Rail 527: Network Rail begins to take over the railway

With the publication of its strategy for the South West , CHRISTIAN WOLMAR applauds the broader vision of the railway that is being championed by a newly self-confident Network Rail.

Network Rail is growing up. That was apparent from the first of the cumbersomely named Route Utilisation Studies, for which the company has taken over responsibility from the Strategic Rail Authority.

The study, covering the South West lines out of Waterloo is written in a completely different tone from the SRA’s efforts. Whereas the SRA’s Greater Western study had tables on the least used stations in the region which suggested that cutbacks were at the forefront of its thinking, Network Rail’s effort was focussed on growth and what to do about it.

And whereas the SRA’s RUS documents tended to knock any proposed expansion schemes on the head even before they had been consulted upon, Network Rail’s is full of innovative solutions ranging from removing the shops on the concourse (which of course as the landlord of major stations it could do tomorrow) to changing the fares structure. John Armitt, the chief executive mentioned that one idea to reduce congestion at the peak hour would be differential pricing (crudely called a rail ‘congestion charge’ in the press) so that more people would be induced to travel in the shoulders of the rush hour rather than at its very peak between 8am and 9am.

Now that suggestion prompted me into action. ‘What have fares go to do with you?’ I asked rather bluntly, making the point that Network Rail has nothing to do with the passengers, let alone fare levels. Armitt said that Network Rail had talked to all the stakeholders involved and that included train operators: ‘And that was one idea that came up’. Now quite apart from the fact that no one knows who will be operating the line after the franchise is renewed in February 2007 and therefore asking the present operator, Stagecoach for its opinions may be irrelevant, this suggests that NR is taking a much more holistic view of its role in the railways.

Certainly Railtrack would never have talked about fares or what to do about peak demand. It saw its role as strictly limited to running the infrastructure and its customers were not the public but solely the passenger and freight operators. Network Rail’s readiness to take on a wider interest in the railway as a whole was apparent in the fact that Armitt talked, too, about the north south link and even said that it was looking at the maglev technology, even though, of course, maglev trains would require a whole new infrastructure and would not be able to run on any existing track currently operated by Network Rail. ‘We are taking an interest because it is our duty to do so’ said John Armitt. Well, no John, you are being too modest. You are taking an interest because your company has a wider vision of the railway than its little mourned predecessor.

This is the new, post review, Network Rail showing much more self confidence by assuming many of the functions that once belonged to British Rail and which have been rather lost since its demise. This is to be applauded. Someone has to be batting for the railway and clearly Network Rail, which in the past has seemed too timid to do so, is now daring to venture where it would not go before. However, there is still an obvious duplication in that the Department for Transport supposedly has inherited the strategic role following the demise of the SRA. The fact that there are two organisations with overlapping responsibilities could not have been better illustrated by the fact that a couple of days after the South West utilisation study was published by Network Rail, the Department for Transport issued its own effort, the consultation document for the South Western franchise. Normally, Network Rail says, the route utilisation document would inform the franchise document, but in this case the refranchising timetable did not allow that, although apparently some attempts were made to ensure that the two organisations were singing from the same hymn sheet. This is not quite the joined up government which we were promised when Labour was first elected.

Moreover, the DfT’s consultation document is largely expressed in the same mealy-mouthed ‘let’s keep the costs down’ language and ‘is there a business case’ that the SRA was forced to use. The first priority of the franchisee will not be to ensure a bigger better railway but ‘meeting affordability targets’. Of course there is some mention of growing usage and even a section on schemes like Airtrack, the long-mooted idea to bring people into Heathrow Airport from the West, and running trains to Swanage from Wareham, but the emphasis is clearly on saving money. Business cases are all well and good, but the models used by the Department for Transport always seem to fail to take into account properly the wider social benefits of the railway.

(I can’t resist adding that yet again the document demonstrates the ridiculous nature of the franchising arrangement since there are a whole host of future risks and opportunities for the franchise such as Crossrail, the Olympics and the Waterloo International platforms which will be impossible to price and which therefore will result in more public money being paid to the operator because they will all make conservative bids as a result. Now if we were allowed to see the bids, then we might be able to assess whether that assumption is pessimistic….)

While Network Rail’s more holistic approach should be applauded, there is a suspicion that outside of the routes with big flows such as London commuterland and the main lines, the bad habits of Railtrack live on. Take the Boston – Skegness line which gets particularly crowded in the summer. The charter firm, FM rail, was asked by the franchisee, Central, to price the provision of loco-hauled nine carriage trains, which was an innovative deal involving the taking of part of the revenue risk by FM. However, NR killed off the idea first by saying there wasn’t platform space at Nottingham and then by imposing a speed restriction for loco hauled stock on the line which effectively makes the FM rail plan unworkable. Network Rail argues that the line is in a bad condition, which appears to be in breach of the requirement to maintain it for which it has been paid under the regulatory regime, and that it would cost too much to upgrade. NR’s lack of interest in this traffic is disappointing in that it will drive passengers off the railway and will have a major impact on the economy of a rundown town like Skegness which needs all the help it can get. If Network Rail is beginning to take on a wider mantle, then that should reflect considerations like the social value of the railway – after all, why else does it get vast amounts of public subsidy.

Nevertheless, despite such occasional bouts of bad behaviour, the route utilisation study and the interest in the high speed line shows that Network Rail is becoming more assured in its role at the heart of the railway.

Perhaps we should not be surprised by the change of tone. The SRA was a government agency with a limited budget that was always trying to fit a quart into a pint pot. It was constrained by its close oversight from the Treasury and it was prevented by ministers from publishing documents that espoused expansion, such as the revised Strategic Plan in early 2004. I have a copy in my files of that upbeat document which considered projects like Crossrail, a north south high speed link and an upgraded East Coast line but which was shelved on orders from Alistair Darling.

Network Rail, on the other hand, has a vested interest in looking at expansion and enhancements. A growing railway will mean a rising budget for the company and publishing documents that demonstrate the need for a bigger and better railway are clearly in its interests. (Wolmar’s first law of journalism when looking at why things happen applies here: ‘Always look for the vested interests first’) Network Rail is therefore in expansionary mode. It is flush with money and hoping that it will remain so when it enters the next regulatory control period in 2009, although many in the industry have grave doubts about this given the Treasury’s strictures and the forthcoming ‘High Level Output Statement’ process. (described in this column in Rail …) Now, how far and how much Network Rail is prepared to stand up to government during that process is the £6.4bn (approx its budget this year) question. British Rail chairmen used to have fantastic behind the scenes rows with the transport ministry and the Treasury. Will Armitt and co be able to demonstrate the same strength when it comes to the crunch?