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Rolling stock leasing market investigation
The CC has concluded that competition in the market for the leasing of rolling stock for franchised passenger services is restricted by the limited number of alternative fleets available to train operating companies (TOCs) when bidding for rail passenger franchises. The CC has identified several factors which in combination have restricted the choice of rolling stock available for lease at the point franchises are being let, including: technical and operational factors which limit interoperability; costs and risks in switching rolling stock or introducing new rolling stock; and aspects of the way in which the franchising system currently operates. TOCs have in many cases little incentive or ability to negotiate with rolling stock lessors (ROSCOs) and ROSCOs in turn have little incentive to compete with each other. In order to address the competition problems that it has found, the CC is making a number of recommendations, including: a) that franchising authorities make changes to the franchise system, wherever consistent with their other functions and objectives, to introduce longer franchise terms (in the region of 12 to 15 years or longer), which would allow TOCs to realize the benefits and recover the costs of switching to alternative new or used rolling stock over a longer period and increase the incentives and ability for TOCs to exercise choice; assess the benefits of alternative new or used rolling stock proposals beyond the franchise term and across other franchises when evaluating franchise bids which will encourage a wider choice of rolling stock to be considered in franchise proposals, irrespective of franchise length; and ensure that franchise invitations to tender (ITTs) are specified in such a way that franchise bidders are allowed a choice of rolling stock; b) requiring the ROSCOs to remove non-discrimination requirements from the Codes of Practice,1 which would provide greater incentives for the TOCs to seek improved terms from the ROSCOs; and c) requiring rolling stock lessors to provide TOCs with a set list of information when making a lease rental offer for used rolling stock, which would give TOCs the ability to negotiate more effectively.
- "Rolling stock leasing provisional findings"@en
- "Rolling stock leasing provisional findings"
- "The CC has concluded that competition in the market for the leasing of rolling stock for franchised passenger services is restricted by the limited number of alternative fleets available to train operating companies (TOCs) when bidding for rail passenger franchises. The CC has identified several factors which in combination have restricted the choice of rolling stock available for lease at the point franchises are being let, including: technical and operational factors which limit interoperability; costs and risks in switching rolling stock or introducing new rolling stock; and aspects of the way in which the franchising system currently operates. TOCs have in many cases little incentive or ability to negotiate with rolling stock lessors (ROSCOs) and ROSCOs in turn have little incentive to compete with each other. In order to address the competition problems that it has found, the CC is making a number of recommendations, including: a) that franchising authorities make changes to the franchise system, wherever consistent with their other functions and objectives, to introduce longer franchise terms (in the region of 12 to 15 years or longer), which would allow TOCs to realize the benefits and recover the costs of switching to alternative new or used rolling stock over a longer period and increase the incentives and ability for TOCs to exercise choice; assess the benefits of alternative new or used rolling stock proposals beyond the franchise term and across other franchises when evaluating franchise bids which will encourage a wider choice of rolling stock to be considered in franchise proposals, irrespective of franchise length; and ensure that franchise invitations to tender (ITTs) are specified in such a way that franchise bidders are allowed a choice of rolling stock; b) requiring the ROSCOs to remove non-discrimination requirements from the Codes of Practice,1 which would provide greater incentives for the TOCs to seek improved terms from the ROSCOs; and c) requiring rolling stock lessors to provide TOCs with a set list of information when making a lease rental offer for used rolling stock, which would give TOCs the ability to negotiate more effectively."@en
- "Rolling stock leasing market investigation"
- "Rolling stock leasing market investigation"@en
- "Rolling stock leasing market investigation provisional findings report"@en
- "Rolling stock leasing market investigation : provisional findings report"