2nd Feb 2006 07:00
Competition Commission02 February 2006 News Release 03/06 2 February 2006 PROVISIONAL CLEARANCE OF FIRSTGROUP'S ACQUISITION OF GWF RAIL FRANCHISE The Competition Commission (CC) has provisionally cleared the acquisition byFirstGroup plc (FirstGroup) of the Greater Western passenger rail franchise(GWF). In a summary of its provisional findings published today at http://www.competition-commission.org.uk/inquiries/ref2005/western/index.htm, the CChas concluded that FirstGroup's franchise bid may not be expected to result in asubstantial lessening of competition in the supply of passenger transportservices in the GWF area. FirstGroup operates bus services in many parts of theUK and the inquiry is considering the effect on competition of FirstGroupoperating overlapping bus and rail services in the GWF area. Diana Guy, Chairman of the inquiry group, said: 'Our detailed analysis of the GWF area showed only a very limited number ofroutes where there was actually scope for any competition between buses andtrains. In most of the areas we have looked at, bus and train services havedifferent characteristics and the passengers using them have differentrequirements. 'Even in those areas where there was some potential for competition, we foundthe profit incentive was very small for an operator of both bus and trainservices to take advantage of its position to shift passengers from bus to railby raising fares or altering services.' On 13 December 2005, the Department for Transport announced that the GWF hadbeen awarded to FirstGroup. FirstGroup currently operates the Great Western,Great Western Link, Trans Pennine Express and Scotrail franchises, and anon-franchise open access rail service (Hull Trains). From 1 April 2006 it willalso operate the Thameslink/Great Northern franchise as well as the new GWF,which comprises the current Great Western, Great Western Link and Wessex Trainsfranchises. The full provisional findings report will be published by 9 February 2006. FirstGroup and other interested parties have 21 days in which to respond inwriting. Anyone wishing to submit views is requested to write, by 22 February2006, to: Anne Jolly Inquiry Secretary (GWF inquiry) Competition Commission Victoria House Southampton Row London WC1B 4AD or email: [email protected]. Notes for editors 1. The inquiry group concentrated principally on the effect of theacquisition on overlapping rail and bus services in South Wales, Cornwall andthe Bristol area, including on routes between Bristol and Bath and Bristol andWeston-super-Mare; and between: Truro and Penzance; Plymouth and Paignton;Bridgwater and Taunton; and Great Malvern and Worcester. 2. The acquisition of a rail franchise is treated as a merger under theRailways Act 1993. 3. The proposed acquisition by FirstGroup of the GWF was referred to the CCon 30 September 2005. The CC was originally asked to look at proposed bids forthe franchise by FirstGroup, Stagecoach and National Express. Following theaward of the franchise to FirstGroup on 13 December, the inquiries into theStagecoach and National Express bids were subsequently cancelled. The CC isrequired to publish its final report by 16 March 2006. 4. The Enterprise Act 2002 empowers the Office of Fair Trading to refer tothe CC completed or proposed mergers, either where the merger creates orenhances a 25 per cent share of supply in the UK (or a substantial part thereof)or where the UK turnover associated with the enterprise being acquired is over£70 million. 5. The GWF inquiry group consists of five members: Diana Guy (GroupChairman), Barbara Donoghue, Professor Mahendra Raj, Anthony Stern and RichardTaylor. 6. Enquiries should be directed to Rory Taylor on 020 7271 0242 (email:[email protected]). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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