§ Mr. DunnTo ask the Secretary of State for Transport what progress has been made by Railtrack in producing charges for access to the railway network.
§ Mr. MacGregorFrom 1 April, Railtrack will assume responsibility for the provision of railway infrastructure and will need to charge operators for access to the network. Railtrack has produced estimates of access charges for all the train-operating units that will be formed in April and will now be discussing these with local managers. Discussions will also be held with passenger transport executives and others who sponsor passenger services. The charges announced today will establish charges for the first year of Railtrack's operation. any further changes for 1994–95 will be fine tuning only, after consultation with the train operators.
The charges will reflect the true economic costs of providing rail infrastructure. They will allow Railtrack to recover its capital costs—depreciation and a return on assets—like any other business. Thus, for the first time, charges being made for track will be set in a transparent and commercially realistic manner.
The access charges are consistent with the provision for railways expenditure already announced in the unified Budget, without any adverse effects on the level of fares, 716W services or investment. The franchising director will have sufficient grant to enable the BR train operating units which he supports to pay the new access charges. Special arrangements will apply to enable the PTEs to meet the track charges on the new basis.
Over the past 12 months, Railtrack has engaged in a detailed exercise to identify the full economic cost of running trains on the rail network. Charges take into account the costs of particular parts of the network. Railtrack's charges have been set at a level that will generate sufficient revenue to ensure that the company can cover all its costs, which include the costs of maintaining and renewing the network, plus the cost of the capital employed in the business—the rate of return. Railtrack will therefore be able to invest in and maintain the railway to meet the demands being placed on it.
Charges cover two broad elements of cost. First, are direct costs, which are the costs that operators' services impose on Railtrack. They include the cost of wear and tear, day-to-day maintenance and, where appropriate, the cost of the electricity used by electric trains. Where Railtrack is providing a section of track or other infrastructure solely for a particular operator, the full costs of renewing this element will be charged directly to that user. Secondly, there are "common costs", which are the costs that cannot be attributed to individual users—for example sections of track shared by two or more users. These costs are to be recovered from the train operating units and franchisees operating over the lines concerned according to an agreed formula which takes account of a range of factors including revenue from fares.
Charges to non-franchised operators—principally freight operators—will be subject to commercial negotiation, but must at least cover direct costs.
In common with other public sector undertakings, Railtrack's assets will be valued on a "modern equivalent asset value" basis, MEAV. The valuation will reflect the existing condition of assets and the cost of continuing to provide capacity broadly equivalent to that provided now.
The rail regulator will consider and approve all access agreements entered into after 1 April 1994.