ORR Final Determination
| Date | 18 January 2011 |
| Section | Freightliner Heavy Haul Limited Regulation 29 appeal regarding rolling stock charging |
THE OFFICE OF RAIL REGULATION’S DECISION ON AN APPEAL BY
FREIGHTLINER HEAVY HAUL LIMITED UNDER REGULATION 29 OF THE
RAILWAYS INFRASTRUCTURE (ACCESS AND MANAGEMENT)
REGULATIONS 2005 REGARDING CHARGING FOR CERTAIN TYPES OF
ROLLING STOCK
DECISION: The Office of Rail Regulation decides this appeal as set out in
paragraph 105. An executive summary may be found immediately following
the Introduction, at paragraph 5.
Introduction
1. This is the decision of the Office of Rail Regulation (“ORR”) regarding
an appeal made by Freightliner Heavy Haul Limited (“FHH”) on 13
January 20101 under Regulation 29 of the Railways Infrastructure
(Access and Management) Regulations 2005 (the “Regulations”)2.
2. In this decision, words and definitions have the same meaning as
under the Regulations or under European Directive 2001/14 (the
“Directive”), as the case may be, unless the context requires otherwise.
3. FHH has appealed to ORR because:
(a) it considers that, between 2001 and 2009, Network Rail charged
it incorrectly for the use of wagon types TEAP, TEAK, FEAB,
FEAE and FRAA. Further, it contends that such incorrect
charging continues in relation to wagon types TEAP, TEAK and
FRAA;
(b) it considers that those charges do not comply with paragraph
12(9), Part 4 of the Regulations because they do not “comply
with the methodology, rules and where applicable, scales laid
down in the network statement”3;
1 Letter from FHH to ORR dated 13 January 2010, http://www.rail-
reg.gov.uk/server/show/nav.2471
2 Railways Infrastructure (Access and Management) Regulations 2005
http://www.opsi.gov.uk/si/si2005/20053049.htm
3 Ibid
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(c) it considers that the charges raised do not comply with
paragraph 1(b) of Schedule 3 of the Regulations, in particular “in
equivalent non-discriminatory charges for different railway
undertakings that perform services of an equivalent nature in a
similar part of the market”4;
(d) it considers that Network Rail has therefore also breached
condition 9 of its Licence, which prohibits discrimination; and
(e) it considers that Network Rail has not acted in accordance with
condition 8.2(a) of its Licence, which requires it to deal with
stakeholders “with due efficiency and economy and in a timely
manner”.5
4. FHH has therefore requested that ORR investigate these matters with
a view to:
(a) “directing Network Rail to amend the wagon charges which have
been incorrectly calculated”; and
(b) “directing Network Rail to adjust retrospectively the incorrect
charges billed to FHH during CP3 and CP4”.
Executive Summary
5. FHH appealed to ORR with respect to the variable usage charges of
certain categories of wagon. In each case, it advocated a change in
the input assumptions in Network Rail’s charging model that was used
to determine charges for CP4, and the equivalent charging model that
was used to determine charges for CP3.
6. First, FHH considered that the track access charges it pays for its
TEAK wagons do not reflect the fact that these use ‘track-friendly’
bogies6. Instead, Network Rail has applied to it the same access
charges as it charges a competing TEAK operator whose bogies are
less “track-friendly”. Secondly, FHH considered that the access
charges applied to its TEAP wagons are discriminatory, in that TEAPs
are charged on a different average basis than TEAK wagons. Thirdly,
FHH considered that during CP3 its waste wagons also attracted
incorrectly calculated access charges from Network Rail.
4 Ibid
5 Network Licence granted to Network Rail Infrastructure Limited
http://www.networkrail.co.uk/browse%20documents/regulatory%20documents/regulatory
%20compliance%20and%20reporting/licence%20documents/network%20licence.pdf
6 We have referred to “FHH’s TEAK wagons” throughout this decision letter. To be precise,
FHH operates the TEAK wagons, which are leased by Conoco from VTG.
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