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  "documentTitle": "Rail industry cost and revenue sharing (2011)",
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  "notes": "Focuses on the friction between train operators/Network Rail and regulators (DfT/ORR) regarding contractual flexibility.",
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      "text": "Stakeholders highlighted that the DfT currently follows a very contractual approach to managing franchises and that that severely restricts train operators’ flexibility to implement VfM improvements.",
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      "text": "ORR/ATOC/Network Rail. Rail industry cost and revenue sharing. 123",
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      "text": "There was also a perception amongst train operators that the ORR discourages bilateral deals between individual train operators and NR. However, it is recognised that the ORR has a range of legal obligations which are aimed at protecting the rights of all current and potential users of the rail network. For example, through the UK Rail Act 1993 and Article 30 of Directive 2001/14/EC (EU First Package)",
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      "text": "Many bespoke, line-of-sight deals can be implemented by train operators and NR without the need for approval by the DfT or ORR, particularly if they do not require any changes to access agreements or involve a flow of money between organisations",
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      "text": "L.E.K. understands that public sector procurement rules could limit the extent to which output specifications can be changed after contract award. There may also be concerns over leakage of state aid if train operators benefit financially from output specification changes. As highlighted later, funders would need to receive an appropriate, direct share of any savings from changes in specifications",
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      "text": "However, a recurring theme raised by stakeholders during L.E.K.'s workshops was that many of the larger VfM improvement opportunities would require some change or override to franchise agreements, track access agreements, or some other contractual or regulatory mechanism",
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      "text": "for example, stakeholders stated that it is very difficult to persuade the DfT to agree to any relaxation of the service level commitments no matter how compelling the argument (e.g. Southern was required to maintain quarter hourly Gatwick Express frequency to Gatwick Airport even when the airport was shut due to volcanic ash)",
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