The Railways (Access, Management and Licensing of Railway Undertakings) Regulations 2016

Exceptions to the charging principles E+W+S

2.—(1) In order to obtain full recovery of the costs incurred the infrastructure manager, with the approval of the Office of Rail and Road or, in relation to a rail link facility, the Secretary of State, may levy mark-ups on the basis of efficient, transparent and non-discriminatory principles, whilst guaranteeing optimum competitiveness, in particular in respect of rail market segments.

(2) For the purposes of this paragraph—

(a) approval given by the Secretary of State in relation to a rail link facility must be given through the development agreement; and

(b) approval given by the Office of Rail and Road must—

(i) in relation to railway infrastructure subject to the access charges review, be given as part of that review; and

(ii) in relation to any other railway infrastructure, be given in such form or manner as the Office may require.

(3) The effect of sub-paragraphs (1) and (2) must not be to exclude the use of infrastructure by market segments which can pay at least the cost that is directly incurred as a result of operating the railway service, plus a rate of return which the market can bear.

(4) The charging system must respect the productivity increases achieved by applicants.

(5) Before approving the levy of a mark-up under sub-paragraph (1) the Office of Rail and Road or, as the case may be, the Secretary of State, must ensure that the infrastructure manager evaluates the relevance of a mark-up for the specific market segments, considering at least the pairs listed in sub-paragraph (10) and retaining the relevant ones.

(6) The list of market segments to be considered by the infrastructure manager under sub-paragraph (5) must contain at least the three following segments: freight services, passenger services within the framework of a public service contract and other passenger services.

(7) In addition to the market segments considered under sub-paragraph (5), the infrastructure manager may consider further market segments according to commodity or passengers transported.

(8) Market segments in which railway undertakings are not currently operating but in which they may provide services during the period of validity of the charging system must also be defined; the infrastructure manager must not include a mark-up in the charging system for those market segments.

(9) The list of market segments must be published in the network statement and reviewed at least every five years; the Office of Rail and Road must control that list in accordance with paragraph (2) of regulation 31.

(10) The pairs referred to in sub-paragraph (5) are—

(a) passenger versus freight services;

(b) trains carrying dangerous goods versus other freight trains;

(c) domestic versus international services;

(d) combined transport versus direct trains;

(e) urban or regional versus interurban passenger services;

(f) block trains versus single wagon load trains; and

(g) regular versus occasional train services.