Network Rail Digital Railway Program now presents an opportunitiy for the ORR to take action in order to improve competition levels in the signalling market. This will enable opportunities for the industry to diversity the supply chain, provide a better ROI and drive innovation and new technologies.
In November 2020 the Office of Rail & Road launched a study into the signalling marketing after the regulator raised concerns that Siemens & Alstom – the two main suppliers had almost 90% market share. The ORR confirmed that these 2 firms had benefited from significant incumbency advantages, with 97% of post-1990 interlockings having been installed by Siemens, Alstom or one of their predecessor companies. You can find out more by going to the Railway News Gazette
The ORR felt that new suppliers had a reduced incentive to make the necessary investments in order to be a competitive force in the market. Other potential alternative suppliers also indicated that it was difficult, if not almost impossible to establish a business case to compete for contract frameworks or indeed to develop new technologies without a long-term pipeline of work coming through which any investments could be recouped.
The ORR is therefore challenging the industry to tackle the barriers to competition hoping that this will enable the roll-out of alternative signalling technologies to be developed by a host of other signalling contracting firms.
Network Rail & the ORR will need to effectively develop appropriate resolutions in order to improve competition entry levels. The engagement between both parties will be undertaken in Phase 2 of the market study, which will investigate the overlapping of interrelated barriers on the supplier and buyer side. This may mean that the ORR may ultimately make various recommendations such as introducing new licence conditions.
‘There are no quick fixes to address these problems, but we are committed to challenging industry to seize the opportunity of the rollout of new approaches to signalling to diversify the supply chain, and ensure Network Rail is able to drive value and innovation from its suppliers’, said ORR Chief Executive John Larkinson.