Editing Rail transport in Great Britain (section)

==Train leasing services==
{{anchor|Leasing services}}

At the time of privatisation, the rolling stock of [[British Rail]] was sold to the new operators, as in the case of the freight companies, or to the three ROSCOs ([[rolling stock company|rolling stock companies]]) which lease or hire stock to passenger and freight train operators. Leasing is relatively commonplace in transport since it enables operating companies to avoid the complication associated with raising sufficient capital to purchase assets; instead, assets are leased and paid for from ongoing revenue. Since 1994 there has been a growth in smaller spot-hire companies that provide rolling stock on short-term contracts. Many of these have grown thanks to the selling-off of locomotives by the large freight operators, especially EWS.

Unlike other major players in the privatised railway system of Great Britain, the ROSCOs are not subject to close regulation by the economic regulatory authority. They were expected to compete with one another, and they do, although not in all respects.

===Competition codes of practice===
Since privatisation in 1995, the ROSCOs have faced criticism from several quarters – including passenger train operating companies such as [[Great North Eastern Railway|GNER]], [[Arriva]] and [[FirstGroup]] – on the basis they are acting as an oligopoly to keep lease prices higher than they would be in a competitive market. In 1998, Deputy Prime Minister [[John Prescott]] asked rail regulator [[John Swift (barrister)|John Swift]] to investigate the market's operation and make recommendations. Many believed Prescott favoured much closer regulation of the ROSCOs, perhaps bringing them into the net of contract-specific regulation, i.e., requiring every rolling stock lease to be approved by the Rail Regulator before it could be valid. Swift's report did not find major problems with the operation of what was then an infant market, and instead recommended the ROSCOs sign up to voluntary, non-binding codes of practice in relation to their future behaviour. Prescott did not like this, but he did not have the legislative time allocation to do much about it. Swift's successor as Rail Regulator, [[Tom Winsor]], agreed with Swift and the ROSCOs were happy to go along with codes of practice, coupled with the Rail Regulator's new powers to deal with abuse of dominance and anti-competitive behaviour under the [[Competition Act 1998]]. In establishing these codes, the Rail Regulator made it clear he expected the ROSCOs to adhere to their letter and spirit. The codes of practice were duly put in place and for the next five years the Rail Regulator received no complaints about ROSCO behaviour.

===White paper 2004===
[[File:Avanti West Coast 390151 at Stafford railway station, Jan 2022 02.jpg|thumb|An [[Avanti West Coast]] [[British Rail Class 390|Class 390 ''Pendolino'']] train at [[Stafford railway station|Stafford station]]]]
In July 2004, the DFT's White Paper on the future of the railways expressed dissatisfaction with the operation of the rolling stock leasing market, and the belief there may have been excessive pricing on the part of the ROSCOs.

In June 2006, [[Gwyneth Dunwoody]], chair of the [[Transport Select Committee]] of the [[House of Commons of the United Kingdom|House of Commons]], called for an investigation into the companies.<ref>{{cite news |title= Review of train leasing urged |url= http://news.bbc.co.uk/1/hi/programmes/real_story/3434369.stm |date= 6 June 2006 |work= BBC News |access-date= 6 June 2006 |archive-date= 3 June 2004 |archive-url= https://web.archive.org/web/20040603080140/http://news.bbc.co.uk/1/hi/programmes/real_story/3434369.stm |url-status= live }}</ref> Transport commentator [[Christian Wolmar]] has asserted the high cost of leasing is due to the way the franchises are distributed to the train operating companies. While the TOCs are negotiating for a franchise they have some freedom to propose different rolling stock options. It is only once they have won the franchise, however, they start negotiating with the ROSCOs. The ROSCO will know the TOC's requirements and also knows the TOC has to obtain a fixed mix of rolling stock which puts the train operating company at a disadvantage in its negotiations with the ROSCO.<ref>{{cite book |last=Wolmar |first=Christian  |title=On the Wrong Line |page=289 }}</ref>

===Competition Commission===
On 29 November 2006, following a June 2006 complaint by the DfT alleging excessive pricing by the ROSCOs, the [[Office of Rail and Road|Office of Rail Regulation]] (as it was then called) announced it was minded to refer the operation of the market for passenger rolling stock to the [[Competition Commission]], citing, amongst other factors, problems in the DfT's own franchising policy as responsible for what may be regarded as a dysfunctional market. ORR said it will consult the industry and the public on what to do, and will publish its decision in April 2007. If the ORR does refer the market to the Competition Commission, there may well be a hiatus in investment in new rolling stock whilst the ROSCOs and their parent companies wait to hear what return they will be allowed to make on their train fleets. This could have the [[unintended consequence]] of intensifying the problem of overcrowding on some routes because TOCs will be unable to lengthen their trains or acquire new ones if they need the ROSCOs to co-operate in their acquisition or financing. Some commentators have suggested that such an outcome would be detrimental to the public interest. This is especially striking since the [[National Audit Office (United Kingdom)|National Audit Office]], in its November 2006 report on the renewal and upgrade of the West Coast Main Line, said that the capacity of the trains and the network will be full in the next few years and advocated train lengthening as an important measure to cope with sharply higher passenger numbers.

The Competition Commission conducted an investigation and published provisional findings<ref>{{cite press release |url=http://www.competition-commission.org.uk/press_rel/2008/aug/pdf/22-08.pdf |publisher=Competition Commission |title=Rolling stock leasing market investigation: Provisional findings |date=7 August 2008 |access-date=26 October 2008 |archive-url=https://web.archive.org/web/20081023151028/http://www.competition-commission.org.uk/press_rel/2008/aug/pdf/22-08.pdf |archive-date=23 October 2008 |url-status=usurped  }}</ref> on 7 August 2008. The report was published on 7 April 2009.<ref>{{Cite web|url=http://www.competition-commission.org.uk/assets/competitioncommission/docs/pdf/non-inquiry/rep_pub/reports/2009/fulltext/546|title=Rolling Stock Leasing market investigation|website=Competition Commission|url-status=usurped|archive-url=https://web.archive.org/web/20140520220434/http://www.competition-commission.org.uk/assets/competitioncommission/docs/pdf/non-inquiry/rep_pub/reports/2009/fulltext/546|archive-date=20 May 2014}}</ref> A press release{{cn|date=September 2024}} summarised the recommendations as follows:

* introduce longer franchise terms (in the region of 12 to 15 years or longer), which would allow TOCs to realise the benefits and recover the costs of switching to alternative new or used rolling stock over a longer period, which should increase the incentives and ability for TOCs to exercise choice
* assess the benefits of alternative new or used rolling stock proposals beyond the franchise term and across other franchises when evaluating franchise bids. This will encourage a wider choice of rolling stock to be considered in franchise proposals, irrespective of franchise length
* ensure franchise invitations to tender (ITTs) are specified in such a way franchise bidders are allowed a choice of rolling stock
* requiring the ROSCOs to remove non-discrimination requirements from the Codes of Practice, which would provide greater incentives for the TOCs to seek improved terms from the ROSCOs
* requiring rolling stock lessors to provide TOCs with a set list of information when making a lease rental offer for used rolling stock, which would give TOCs the ability to negotiate more effectively

===Leasing companies (ROSCO)===
:''See also [[Rolling stock company]]''

Three companies took over [[British Rail]]'s rolling stock on privatisation:
* [[Angel Trains]] –  has 4,400 vehicles in the UK owned by [[AMP Capital|AMP Capital Investors]], PSP Investments and [[International Public Partnerships]].
* [[Eversholt Rail Group]] – owns a fleet of over 4,000 vehicles and is owned by [[CK Hutchison Holdings]] and [[Cheung Kong Infrastructure Holdings]].
* [[Porterbrook]] – leases some 3,500 locomotives, trains and freight wagons; owned by a consortium including [[Alberta Investment Management Corporation]], [[Allianz]], [[Électricité de France]] and Vantage Infrastructure.

A number of other companies have since entered the leasing market:
* [[Sovereign Trains]] – a company that forms part of the same group as the open-access operator [[Grand Central (train operating company)|Grand Central]]. Sovereign Trains owned the rolling stock operated by Grand Central. Dissolved after the stock was sold to Angel Trains<ref>[http://www.railwaygazette.com/news/single-view/view/10/angel-trains-in-grand-central-hst-sale-and-lease-back-deal.html Angel Trains in Grand Central HST sale and lease-back deal] {{Webarchive|url=https://web.archive.org/web/20201124152510/https://www.railwaygazette.com/news/single-view/view/10/angel-trains-in-grand-central-hst-sale-and-lease-back-deal.html |date=24 November 2020 }} ''[[Railway Gazette International]]'' 2 March 2010</ref>
* [[QW Rail Leasing]] – a joint venture between the [[National Australia Bank]] and [[Sumitomo Mitsui Banking Corporation|SMBC Leasing & Finance]] to provide the EMU rolling stock to [[London Overground]].
* [[Macquarie European Rail]] – in April 2009, [[Lloyds Bank|Lloyds TSB]] entered the rolling stock market by funding the purchase of 30 new [[British Rail Class 379|Class 379s]] for [[National Express East Anglia]]. In November 2012, Lloyds sold the company to [[Macquarie Group]].
* [[Beacon Rail]],<ref>{{cite web |url=http://www.beaconrail.com/ |title=BRL Home |publisher=Beaconrail.com |access-date=20 May 2014 |archive-date=21 April 2014 |archive-url=https://web.archive.org/web/20140421080804/http://beaconrail.com/ |url-status=live }}</ref> owns [[British Rail Class 68|Class 68]] and [[British Rail Class 88|Class 88]] locomotives, as well as {{brc|220}}, [[British Rail Class 313|Class 313]] and {{brc|221}} DMUs.<ref>{{cite news|title=Rolling stock leaser Beacon Rail acquires 78-train fleet|url=https://www.globalrailnews.com/2017/07/26/rolling-stock-leaser-beacon-rail-acquires-78-train-fleet/|access-date=9 August 2017|work=Global Rail News|date=26 July 2017|archive-url=https://web.archive.org/web/20170810050611/https://www.globalrailnews.com/2017/07/26/rolling-stock-leaser-beacon-rail-acquires-78-train-fleet/|archive-date=10 August 2017|url-status=dead}}</ref><ref>{{Cite web|title=Cl.313|url=https://beaconrail.com/en/fleet-item/cl-313/|access-date=6 July 2021|website=We lease passenger and freight rolling stock across Europe|language=en-GB|archive-date=9 July 2021|archive-url=https://web.archive.org/web/20210709183150/https://beaconrail.com/en/fleet-item/cl-313/|url-status=live}}</ref>
* [[UK Rail Leasing]], owns some [[British Rail Class 56|Class 56]] locomotives
*Rock Rail Limited, owns Class 717 Siemens Desiro EMUs in service on Govia Thameslink Railway's Great Northern routes, Stadler Flirt Class 745 EMUs and Class 755 BMUs entering service on Abellio's Greater Anglia franchise, Bombardier Aventra Class 701 EMUs entering service on FirstGroup and MTR's South Western franchise, Hitachi Intercity BMUs for service on Abellio's East Midlands franchise and Hitachi Intercity EMUs and BMUs for service on First Group and Trenitalia's Avanti West Coast franchise<ref>{{Cite web|title=Rock Rail UK|url=https://rockrail.com/rock-rail-uk/|access-date=30 June 2020|website=Rock Rail|language=en|archive-date=2 July 2020|archive-url=https://web.archive.org/web/20200702014342/https://rockrail.com/rock-rail-uk/|url-status=live}}</ref>

===Spot-hire companies===
Spot-hire companies provide short-term leasing of rolling stock.
* MiddlePeak Railways, a locomotive hire & lease company with a stock of locomotives similar to [[British Rail Class 08|Class 08]] & [[Nederlandse Spoorwegen|NS]] 0-6-0 [[NS 600 Class|600 Class]] shunting locomotives, other locomotives, rolling stock & parts.<ref>{{cite web |url=http://www.middlepeak.co.uk/locomotives.htm |title=MiddlePeak Railways Ltd – Shunter Lok/Loco/Loc hire – Locomotive & Rolling Stock; hire & Leasing!! Railshunters – rangeerlocomotieven |publisher=Middlepeak.co.uk |access-date=20 May 2014 |archive-date=17 January 2016 |archive-url=https://web.archive.org/web/20160117024648/http://www.middlepeak.co.uk/locomotives.htm |url-status=live }}</ref><ref>{{cite web|url=http://www.middlepeak.co.uk/railway.htm|title=MiddlePeak Railways|website=middlepeak.co.uk|access-date=27 March 2018|archive-date=15 May 2021|archive-url=https://web.archive.org/web/20210515231901/https://www.middlepeak.co.uk/railway.htm|url-status=live}}</ref>
* GL Railease owned by [[GATX]] Capital, and Lombard, a subsidiary of the Royal Bank of Scotland.
* [[Harry Needle Railroad Company]], an industrial and main line locomotive hire and overhaul company. Operates [[British Rail Class 08|Class 08]] shunting locomotives, and [[British Rail Class 20|Class 20]] locomotives.<ref>{{cite web|url=http://www.hnrc.co.uk/|title=HNRC – Harry Needle Railroad Company|access-date=28 April 2004|url-status=dead|archive-url=https://web.archive.org/web/20040520002808/http://www.hnrc.co.uk/|archive-date=20 May 2004}}</ref>
*[[Riviera Trains]], a spot-hire company with a fleet of [[British Rail Class 47|Class 47]] locomotives. This company works closely with [[DB Cargo UK]].<ref>{{cite web |url= http://www.riviera-trains.co.uk/ |title= Welcome to Riviera Trains |access-date= 13 March 2012 |archive-date= 7 February 2012 |archive-url= https://web.archive.org/web/20120207092126/http://www.riviera-trains.co.uk/ |url-status= live }}</ref>
*[[West Coast Railways]], a spot-hire and railtour-operator with a stock of [[British Rail Class 37|Class 37]] and [[British Rail Class 47|Class 47]] locomotives, as well as the rebuilt [[British Rail Class 57|Class 57]] locomotive.
* Eastern Rail Services, a rolling stock spot hire company, providing leasing and hire, acquisition, parts supply and overhaul and technical advice.