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CMA raises competition concerns around new East Midlands franchise

By Josh White

Date: Friday 19 Jul 2019

CMA raises competition concerns around new East Midlands franchise

(Sharecast News) - The Competition and Markets Authority (CMA) has been investigating the award of the East Midlands rail franchise to Abellio, it announced on Friday, as part of its remit to look into the award of rail franchises as part of its mergers work.
It said its first phase probe had found competition concerns on two of the routes Abellio would operate - Norwich to Ely, and Thetford to Ely.

That was because, under current proposals for the franchise, Abellio would operate both East Midlands Trains and Greater Anglia, and so provide the only services on that line.

The regulator said it was concerned that it could reduce competition, as passengers had no other rail options, which could lead to higher fares.

It said it found no concerns on the other routes.

"Thousands of people rely on this route, so it's crucial that passengers don't suffer as a result of reduced competition," said Joel Bamford, the CMA's senior director of mergers.

"If the franchise is awarded to Abellio as currently planned, we're concerned passengers could face increased prices.

"We look forward to hearing from Abellio about how they will seek to overcome these concerns."

Abellio had offered to work with the CMA to keep fares and advance ticket availability at current levels on the two routes.

In previous similar cases, such as the award of the Northern franchise to Arriva and the South Western award to FirstGroup and MTR's, the CMA's concerns were resolved by the operator agreeing to place price caps on the affected lines.

The CMA made its decision in advance of the start of the franchise, which was due to begin on 18 August.

Abellio, owned by the Dutch state railway Nederlandse Spoorwegen, was awarded the East Midlands franchise in April, from Stagecoach-owned East Midlands Trains, which has operated the route since late 2007.

The handover in August is the third Stagecoach rail operation to come to an end in recent years, after the FTSE 250 passenger transport company lost out in its bid to keep running South West Trains in 2017, and handed back the keys to the troubled East Coast partnership last year.

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