Competition in the supply chains which support Great Britain’s railway is essential if passengers and taxpayers are to receive a high quality service at an efficient cost. The proposed merger of Siemens and Alstom is a major threat to competition in the key areas of signalling and rolling-stock. We are concerned that the merger could increase costs significantly in these markets which together account for over £2 billion per year of rail industry expenditure.
Each of the companies are key players in both supply chains. For signalling, we consider the transaction is effectively a ‘2 to 1’ merger, creating a single monopoly supplier. For rolling-stock, Siemens and Alstom have historically and in recent tenders, been fierce, close rivals. The merger will cause a substantial reduction in the pool of competitors for high value rolling stock contracts.
Our view is that the alleged threat of competition from Chinese manufacturers, which has widely been cited as a justification for the merger, has been over exaggerated, particularly in relation to Great Britain.
My ORR team will continue to engage closely with the Commission and the Competition and Markets Authority to ensure Great Britain’s interest is taken into account. We will continue to make strong arguments throughout the investigation of this merger and press for structural remedies which fully protect competition in these high value markets.