A PASSENGER PERSPEC TIVE Former BR Western Region Operations Manager BOB POYNTER, now a member of Newark Business Club, offered the Railway Study Association a traveller’s viewpoint on railway privatisation
ack in January 1993, the most recent reorganisation of British Rail had led to over a tenth of all railway staff being employed in HQ jobs. While there was a need for change, I did not share the view of government ministers who appeared to think that ‘everything that the private sector does turns to gold’. I believed then (and still do) that the railway is best managed with decisions made at the lowest possible level in the organisation. Whether the industry is in the private or public sector doesn’t
really matter; what is important is the way it is managed. KEY CONCERNS Fragmenting British Rail would have its effects on both performance and costs. I am still of the opinion that the railway operates best when the trains and the infrastructure are under the same management. Where were the incentives for businesses to invest in the privatised railway? A seven-year
franchise period is out of step with asset life. In 1993 there was a lack of evidence that the Government was prepared to make the necessary investment to improve the railway infrastructure. At that time, most Government capital funds were destined for the construction of High Speed 1. Then there was the level of regulation proposed. The White Paper ‘Buses’ of 1984 (Cmnd 9300) had made it clear that regulatory systems cost money and resources to run, so what had changed?
Royal Border Bridge: an East Coast IC225 set at Berwick-upon-Tweed on 11 July 2013. Paul Bigland
Modern Railways February 2015
None of the privatisaton proposals seemed likely to reduce the level of political interference in the railway but I did not foresee Department for Transport civil servants micro-managing the railway to the extent that they require the Inter-city East Coast (ICEC) franchise to provide one train a day from Huntingdon and St Neots in the morning peak from 2018. On a more positive note, there were encouraging results from the then recent total route modernisation of the Chiltern line that the Government should have heeded. WHERE ARE WE NOW? There is no doubt the railway is in better shape than it was 20 years ago, even if you take the view that the changes are in spite of, rather than because of, privatisation. There are more passengers and the freight businesses are doing well, even if they appear to need six paths for every train they actually run. There has been more investment, with the five-year Control Periods being crucial. There is no indication that the Government is looking to reduce services, although the consultation document on the Northern franchise might be construed differently. However, the Achilles heel is the huge amount of taxpayers’ money that the railways still need.
Successful franchise: at Hatton North Junction on 15 December 2014, new loco No 68012 heads the first Chiltern Railways full test and training empty stock working from London Marylebone north to Birmingham and on to Stourbridge Junction. Fraser Pithie
FRANCHISING How well have franchises worked? Some have worked better than others; there are very positive results from what is now being delivered by Chiltern Railways during its 20-year tenure. There have been failures too, and not just the West Coast main line (WCML) fiasco. Too many franchises end up in ‘cap and collar’ revenue support, with the tab being picked up by the
taxpayer. The process of re-letting 16 franchises every seven years is a massive and very expensive task. The circumstances can be totally different – thus the WCML has seen major investment recently, while the East Coast main line (ECML) has not. Assessing the revenue that will be generated in 20 years’ time is clearly fraught with difficulty, so one option would be to go for longer franchises, but
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with periodic five-year reviews. These would take into account changing circumstances. There is also the effect of Open Access operations, which caused the access rights for Great North Eastern Railway (GNER) to operate a half-hourly service between London and Leeds to be delayed, and National Express East Coast never gained the access rights to run its enhanced service. Any system that does not guarantee track access rights for a franchisee to operate contracted services is surely fundamentally flawed, and access rights should be hard wired into franchise contracts. EAST COAST There is little doubt that the Government and the private sector have a poor record in managing the East Coast franchise. This led to the failures of GNER in 2007 and National Express in 2009, and so there were three changes of management in just two years. Directly Operated Railways (DOR) was supposed to run the franchise for two years, but it has already been running it for five. This is on one of the most important strategic railways in Europe, let alone the UK. However, DOR has done a really good job, arguably better than the private sector.
BIDDER RISKS The level of risk facing ICEC bidders in 2014 is far greater than it was in 2005 or 2007. It is unclear what timetable they will be able to run from the new franchise start date in 2015, let alone in 2020 when the full Inter-city Express Programme (IEP) fleet should be available. What will be the impact of any infrastructure improvements on ICEC services? Is the available investment from the ECML enhancement or journey time improvement funds anywhere near adequate to improve the resilience of the infrastructure and give faster journey times? The cost of unreliability is huge; a couple of years ago, Virgin estimated that for the West Coast franchise it was between £130 million and £200 million a year. What is the cost for ICEC, and who will get the financial benefit if it is improved? Will ICEC get the access rights to operate the contracted train service? The omens are not good; Grand Central already has access rights until 2026, longer than the period of the new ICEC franchise. What will be the impact of Thameslink services originating from south of the Thames at pinch points like Welwyn, of further devolution in Scotland, or the future form of rail governance and organisation in the north of England?
INVESTMENT PRIORITIES Are the priorities for investment ranked to give the best value for money? The current policy on the ECML is to go for short term fixes rather than long term solutions. One example is the slow approach speeds to Peterborough station platforms from the south, an issue which should have been addressed when the new island platform was built. Why is it that £154 million has been allocated for Norton Bridge Junction (Stafford), used by 25 trains an hour, when £22 million is seen as adequate for Doncaster, used by 33 trains an hour? Or why prioritise £62.5 million for the Oxford-Worcester line, carrying 39 trains per day and no freight, above a £70 million scheme to replace the flat crossing at Newark with a flyover? This crossing is used by over 200 trains per day. There is also the curious case of the IEP. If the IEP trains really do cost 60% more than Pendolinos (pace Roger Ford), the industry will be saddled with those excess costs for the next 30 years. FARES STRUCTURE The ability to walk on to any train is one of rail’s biggest advantages, and it is illogical to make it so expensive to do so.
Under the wires: a CrossCountry Voyager crosses the viaduct at Durham on 4 September 2011. Paul Bigland
Modern Railways February 2015
Short term fix? East Coast DVT 82211 trails an IC225 set northwards away from a stop at Peterborough bound for Newcastle on 13 October 2011. Tony Miles
Flexibility is essential for business travellers, but cost is now a significant factor, driving travel choices made by businesses. Off-peak, when three trains are running each hour, does it really matter whether passengers travel on the 13.00, 13.20 or 13.40 from Euston to Manchester? The fare structure is far too complicated and a potential deterrent to passengers. One such example is a flexible Standard Class single rail ticket from London to Cornwall, which costs only 20% less than a chauffeur-driven top class hire car would do. There is a danger that rail will lose too many people at the top end of the market. Yet whilst it is logical to sell cheap tickets when filling marginal capacity on trains, is the industry driving demand with low fares to such an extent that it requires increased capacity to carry them? At the other end of the scale, premium fares increase the revenue per train, so why reduce the amount of First Class accommodation to carry more passengers at bargain fares? East Coast has shown the way by improving the product; combined with better marketing, this has increased First Class volumes by 40%. Would assessing the revenue per train kilometre (for each train) produce a more logical fare structure? It would certainly help prioritise track access applications. Fare structures need to be simplified and flexible fares made more competitive. ROLLING STOCK STRATEGY It is difficult to see how costs can be controlled without a coherent rolling stock strategy. What rolling stock will be required in 10 years’ time? What are the opportunities for cascading diesel trains displaced by electrification? Current plans are for HSTs to operate West of England services for the foreseeable future as well as some services in Scotland, but what happens to others displaced from East Coast, Great Western and Midland main line services? Cascading them to CrossCountry would reduce capacity problems there and release Class 220 and 221 Voyagers to operate routes such as:
n n n n n
Liverpool – Norwich; Nottingham – Cardiff; Birmingham – Stansted Airport; Nottingham – Leeds; and Cardiff – Portsmouth.
These units could still be maintained at Burtonon-Trent. In addition, there is no shortage of places in which displaced Class 158 or Class170 units could be used. ELECTRIFICATION WOES Almost 400 miles of the ECML between London and Edinburgh has now been electrified for over 20 years, yet 43% of all long distance departures from King’s Cross are currently operated with diesel traction. North of York, the situation is even less satisfactory, notably because of the influx of TransPennine and CrossCountry services. It isn’t just the Open Access operators, either – 31% of the trains operated by East Coast out of King’s Cross are HSTs. If the operation of electric trains instead of diesel reduces costs, why is the Office of Rail Regulation (ORR) allowing so many more expensive diesel trains to operate long distance services on the ECML? The DfT is buying expensive bi-mode trains to reduce the number of straight diesel trains operating under the wires. Yet the ORR has recently agreed track access charges for Grand Central to operate diesel trains on the route until 2026. Where is the logic? Perhaps it is time for operators to pay a higher access charge to operate diesel trains on an electrified railway. OPEN ACCESS Whilst the ORR has a duty to promote competition, it is disappointing that they have done so on the ECML without maintaining a level playing field. Demand for train paths on the route clearly exceeds supply, so why are open access operators only paying the lower variable track access charge that is supposed to reflect the marginal cost to Network Rail of running their trains?
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Neglected? East Coast loco No 43312 arrives at Lincoln on 8 May 2011, with classmate No 43208 on the rear. Lincoln did not get its planned two-hourly through service to London which was due to come with the new East Coast timetable, and currently enjoys just one service a day to King’s Cross. The next franchise promises a regular through service from May 2019. Richard Tuplin
Indeed, on what basis can the 17% of long distance train paths currently used by open access operators be classified as marginal? Discounting charges when demand exceeds supply is simply poor business practice. There are also doubts about the suitability of the Operational Research Computerised Allocation of Tickets to Services (ORCATS) revenue allocating system when used for train operating companies in direct competition. There would be far greater transparency over the financial impact of open access operators on the taxpayer if they only received the revenue for the passengers they actually carried. With modern technology and effective on-train ticket examination, this is an issue that could be solved easily.
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From the outside, it does appear that the ORR is giving far greater priority to competition on the ECML than to other duties for which it has a statutory responsibility, such as reliability and punctuality. The High Level Output Specification (HLOS) required the ICEC franchise to deliver a Public Performance Measure (PPM) of 92% by the end of CP5. Why, therefore, has the ORR allowed performance on the ECML to deteriorate to the extent that it has now reduced the PPM target to 88%, again by the end of CP5? There are very few business people who consider that 12% of trains arriving over 10 minutes late is acceptable, so why has the ORR not insisted that Network Rail and ICEC identify a recovery plan to deliver the HLOS target of a 92% PPM by the end of CP5?
Another duty of the ORR is to take ‘measures to facilitate the making by passengers of journeys which involve use of more than one passenger service operator’. The May 2011 timetable change on the ECML was a disaster for passengers wishing to travel between Lincoln and London, with connections broken at Newark and journey times extended. Although Lincoln and Chester are similar cities in many ways, the contrast between their train services to/from London is stark. Is it unreasonable to suggest that the ORR has failed Lincoln passengers? The ORR makes value for money judgements on rail companies, but who is assessing its value to rail users and taxpayers?
Level playing field? Unit No 180110 calls at Doncaster with a First Hull Trains service on 30 May 2014. Paul Bigland
2020 VISION The main objective for any long distance railway is to contribute towards economic growth in the corridors and regions it serves. A standard hour timetable is the best way of meeting that requirement. Investment in new trains and new signalling south of Doncaster must deliver a step-change improvement on the East Coast route from 2020. Punctuality and reliability need to be good. You will never run a reliable railway if you consider that trains which are 10 minutes late count as being ‘on time’. A minimum requirement from the investment should be for 80% of trains to arrive on time, with 95% within 10 minutes of right time. There also needs to be increased connectivity
between intermediate stations, not just for end to end journeys. Quicker journey times are essential, such as London to Leeds in two hours with up to four stops and London to Edinburgh in four hours with up to five stops. Faster trains generate more revenue and give better utilisation of both trains and train crews, driving down costs. There needs to be an increased service frequency from London with probably 7tph (trains per hour) in the off-peak and 8tph in the peak. The availability of five-car IEPs would allow an hourly service of through trains to destinations like Bradford, Harrogate, Hull, Lincoln and Middlesbrough. While there are performance risks associated with splitting and joining trains en route, dividing 10-car trains at intermediate stations is a good way of meeting the known highlevel of demand at the southern end of the route while serving off-route destinations. Given the proposed introduction of HSTs on domestic services in Scotland to Aberdeen and Inverness, how viable are through ICEC services north of Edinburgh? Terminating them in the Scottish capital would result in a smaller and potentially all-electric fleet, and the money saved could be used for in-fill electrification to off-route destinations including Lincoln, Hull, Harrogate and Middlesbrough. Does the level of demand at intermediate stations between Newcastle and Edinburgh justify so many ICEC trains serving them? Might extending the hourly Newcastle-Morpeth trains to Edinburgh, using (say) Class 350s, be an altogether better option? Consideration should also be given to reopening the closed but largely intact Leamside line during CP6 as a high speed route to reduce London to Newcastle journey times. A Parkway station could be built in the Washington area to serve Wearside. The Victoria viaduct would need reconstruction, but the majority of the work could be undertaken without any disruption to ECML services. FURTHER AHEAD HS2 may be coming, but not yet. Stations from Peterborough to Doncaster, plus Wakefield and stations to Hull, will gain nothing from HS2, which will not reach Leeds for 20 years or so at best. When
that happens, new links will become possible, which could include an hourly Cambridge – Leeds service. There will be major capacity problems long before then, and the upgrading of the ECML to 140mph should be completed relatively quickly. CONCLUSIONS In conclusion, it is worth remembering what passengers want: n a more reliable railway – passengers really do not care which company has delayed their train; n fares that represent value for money, especially for flexible journeys; n a fare structure that is easily understood; n a seat – standing on a train from York to King’s Cross is totally unacceptable; n frequent services – business travellers in particular welcome a standard hour timetable; and n faster journey times – especially important for business travellers. Passenger aspirations are most likely to be met by: n investment which is targeted more effectively; n reducing costs in non-essential areas, targeting posts that do not contribute to the day-to-day running of the railway; and n major decisions driven by route managers who have an understanding of stakeholder requirements. Does this mean that a radical shake-up of the railway organisation is necessary? Probably, unless reduced contractual interfaces can be achieved in other ways. a John Glover This lecture was delivered before the award of the new East Coast franchise and the Chancellor’s Autumn Statement.
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February 2015 Modern Railways