The[Railtrack] Independent Station Access Conditions (1996 Edition)


This Page was Last Updated on 29th January 2010


38.     Inspection of books, records and accounts


Rule, clause or Condition


Date of Hearing

Points made within Determination  (Verbatim extracts given in Italics, or between quotes)


ADP35,36 and 38

September 2009

17.    The provisions of RISAC, which have remained largely unaltered since initial publication in 1996, prescribe the processes that Network Rail and the relevant POs should follow to promote and/or protect their respective rights and commercial interests.   As such

17.1.     they are processes that are effective only in proportion to the diligence with which each party fulfils its own obligations, and verifies that the other has duly done the same;

17.2.     they are processes requiring annual re-cycling, perhaps in recognition that some initial headline allocations of costs between parties owed more to expediency than to sound accounting and arithmetic, and were thus only estimated approximations;

17.3.     they reasonably contemplate that the level of understanding of station activity, and the accuracy of accounting for that activity would evolve to meet the progressively more sophisticated needs of the privatised railway;

17.4.     whilst they do not preclude “broad brush” agreement at the headline level in relation to the preparation of a “best estimate” of Total Variable Charge, there is no implied provision for such a broad brush approach to specifications of functions, or accounting for actual expenditure, or for such an approach to pre-empt any findings as a result of Inspections;

17.5.     they do not lay down any benchmarks in respect of the proportions of any head of expenditure that should be allocated to either Qualifying Expenditure or non-QX;

17.6.     they do provide mechanisms by which, where parties are not agreed upon the specifics in relation to apportionment between QX and non-QX, they may have recourse to appropriate dispute resolution.

18.    The decisions by the First Group TOCs and the Govia TOCs each to invoke the right to inspection accorded by RISAC 38.1 appear to have revealed that the provisions of RISAC have not been observed in detail in significant areas.   In particular,

18.1.     where there have been custom and practice allocations between QX and non-QX, no documentation justifying those allocations has been preserved by Network Rail;   nor was any evidence brought forward, by any party, as to previous attempts to test their appropriateness;

18.2.     the accounting practices used have not been immune from error, and would appear to have allowed scope for substantial misallocations of expenditure (the Panel was advised of discrepancies thus far totalling £170,000). [ADP35,36and 38]