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  "documentTitle": "Rail industry cost and revenue sharing (2011)",
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  "authorName": "L.E.K.",
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      "text": "If a Symmetrical Regional EBS mechanism were to be implemented then a phased approach aligned with horizontal separation of NR would be best.",
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      "kind": "disclaimer",
      "text": "ORR/ATOC/Network Rail. Rail industry cost and revenue sharing.",
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      "text": "In L.E.K.'s opinion, many of the concerns raised by train operators regarding a prescriptive cost sharing mechanism are valid. These concerns include the limited ability of TOCs to influence NR's costs under NR's current, highly centralised management approach. As such, L.E.K. has concerns that a Symmetrical Regional EBS mechanism would not deliver VfM in the short term",
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      "text": "Horizontal separation of NR would improve the attractiveness of a Symmetrical Regional EBS mechanism, so if it were to be implemented then it should follow a phased approach which is aligned with horizontal separation of NR:",
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      "text": "Full sharing percentage of 25% applies from the start of CP6 when both horizontal separation and the EBS mechanism have had a chance to bed down",
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      "text": "Include in new franchises from the point that government announces horizontal separation. This would improve the likelihood of achieving VfM through the franchise letting process as train operators would have greater confidence that their current concerns would be addressed",
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      "text": "Could become active from the start of CP5 but with a low starting sharing percentage (e.g. 12.5%). This would enable all parties to get used to the mechanism in a relatively low risk environment (half way between a “wooden dollars” introduction and a big-bang introduction). It also reflects the fact that there could be quite a high level of uncertainty over the CP5 regional efficient expenditure determinations",
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      "text": "If an EBS mechanism were implemented then it could create a perverse incentive whereby TOCs would try to persuade ORR to set soft targets for the Regional IMs during periodic reviews. To overcome this, any EBS mechanism should be combined with a mechanism that gives TOCs a partial exposure to ORR's periodic review determinations (i.e. Option 5 or 6)",
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      "text": "L.E.K. has concerns that a Symmetrical Regional EBS would not deliver VfM in the short term due to a number of factors such as TOCs' limited ability to influence NR's costs. If a Symmetrical Regional EBS mechanism were to be implemented then a phased approach aligned with horizontal separation of NR would be best",
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      "kind": "title",
      "text": "Option 1: Symmetrical Regional EBS",
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