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  "documentTitle": "Rail industry cost and revenue sharing (2011)",
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  "notes": "The slide uses a two-row table-like structure to contrast two specific cost categories (Freight access charges and EC4T) and the resulting operator engagement.",
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      "text": "Examples of where train operators have been actively involved with NR costs and charges",
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      "text": "In 2009/10 freight train operators paid c.£50m p.a. of access charges to NR, which is equivalent to 6% of their revenue. FOCs are not protected from changes in these access charges via Clause 18.1 or similar provisions because they are open access operators (and therefore do not have franchise agreements). FOCs exposure to NR access charges was sufficient for them to play an active role in PR08 in order to help drive down these charges. FOCs provided a range of evidence to the ORR, including benchmarking of GB infrastructure costs with those of the US Class I railroads. They hired external consultants to assist with preparing this evidence",
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      "text": "Electricity for traction (EC4T) is procured by NR and the cost is passed on to train operators based on usage. As a result, NR is responsible for buying electricity but is largely indifferent to the cost of it. Franchised TOCs pay a total of c.£250m p.a. for EC4T. This is equivalent to c.4% of total TOC revenue. However, the percentage varies significantly by TOC because the mix between diesel and electric traction varies – indeed some TOCs only operate diesel rolling stock. Industrial electricity prices increased by over 20% in real terms from 2006 to 2009 and this caused EC4T charges to increase by £40m. This resulted in several TOCs experiencing an increase in their overall cost base of around 2% of total costs. This caused TOCs to actively engage with NR to help manage these costs. In particular, they persuaded NR to use hedging to reduce the level of uncertainty over these costs",
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      "text": "cost share percentage: 6%",
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      "kind": "source-note",
      "text": "Source: Rail VfM team ORR/ATOC/Network Rail. Rail industry cost and revenue sharing.",
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      "text": "5 – Percentages: There are precedents of train operators taking an interest in NR’s costs. These can be used to inform the setting of sharing percentages",
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