Further representations from Hitachi Rail Limited (redacted) – 8 January 2021
| Date | 08 January 2021 |
| Section | Depot access applications and decisions |
1
8 January 2021
James Osborn
Executive, Access and Licensing
Office of Rail and Road
25 Cabot Square
London
EC14 4QZ
CONFIDENTIAL & COMMERCIALLY SENSITIVE
Dear James
Ref: APPLICATION BY HITACHI RAIL LIMITED UNDER SECTION 17 OF THE RAILWAYS ACT 1993
We refer to your letter of 17 December 2020. We are pleased to enclose our proposal for the charges
that should reasonably apply in respect of the services set out in the draft Depot Access Agreement.
As requested, we have enclosed a spreadsheet detailing the proposed c harges, the methodology
underpinning the calculation of those proposed charges to gether with our rationale and assumptions
(including with respect to direct hourly ra te, time assumed for each ‘job’ and materials as requested
in your letter).
Our calculations, assumptions and rationale are supported by our extensive experience and
knowledge of our own charges and cost base as a Depot Facility Owner across multiple depots in the
UK and direct knowledge as a B eneficiary of the charges levied by other third party Depot Facility
Owners at other locations in the north of England (at Edge Hill and Heaton) for the s ame services as
those we wish to procure Abellio East Midlands to undertake at Neville Hill depot.
With regard to your request for us to clarify the ‘maintenance specificatio n’ applicable to each ‘job’,
we consider that this is common ground between the parties and not the subject of disagreement.
The maintenance specification relevant to each ‘job’ has been provided to Ab ellio East Midlands and
is detailed in each schedule of the draft Depot Access Agreement previously provided to the ORR.
Whilst not directly relevant to our section 17 application, it is also worth highlighting that the
maintenance specification for each ‘job’ in the draft Depot Access Agreement is also the same
maintenance specification for each ‘job’ incorporated into the cu rrent interim depot access
agreement between Abellio East Midlands and Hitachi Rail (due to expire in February 2021) and
accordingly, the scope of work for each ‘job’ is und erstood by both parties and undertaken by Abellio
East Midlands on a daily basis at Neville Hill depot for over 18 months (see your ref: DAA
D/18/371/324/01/19/01 by way of confirmation).
Based on our experience as a Depot Facility Owner and as a Beneficiary we would observe that access
and maintenance charging is rarely contentious and tha t the charges, allowing for certain flexibility to
reflect depot usage, operate within a relatively narrow band. The charges proposed by Abellio East
Midlands exponentially exceed the normal and reasonable market rate and to date AEM have not
(despite repeated requests) justified or explained this exponential increase over the market norm or
demonstrated how their charges reflect the cost of providing the services plus a reasonable pro fit.
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