THE OFFICE of Rail and Road has rejected plans by open access firm Alliance Rail to operate services between London Waterloo and Southampton Central.
Alliance proposed operating nine services per day (seven off-peak and two peak services), calling at Wimbledon, Hook, Basingstoke, Winchester and Eastleigh under the name Grand Southern Railway. The company originally submitted the application in December 2016 and planned to use refurbished Class 442 EMUs in five- and 10-car formations, with the intention of starting the service in December 2017.
However, Alliance informed ORR in May 2018 there were no longer any Class 442s available for it to lease and that it would have to develop alternative rolling stock proposals. With Alliance suggesting it would be some months before it may be able to offer a fully developed solution, ORR says it has no evidence Grand Southern has a plan which would allow it to operate a service if it were allocated the rights. South Western Railway has leased 18 of the 24 Class 442s from Angel Trains for use on the Portsmouth Direct line, which are being refurbished and will next year receive new traction equipment from Kiepe Electric. Angel Trains told Modern Railways the remaining six ‘442s’ ‘are currently in storage, ready to go on lease and enter passenger service’.
While the rolling stock issue is the primary reason for ORR rejecting Alliance’s application, the regulator has also raised concerns over the performance impact of the new services and the potential revenue abstraction from South Western Railway services.
On the issue of capacity, while Network Rail agreed it was technically possible to develop a timetable incorporating the aspirations of both SWR and Alliance, NR’s initial analysis suggested the Grand Southern services would impact performance into Southampton and Waterloo, with particular concern about the erosion of ‘firebreaks’ in the timetable.
Subsequent more detailed analysis from NR suggested the services following those of Grand Southern would see an average drop of 5% in their Public Performance Measure (PPM), which would result in a drop of 0.25% for SWR’s weekday PPM for services approaching London Waterloo. ORR notes this represents a high level of impact per train.
In terms of revenue abstraction, ORR usually approves open access applications only if they exceed a ratio of 0.3:1 under its Not Primarily Abstractive (NPA) test, meaning 30% of revenue is newly-generated. Alliance’s initial work with Aecom in November 2016 suggested an NPA ratio of 0.55:1 but following a series of revisions ORR now estimates an NPA ratio in the range of 0.17 to 0.22, with a central estimate of 0.20:1, meaning the application does not generate sufficient revenue to pass the NPA test. ORR notes that different rolling stock assumptions could impact the outcome of demand forecasting used in the NPA analysis.
ORR says it is still considering an application from SWR to extend its current access rights beyond December 2019 with additional services operating from December. It confirms SWR and Network Rail have been discussing ‘a range of issues in relation to this application’ and says it is not in a position to progress SWR’s application. It was recently confirmed SWR would not be able to introduce its planned timetable enhancements in December and will instead roll over its May timetable.