Annex A of HAL response to TFL Application
| Section | Transport for London appeal under regulation 29 and complaint under regulation 30 of the Railways Infrastructure (Access and Management) Regulations |
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HAL 2nd iteration Responses to TFL Consultation – November 30th 2015
Content
TfL Comments
HAL initial response and associated
amendments
HAL Response November 2015
The Deed of
Undertaking
2.1 “HAL has been subject to the Rail Regulations
2005 since they were promulgated in November
2005. It should therefore already have in place
(among other things) a separation between
infrastructure manager and operator, a Network
Statement, and a charging framework. HAL’s
assertion that it agreed to be bound by the Rail
Regulations only by virtue of the Deed of
Undertaking is wrong: HAL cannot agree whether
or not to be bound by the law.”
2.2 “The current unsatisfactory state of affairs
arises because of HAL’s disregard for those
obligations, but also because of its breach of the
terms of the Deed of Undertaking which
envisages a two stage consultation process, such
that the draft Network Statement would be
provided to the ORR for comment, and the ORR
would “confirm” the charging framework and
specific charging rules some 11 months before
the “Implementation Date” (currently 31 August
2015, pursuant to the Deed of Amendment). This
two stage process recognises the complexity of
the issues and the need for early and proper
consultation. HAL has simply ignored the law and
A schedule was agreed with the DfT and
the ORR and has been completed.
Refer to letter;
From Simon Earls to Howard Smith 23rd
July 2015 & 31st July 2015 reference:
Heathrow Airport Limited (HAL) Moving to
a regulated railway consultation
No further response - CLOSED
No further response - CLOSED
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its undertakings and has failed to engage in the
process in a meaningful or constructive way. The
result is, not to put too fine a point on it, a mess.”
The ORR/CAA
Jurisdiction
3.1 “HAL’s proposals, in so far as it is possible to
understand them, appear to result in the CAA
exercising a regulatory jurisdiction in respect of
access charging for the Heathrow Infrastructure,
in particular since the infrastructure is intended
to remain on the Airport RAB, with the
remuneration of capital investment and recovery
of on-going operating costs to be established by
the CAA as part of the airport “periodic review”
process.”
3.2 “This is plainly ill-considered, to the extent
that it has been considered by HAL at all. The
Heathrow Spur is rail infrastructure and subject
to the Rail Regulations 2005, and must be subject
to regulation (including the charging framework
and review of charges) by the ORR, not the CAA.
HAL’s proposals require fundamental recasting to
reflect the proper regulatory position.”
ORR is the regulatory body with respect to
rail matters
No further response - CLOSED
The Investment
Recovery Charge
4.1 “A significant (in monetary terms) element of
HAL’s proposed charging framework is the “Fixed
Track Access Charge”, which is, in fact, an
Investment Recovery Charge, to which HAL claims
to be entitled as an exception to the charging
principles of the Rail Regulations 2005.”
4.2 “In order to recover its investment costs as
part of the charges to users of the infrastructure
HAL has already discussed long term costs
with the Joint Sponsor Team and the ORR.
Heathrow has no plans to change its
proposals, subject to further ORR
determination.
Heathrow has submitted a further paper
explaining its position to the ORR.
No further response – CLOSED
No further response – CLOSED
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in return for access, HAL must show that (i) the
project increases efficiency or cost-effectiveness
and (ii) that the Heathrow Infrastructure could
not have been built without the prospect of those
charges.”
4.3 “TfL remains to be persuaded that HAL can
satisfy the first of these tests (and HAL has made
no proper attempt to do so thus far). Indeed, HAL
has not even set out what it means by the terms
“cost effective” and “efficient”; the perspective
from which these should be assessed; and how
the “project” meets the criterion.”
4.4 “But more critically, TfL thinks it is extremely
unlikely that HAL will be unable to demonstrate
that the second limb is satisfied. The justification
thus far provided by HAL, such as it is, points to
the opposite conclusion. It is therefore not
surprising to find that in 2006 BAA wrote to the
DfT providing indicative costs for access to its
network and explicitly stated that it did not
envisage such costs including a charge for
recovery of historic investment, a position
adopted and repeated by HAL as recently as
October 2012. Indeed, recovery of historic
investment costs was not proposed by HAL until
early in 2015, and has all the appearance of an
afterthought, with an eye to commercial
advantage.”
HAL strongly objects to any reliance on two
‘without prejudice’ letters in 2006. Those
letters were generated in the course of
negotiations between HAL and DfT relating
to Crossrail. The purpose of marking
letters ‘without prejudice’ is so that they
cannot be deployed by either party in
opposition to the other unless the
negotiation results in an agreement, in
which case it is that agreement that can be
enforced. No evidence has been provided
to show that HAL’s present position in
relation to track access charges breaches
any agreement that had been reached.
No further comment – CLOSED
No further response - CLOSED
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