The UK rail industry could save up to ВЈ1bn ($1.58bn) per annum through greater efficiency and alignment of incentives between train operators and Network Rail, according to an interim report by Roy McNulty.
The report, commissioned by the government, was jointly sponsored by the Office of Rail Regulation to investigate the industry's value for money on the rail network.
Plans were also unveiled to establish a high-level industry group to drive industry reforms by examining the options for getting Network Rail and train operators to work together more efficiently.
The reforms could lead to route or area-based alliances, aligning track and train operations while a single national body will continue to act as custodian of the network to carry out some functions.
The government has also revealed plans to develop changes to the rail franchising system to make franchises longer, more flexible and more responsive, running for up to 15 years if performance is adequate.
The Office of Rail Regulation has announced that the West Coast Main Line franchise which operates trains between London and the West Midlands, North West and Scotland, will be the first franchise to be let under the new franchise model, running from 2012 to 2026.
The final proposals for rail industry reform will be announced by November 2011, after McNulty delivers the final report in April 2011.
