Train Operating Companies vs Network Rail – Follow the Money

Important Notice: This is a basic, speculative, view based on some knowledge and conversations with the industry. Exact figures have been left out or generalised to protect business confidentiality. But it makes for an interesting thought process.

The rail industry is heavily reliant on finance-flows. So the relationship between TOCs and NWR is complex. Both NWR and TOCs have teams of employees looking after these matters.

But in simple terms: NWR look after the infrastructure ie signals, points, track and charge the TOCs access fees for running trains across it. NWR is a fully owned government subsidiary, financed by the tax payer.

Train Operating Companies

TOCs operate the services, manage some stations (but not the major termini – NWR do that) and pay NWR a daily access charge – we’ve been told a figure by one TOC but cannot verify its accuracy. It is not a small figure. Whilst all TOCs are private companies (eg Abeillio), some run Government contracts and are paid a set management fee by the DfT (eg GTR).

So, what happens during disruption and why do TOCs seem to insist on sending out trains when lines are pre-blocked?

That depends on the reason for the disruption.

If it is an INFRASTRUCTURE fault then NWR have to pay the TOC a penalty for every minute that each train is delayed. The penalty varies across the day; the high peak penalty is more than during off peak.

It is a significant amount in three figures, so if (say) 20 trains are delayed by 30mins then that is 600mins of fines. Aggregate that up during a major incident to get an idea of the potential overall figure involved.


Conversely, if a TOC cancels a train by their own decision (failed train, no crew, disaster recovery) then the TOC has to pay a penalty for non-running.

So what happens if a TOC knows the line is blocked but has trains that it can run? Well, if you held the TOC purse strings, what would you do?
Repeat. This is speculative.

SHRIMP, November 2016