Britain’s Roscos have been told by the Competition Commission
(CC) to provide more information when negotiating lease
rentals.
They must now give “a set list of information” to train
operating companies in order to give them more “ability to
negotiate more effectively”, according to a 199-page report by the
CC published today into the market for leasing rolling stock for
franchised passenger services.
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The report, which said that operators have “little incentive or
ability to negotiate” with Roscos, also concluded that technical
and operating factors, as well as costs associated with switching
rolling stock have meant that there has been a restriction in the
“choice of rolling stock available”.
The CC now also requires Roscos to offer different terms in
their lease contracts. To date, these have not been available
because of “non-discrimination terms” in their code of practice
which have meant, in effect, all Roscos have offered the same deal
package to customers. As a result, operators “have little incentive
to seek better terms as its rivals will also receive the same
benefit”.
Diana Guy, who chaired the CC’s inquiry, said: “There is
frequently little competition when existing stock comes up for
re-leasing.”
This, she added, “stems from the lack of alternatives to the
incumbent fleets when operators are putting together their
franchise bids”.
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By GlobalDataThe CC also recommended that franchises should be lengthened to
up to 15 years “or longer” so operators can benefit from switching
to rolling stock “over a longer period”, and also that a choice of
rolling stock are provided in invitations to tender.
The report called for franchising authorities to make
assessments as to whether Roscos can offer stock “beyond the
franchise term and across other franchises” when evaluating
franchise bids.
