ORR approves HS2 Phase 1 investment recovery charge

The Office of Rail and Road (ORR) is allowing an Investment Recovery Levy (IRC) on future users of the first phase of High Speed 2. The amount and nature of the charge is subject to future assessment by ORR.

The IRC forms part of ORR’s determination of the charging framework for HS2, which will be finalised and assessed by ORR nearer to the start of operations.

An IRC is an exceptional charge that infrastructure managers (IMs) can levy. The purpose is to let an IM recover some (or all) of the longterm costs of a specific investment project by setting higher charges.

This is an exception to the general principle that charges are based on the cost directly incurred as a result of operating a train.

A three-criteria test in the Railways (Access, Management and Licensing of Railway Undertakings) Regulations 2016 must be met for an IRC to be levied. The IM must prove that the project:

Is a specific investment project completed since 1988, or since the Regulations.

Increases efficiency or costeffectiveness.

It could not have been undertaken without the prospect of higher charges.