Franchising massively increasing railway investment, says ATOC

Train operators are paying back £1.3 billion more to the government since the beginning of privitisation.

Research by ATOC suggests that the amount paid by TOCs to the government for infrastructure investment has quadrupled over the past 15 years from £400 million to £1.7 billion.

ATOC says that as well as reducing the public subsidy, the extra money is not coming at the expense of higher fares, indicating that on average the amount passengers pay for each mile they travel has only increased by 0.8 pence since 2004.

Operating margins for train companies have also remained fairly low and are currently around 3 per cent of turnover.

Franchising has been highlighted as one of the key changes that has led to the increase in demand for rail travel and subsequent boost in investment.

Michael Roberts, chief executive of ATOC, said: “The railway has been transformed in the past 20 years. Unprecedented growth in passenger journey numbers is creating a virtuous circle by generating record levels of revenue to pay for better services in turn encouraging greater rail use.

“Government commitment to significant investment in rail and competition among train companies to win and run franchises have driven improvements, as operators are incentivised to attract more passengers and contain costs.

“Rail franchising is a partnership between the public and private sectors that is delivering for passengers, taxpayers and the country.”

The full Growth and Prosperity report can be accessed here.




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