No quick fix on rail signalling competition, ORR says


The rail regulator has said it will take action to improve competition in Great Britain's railway signalling market.

The Office of Rail and Road (ORR) said the move follows the first stage of its study into this market as new technologies are rolled out through Network Rail's delivery of the Digital Railway programme.

Siemens rail signals

In an update paper, the regulator has raised concerns that the two main signalling suppliers, Siemens and Alstom, enjoy significant power in the market, and alternative companies struggle to compete with them on a level playing field.

It added that the firms have incumbency advantages, stemming back to rail privatisation, adding: ‘Their control of technology which is predominant across the network makes it difficult for new suppliers to bring in innovative products or approaches.’

Chief executive John Larkinson said: ‘Our study has found that there are competition issues in the critical signalling market. There are no quick fixes to address these problems, but we are committed to challenging industry to seize the opportunity of the roll-out of new approaches to signalling to diversify the supply chain, and, ensure Network Rail is able to drive value and innovation from its suppliers.’

The ORR said the way the market works also reduces incentives for new suppliers to make the investment necessary to be competitive in Great Britain, and it is concerned that these entrenched advantages and competition problems will be carried through to the roll-out of alternative signalling technologies.

It added that it believes the roll-out of the digital railway presents a unique opportunity to diversify the supply chain and increase competition and that increasing the number of players in the market will help Network Rail drive better value and innovation.

In 2019, the EU blocked Siemens' proposed acquisition of Alstom under the EU Merger Regulation. It said the takeover would have brought together the two largest suppliers of various types of railway and metro signalling systems, as well as of rolling stock in Europe.

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