Functions and powers ORR’s economic functions

Network Rail regulation⁴

ORR holds Network Rail to account for delivering what it promised - at the amount it agreed to do it for under the 5 year periodic review set by ORR - and requires it to provide passengers with a punctual, reliable service. ORR does this by

• • holding Network Rail to account for the management of the network by enforcing licence conditions including, where necessary, imposing penalties
• • As a competition authority for rail, ORR has enforcement powers derived from Competition Act 1998, the Enterprise Act 2002 and under Articles 101 and 102 of the Treaty on the Functioning of the European Union
• • modifying Network Rail’s network licence
• • issuing approvals and consents under licence conditions/terms
• • conducting a periodic review of the charges it can impose on train operating companies for accessing the network: that is setting the contractual and financial framework within which Network Rail operates the network by establishing, the funding it required for a five-year period and the incentives needed to encourage Network Rail to efficiently deliver and outperform its expected activities

Track Access⁵

The ORR ensures passenger and freight train operating companies have fair and non-discriminate access to the rail network and that best use is made of capacity.

If a railway operator wants to access the railway network, it must agree an access contract with Network Rail which is approved by ORR. Alternatively, if the parties cannot agree access terms, the train company may ask ORR for a direction. Under Sections 17 to 22A of the RA93, ORR:

• • Approves and/ or directs new track access contracts and amendments to existing contracts
• • Determines appeals under The Railways Infrastructure (Access and Management) Regulations 2005. These Regulations open up access at previously exempt facilities under The RA93 as amended, such as those at ports and terminals and other freight depots and networks. The Regulations allow for, amongst other things, a right of appeal to ORR for any applicant that thinks it has been wrongly denied access to a facility or service or that the terms for obtaining access are unreasonable or discriminatory. Appeals can also be brought against an infrastructure manager's charging system, or charging matters associated with access to unregulated facilities or services.
• • Regulates access charges under Access and Management Regulations
• • Ensures that the Network Code provides appropriate contractual certainty for all affected parties and does not benefit one contractual party to a greater extent than another
• • Determines appeals under the Network Code Depot and Station Access⁶

In exercising its functions under sections 17 to 22A of the RA93, the ORR regulates access to station and light maintenance depots by approving station and depot access agreements:

• Approve and or direct new depot and station access contracts and amendments to existing contracts where covered by the Railways Act

• Determine appeals under The Railway Infrastructure (Access and Management) Regulations 2005

Licensing⁷

Section 6 of the Railways Act 1993 makes it an offense to act as the operator of a railway asset, other than a passenger train or freight train within the scope of the Railway (Licensing of Railway Undertakings) Regulations 2005 (the Regulations), without holding a licence or a licence exemption granted under the Act.

ORR’s statutory licensing functions include:

• • Granting licences and licence exemptions under the Railways Act and European licences and Statement of National Regulatory Provisions (SNRPs) under 2005 Regulations
• • Modifying licences
• • Enforcing licence conditions - ORR has substantial powers at its disposal to enforce railway and safety legislation. ORR’s economic enforcement powers are outlined in the RA93 under the following sections:
  • - Section 55 sets out what it may do if it chooses to use its licence enforcement powers, particularly for orders issued by ORR for securing compliance
  • - Section 56 sets out procedural requirements for section 55 orders
  • - Section 57 outlines the validity and effect of section 55 orders
  • - Section 58 sets out ORR’s power to require information for purposes of section 55 and 57(A) penalties
• • Issuing approvals and consents under licence terms/conditions

As a competition authority for rail, ORR has enforcement powers derived from the Competition Act 1998, the Enterprise Act 2002 and under Articles 101 and 102 of the Treaty on the Functioning of the European Union. Section 68 of the RA93 places a duty on ORR to investigate any alleged or apprehended contravention of a licence condition.

HS1 Regulation ORR:

• • approves all new framework agreements and revisions to existing framework agreements (track access contracts covering the reservation of capacity for more than one timetable period of six months). These are the documents which allow access to HS1 network
• • also has an appeal role in respect of the terms of track access and more generally under The Railways Infrastructure (Access and Management) Regulations 2005
• • regulates HS1 Limited through its Concession Agreement including:
• - access regulation
• - access charges reviews
• - network regulation/asset management
• - monitoring and reporting

Competition and Consumer issues8 ORR:

• • works to ensure that the rail market is competitive and fair - for passengers, freight customers, railway operators and taxpayers.
• • It has powers under both consumer and competition law with regard to the railways. The ORR has extensive powers to investigate companies believed to be involved in anti-competitive activities. Complaints are investigated under the Competition Act 1998.
• • Consumer law aims to ensure that businesses are fair and open in their dealings with consumers. ORR powers cover rail passengers and the companies they deal with. ORR is a designated enforcer under Part 8 of the Enterprise Act 2002. Its powers enable it to stop breaches of a range of consumer protection laws where there is evidence of passengers as a group being put at an unfair disadvantage. Key consumer laws include the Consumer Rights Act 2015 and the Consumer Protection from Unfair Trading Regulations 2008. The latter regulations prohibit some practices outright, such as misleading advertising and contain a general ban on “practices which contravene the requirements of professional diligence”.

Investments⁹

The ORR has a role in making sure the investment infrastructures are in place, and once agreed, projects are delivered on time and budget. The ORR therefore has:

• • powers to issue directions requiring person to provide a new facility or to improve or develop existing facility (powers never yet used);
• • mechanisms under section 16a of the RA93 which allows it to direct the improvement or construction of a railway facility; and
• • approvals criteria that set out the conditions that must be met when an approval from the ORR is necessary. The ORR also publishes how it monitors the use of the investment framework and projects promoted using it.

Closures of passenger services, passenger networks and stations

The ORR:

• • ensures that the consultation undertaken in accordance with the closures guidance, has been carried out appropriately;
• • evaluates the assessment made to ensure that the published methodology has been followed correctly; and
• • considers whether the proposed closure represents poor or low value for money in comparison with retention

Other European law

The ORR ensures fair and equal access to the rail network and services, monitoring competition in rail services (including freight) and dealing with appeals on access and charges.

The Channel Tunnel Intergovernmental Commission (IGC)

The ORR provides the IGC's secretariat and several of its members. The ORR also provides all but one of the UK members of the Channel Tunnel Safety Authority (CTSA, which is IGC's statutory independent safety advisory body) and all the UK members of IGC's joint economic committee (which advises IGC on access regulation).

The British and French governments announced in 2014 that the ORR will take new responsibilities for regulating the UK half of the Channel Tunnel later; at the same time the Autorite de Regulation des Activites

Ferroviaires (ARAF - the french rail regulator) will become responsible for the French part of the link. This arrangement takes effect in 2016.