Rail firms agree Ex­eter-lon­don fare cap amid com­pe­ti­tion fears

The Daily Telegraph - - Business - By Bradley Ger­rard

RAIL fares for pas­sen­gers trav­el­ling be­tween Lon­don and Ex­eter will be capped in line with other sim­i­lar ser­vices after an in­ves­ti­ga­tion by the UK’S com­pe­ti­tion watch­dog.

The Com­pe­ti­tion and Mar­kets Author­ity (CMA) had raised con­cerns when First Group won the con­tract to run trains be­tween Lon­don Water­loo and Ex­eter be­cause it also op­er­ated the only other ser­vice from the Devon city to the cap­i­tal’s Padding­ton sta­tion, un­der the Great Western Rail­way brand.

The Water­loo line, run un­der the South West Trains moniker, had been op­er­ated by Stage­coach for two decades but the com­pany lost the fran­chise to its UK ri­val, which put in a joint bid with Hong Kong’s MTR. The CMA sub­se­quently raised the prospect that with First Group in con­trol of both ser­vices, ei­ther prices would rise or ser­vice stan­dards would fall.

But First Group and MTR of­fered to cap prices on un­reg­u­lated fares be­tween the two ci­ties based on a num­ber of other com­pa­ra­ble ser­vices, to en­sure they were kept in line with the mar­ket. The CMA said yes­ter­day it had ac­cepted this pro­posal.

Train oper­at­ing com­pa­nies have con­trol over set­ting un­reg­u­lated fares, which in­clude ad­vance pur­chase tick­ets, but reg­u­lated fare rises are capped by the Govern­ment.

Data this week showed that RPI in July was 3.6pc, which will be the max­i­mum amount by which reg­u­lated fares – such as com­muter sea­son can rise in Jan­uary.

The train com­pa­nies will sub­mit reg­u­lar re­ports to the CMA to en­able it to make sure the agree­ment is be­ing main­tained. Rachel Mere­lie, ex­ec­u­tive di­rec­tor of mar­kets and merg­ers, said: “We ex­am­ined the pro­pos­als very thor­oughly dur­ing the con­sul­ta­tion pe­riod to en­sure that they ad­dressed all of our con­cerns. We be­lieve that they will pro­tect pas­sen­gers from fares be­ing pushed up due to lack of com­pe­ti­tion on this key route be­tween Lon­don and Ex­eter.”

Ben Brad­shaw, the Ex­eter MP, said last month he shared the CMA’S con­cerns about the po­ten­tial for higher ticket prices, adding pas­sen­gers would want to see a price cap im­posed. tick­ets –

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.