ON FEBRUARY 3 Britain’s Rail Regulator John Swift QC began to examine whether the rolling stock leasing companies, Angel Trains, Forward Trust Rail and Porterbrook, should be subject to tighter controls. Acting at the behest of Transport Secretary and Deputy Prime Minister John Prescott, Swift invited responses by March 2 so that he can complete a report by April.
Official reason for the inquiry is ’widespread concern’ over the lack of regulation of the Roscos, but comments by Prescott to the House of Commons Transport Sub-Committee on January 21 suggested retrospective concern over the money made from reselling the businesses. Porterbrook was bought by Stagecoach, Eversholt Leasing by Forward Trust (who renamed it), and Angel by the Royal Bank of Scotland, in each case netting huge profits for the original owners. Prescott felt the Roscos must not misuse their market power ’to get rich again at the taxpayer’s expense.’
The Regulator will consult the Franchising Director, the BR Board, Roscos and Train Operating Companies. He will not look at the terms under which the companies were privatised, which is the subject of an inquiry by the National Audit Office, but at criteria for abuse of market power. Prescott defined these as excessive pricing, inadequate investment in new or refurbished rolling stock, and the ’response to the requirements of Train Operating Companies to secure improvements in performance’. Swift sees his job as ascertaining ’whether the future price, quality and availability of rolling stock is likely to meet the reasonable requirements of train operators’. This is likely to focus on what happens when current leases expire in 2003-04, the fear being that the Roscos will be able to demand high renewal prices. o