Rail Freight Group (RFG) is pleased to respond to Network Rail’s consultation on the methodology for allocating fixed costs to train operators in CP6.
RFG recognises that Network Rail wish to model the allocation of fixed costs between operators as part of a move to route devolution. Network Rail wishes develop more detailed algorithms for doing so, moving beyond the simplistic approach used to date to set fixed costs for franchised operators. We also recognise that the move is important in setting income for the devolved routes including FNPO. We do not object to the principle of doing so.
The work undertaken by Brockley consulting is detailed and complex. As such we are not in a position to comment on the details of the approach, or the algorithms used. It is clear that the work has been professionally undertaken. However, we have some concerns with the resulting analysis, and with its interpretation by stakeholders.
Click the link below to download the response in full.
NR fixed cost allocation Nov 2017 (1)