding the October 2000 access charges periodic review, the Regulator gave notice of the need to introduce better planning for the possessions regime - where Network Rail closes parts of the network for periods to enable it to do engineering work - to reduce delays for passengers. Following work on the best way to calculate the payments for possessions, the Regulator published his final conclusions on the possessions interim review on 20 March 2002.

The only other specific interim review  undertaken was  the stations incremental output statement (IOS) review, which was also proposed in the Regulator's October 2000 periodic review final conclusions. 

The stations IOS review established the cost of delivering new facilities at stations across the network including passenger personal security and information systems, waiting facilities and toilets. The SRA specified the scope of the programme.  The Regulator published his final conclusions on the stations IOS programme in August 2003.

The access charges review 2003 has also allowed for interim review to be undertaken in specific areas.  The Regulator intends to initiate these in 2004/05, namely:

a) a review of the structure of access charges;
b) a review of Network Rail’s signaling strategy and efficient costs; and
c) a review of the complications of Network Rail’s proposal to materially alter its possessions strategy.

The reason for structure of charges review is that the charging framework was not covered by the access charges review 2003.

The reason for the signalling and possessions strategy is that at the time of the 2003 access charges review there was significant uncertainty about the levels of cost, in relation to these two areas, that Network Rail will incur.  The Regulator therefore considered it would be inappropriate to determine his expenditure allowance in these areas for the whole five-year period. 

The provisions determine that these specific interim reviews can occur at any time in the next two years.  The outcome of each of these reviews may lead to an adjustment in the allowed expenditure or a change in the outputs which the expenditure is designed to deliver.  It may be decided, however, that the level of expenditure remain unchanged.