THE OFFICE of Rail and Road has ruled that train operators using HS1 will collectively pay £25.9 million per year to the infrastructure owner during the next five-year funding period.
HS1’s Control Period 3 (CP3) starts on 1 April. The charges are higher than the current level because higher expenditure will be required as assets get older, but the amount is 32% less than HS1 Ltd requested. ORR says its analysis has shown the lower figure is sufficient to sustain the assets. The regulator also plans to increase its monitoring and reporting of HS1 to ensure the plan is ‘delivered well and at good value’.
In its draft determination, ORR recommended an annual charge of £26.1 million per year (p10, November issue). In response HS1 submitted a proposal for a higher amount, £27.8 million, but ORR has ruled that this should be reduced to £25.9 million to take account of overly conservative asset life planning and changes based on interest rate and allocation of fund assumptions.
In response to ORR’s final determination, HS1 must submit a revised 5YAMS (five-year asset management strategy) which reflects ORR’s judgement. If ORR determines this to be consistent with HS1 Ltd’s General Duty it will be approved, but if not, it may take enforcement action. HS1 Ltd may also take legal action if it disagrees with ORR’s judgement within the final determination.