It’s fair to say that Lumo- which is almost entirely revenue abstractive, no matter how hard the ORR tried to argue otherwise- only got their OA licences in 2016 and 2024 because of similar political pressure from the other side of the spectrum.
If OA operators are charged the full, non-subsidised, cost of their paths then fine. But they are not and, more importantly, if they were then business cases for Lumo and Grand Central would go straight out of the window.
As for Grand Central’s revenue abstraction from York, there is a very good reason why GNER were so very angry when GC’s OA application was granted in 2006. As Christopher Garnett pointed out, GC were being charged less than GNER and were using that discount to undercut GNER. Not much has changed since 2006; Garnett was right then and the same argument applies now.
It isn’t fair to say Lumo is almost entirely revenue abstractive. That is just your assertion because you don’t like OA. It has no basis in fact - I have dealt with that on another thread - and political pressure was not applied to grant it rights (not a licence).
You are absolutely correct that if OA was charged the full cost of its paths, they would fold. But that’s not the current system - everyone pays only marginal costs plus markups where the market can afford. It was done that way to encourage model shift to rail.
Your mention of CG and his assertion that GC were being charged less than GNER is useful because the Judge in the subsequent High Court Case found otherwise. GC and GNER were being charged on exactly the same basis.
The Fixed Track Access Charge was found to be an “artificial construct”, designed to flow residual funding monies (after Grant and Charges) from the DfT to NR. It was a form of laundering Grant, not a proper cost charge and TOCs were protected from the annual variations in FTAC, which could be huge either way.
In that Court Case it was stated that LRIC charging was preferred by the ORR but NR was then in no position to allocate its costs correctly. That position has now changed and in PR18 NR did a lot of work in allocating LRIC to Operator and Service Group. If the “market can bear” test is removed from the Regs by the forthcoming legislation, then LRIC charging (probably on a per train mile basis) could well be introduced in 2029.
In the meantime Lumo will shortly be paying more per train mile in ICC than LNER will be “paying” in FTAC! That shows how bonkers the system has become and how it badly needs revising so everyone is charged (or in the case of GBR allocated costs) on the same transparent basis.