The government asked the Office of the Rail Regulator (ORR) to investigate lack of competition for train rolling stock this June. The report, published yesterday (29 Nov) found that the industry is inefficient but a number of the problems arise from government's own policies.
The main problem is that there are only three companies providing rolling stock and the market is very uncompetitive. This has led to higher prices for passangers and lower quality of service. One factor keeping the market as it is, is the DfT policies. Very often the award of a rail franchise is so specific, that the choice of stock is very limited.
The government is now threatening to refer the industry to the Competition Commission, which inquiry could last up to two years. In that case, it is not likely that there would be any further changes. Roscos will not make any further investments while being unsure of the results of the Commission. The government should not impose such draconian measures on companies but has to first consider the effect of its own policies.