06 December 2013

As part of the consequences of ORR’s PR13 determination, there is a series of changes being proposed and made to industry documentation to pick up new terminology and shift the obligations and balance of responsibilities between Network Rail and others.

One of the matters out for consultation is an amendment to Network Rail’s licence conditions. The majority of the adjustment is aimed at updating terminology and clarifying the arrangements currently in place. As a matter of industry function however the following points are potentially of interest:

  • An amendment to provide for ORR consent in advance for dividend payments (LC4).
  • The terms on which Network Rail can operate rolling stock as part of routine arrangements with TOCs have been revised (LC5). As part of this, ORR is proposing the following general consent to NR:

ORR consents, for the purposes of condition 5 of the network licence, that Network Rail may enter into arrangements with a third party for the provision of railway vehicles and related resources and services, where Network Rail is satisfied that:

a) such vehicles, resources and services are not required for the efficient operation and management of the network for the duration of the arrangements; and

b) the arrangements are consistent with its other obligations under the network licence.

ORR may after consulting the licence holder modify or revoke this general consent if it appears to ORR requisite or expedient to do so, having regard to the duties imposed on ORR by section 4 of the Act.

  • There are some adjustments in the terms on which Network Rail can obtain permission for land disposals (including a reduction from 3 months to 2 months for permission to be withheld)
  • Changes are made to the basis upon which NR is expected to display good corporate governance. This is now referred back to the UK Corporate Governance Code with ORR’s permission required to deviate from the provisions of that code. Two non-executive directors with substantial experience of working within the industry are still required.

The consultation response date is 12 December 2013 after which changes are expected to be made to the Licence in time for the start of Control Period 5 (CP5) on 1 April 2014.

Ian Tucker is a member of Burges Salmon’s industry-leading Rail team.

Key contact

Chris Jackson

Chris Jackson Partner

  • Infrastructure
  • Procurement and State Aid
  • Transport

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