CMA warns train passengers face higher prices if Abellio takes on East Midlands franchise
The UK’s competition watchdog raised concerns today about higher ticket fares on two routes it is probing as part of an investigation into Abellio’s acquisition of the East Midlands franchise.
Abellio’s ownership of Greater Anglia means it would operate a monopoly on the Norwich to Ely and Thetford to Ely routes as it would then also operate East Midlands Trains, the Competition and Markets Authority (CMA) warned.
Read more: Arriva to sue Chris Grayling’s Department for Transport for £200m
The Department for Transport (DfT) awarded the £755m contract to run the East Midlands franchise the Dutch operator in April.
As exclusively revealed by City PM today, rival operator Arriva is now seeking £200m compensation from the government.
It claims the DfT’s decision to disqualify its bid – alongside Stagecoach’s – over a refusal to accept liability for open-ended pensions risks – left Abellio as the only eligible firm to award the franchise to.
Today, however, the CMA warmned that passengers could face higher fares on the two aforementioned routes.
“Thousands of people rely on this route, so it’s crucial that passengers don’t suffer as a result of reduced competition,” Joel Bamford, the CMA’s senmior director of mergers, said.
“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 has pledged to keep fares and advance ticket availability at current levels on the two routes.
Read more: Stagecoach hikes profits despite loss of UK rail franchises
Similar concerns raised in the past over Arriva’s Northern franchise and First Group’s acquisition of South Western were resolved with price caps.
The CMA will make a decision before the franchise begins on 18 August.