Rail 662: No room for entrepreneurs on the railway

In a recent letter to The Times (which was reprinted in Rail 659), Theresa Villiers, the rail minister argued  that the train operating companies function in a free commercial environment. Train companies are free to lease extra coaches and extend their trains, she said gaily, ignoring the harsh reality of the bureaucratic nightmare that is today’s fragmented railway.

The truth is that the train operators cannot simply take on new rolling stock because they have to seek permission of the Department for Transport, as invariably it is likely to cost more money than they can generate and therefore require more subsidy. Even if the move is purely commercial and profitable, the fact that rolling stock outlives the length of any franchise means that the Department becomes involved.

I have always argued that the railway companies indulge in a kind of ‘pretend capitalism’ and that they are unlike most other types of company which operate in much freer markets. But even I had not realised how difficult it is for operators to make even purely commercial decisions until I came across Southern’s attempt to run extra services between Victoria and Brighton during the off peak and I have found myself feeling sorry for them.

Currently, there is a rather irritating service frequency with three trains an hour but one half hour gap and two 15 minute ones. In their successful franchise bid in 2009, Southern committed itself to changing this through the addition of a fourth train every hour, giving a broadly 15 minute service. This was seen as a commercial decision which could be carried out without extra rolling stock and which would radically improve the off-peak offer to people travelling between London and Brighton.

The aim was to launch the service in the December 2010 timetable but  Southern, though, had not reckoned on the hurdles to effect such a change. In addition to the fourth service, there was going to be a different service pattern, broadly speeding up the trains but at the loss of some stops. At first things moved ahead smoothly. Network Rail examined the proposal and was happy with it. There is, of course, a small incentive in increasing track usage for NR since it receives extra revenue but this is small in terms of its overall revenue.

However, First Capital Connect, which runs trains down to Brighton on the Thameslink route through St Pancras, Blackfriars and London Bridge and out to East Croydon objected to the proposal, arguing that its services would run the risk of being disrupted. There were, too, objections from some rail users from parts of East Sussex who feared there would be poorer timekeeping for trains coming from further east along the coast which join the mainline just before Haywards Heath.

The matter was referred to a Network Rail timetable panel which is charged with adjudicating on such disputes and it decided in favour of Southern. All was set for the December introduction of the new timetable, pending approval by the Office of Rail Regulation. A few test trains were run and Southern was confident of getting the go-ahead. Passenger Focus welcomed the proposed new services, too. It all seemed set for the button to be pushed. But then disaster: ORR refused the request.

ORR’s arguments were based on concerns that with the extra trains the Brighton Main Line would be operating at near capacity all day long and there would be no opportunity to recover from perturbations. The ORR, in a 19 page letter, argued that the performance modelling by Network Rail was inadequate and did not take into account the effect on Victoria. Moreover, Southern had not run sufficient test trains and these had been operated on a Saturday, which was atypical.

But one could argue in response that the improved timetable far outweighed the risk, and that more trains, even with the odd extra delay, might be better than the existing lumpy service. Moreover, it is a question of whose judgement is correct: experienced train operators or the anonymous backroom boys and girls of  ORR?

What this story illustrates above all is the crazy way that the railways are run. Denying commercial enterprises the ability to make judgements on service provision makes a nonsense of the idea that railways are really privatised at all. It means that a commitment that was entered into as part of a franchise bid and accepted by the Department for Transport can be knocked back by the regulator, raising the question of who runs the railways.

As regular readers know, I might not always see eye to eye with the train operators and have frequently been critical of their short-sightedness, but I would be much happier if they were allowed to make decisions about providing extra services than some bureaucrats in a regulator’s office who has probably never been in a control centre or would have difficult sorting out a drinking session in a beer production facility (as I’m sure they would call it). Sure, I recognise that there is a problem of self-interest and maybe First Capital Connect’s objections were well grounded. But why should it be assumed that ORR knows better than NR and, in any case, it was a franchise commitment. Moreover, one of FCC’s main objection was of ‘revenue extraction’, in other words they thought that they would lost Thameslink customers to the new service. But who cares other than First’s shareholders – if more people were attracted onto the railways because a better service was on offer, why does it matter if FCC loses some passengers for what was, in any case, a franchise commitment which they have known about for some time? Railway managers used to be able to make such decisions based on their judgement and experience. Now the so-called privatised railway is hamstrung by rules and regulations that stymie any entrepreneurial spirit, ironically to a far greater extent than in the days of British Rail.

There is a wider point, too, and one which Roy McNulty may want to note. The need for this expensive paraphernalia has been created because of the emphasis on competition, rather than co-operation. In a sensible world – even a franchised one – all the services to Brighton would be run by one company and they would make the optimal decisions about the timetable in order to maximise their revenue and minimise the risk of disruption. They would know their business and make decisions accordingly. Instead we have one organisation, ORR, second guessing what two others, NR and Southern, who are both far closer to the ground, have decided is in the best interests of passengers.The question is, will any of this change for the better when the industry is restructured in response to the franchising and McNulty reviews? I’m afraid I suspect not.

Crisis, what crisis?

There has been some satisfaction within the rail industry that the snow caused more chaos to air services than to the railways. Certainly Heathrow got it in the neck, quite rightly, and to a large extent the railways avoided the kind of media onslaught they had endured last year.

However, at a seminar of transport experts hosted by the Independent Transport Commission, one message came out very clearly. The information provided by the train companies was often patchy, wholly inaccurate or out of date.

The overall impression is that the railways have not yet got to grips with the modern information age. Some websites were barely updated and failed to inform people of changes in the situation. Others did much better. London Midland ran a comprehensive Twitter service, answering individual enquiries and giving information about the general situation. It was an object lesson in how to do it, but oddly not copied by other Govia franchises such as Southern and Southeastern.

OK not everyone is keyed into Twitter or Facebook, but increasing numbers are, and that is the way of the future. I long resisted tweeting but have now realised that it is a wonderful way to keep up to date (@christianwolmar for those interested) and to inform people about what is happening and what I am doing.

However, social networking sites are no substitute for getting the basics right. Julia, in a response on my website, makes a good point that the customer information displays on the platforms are often not updated. She waited a long time for a train from Brighton at London Bridge which, in fact, had been cancelled but the default had been left on the screen, suggesting the train was on time. On complaining, First Capital Connect told her it was a ‘known problem’ which occurred quite often. Indeed, I suffered it at Guildford when a two hourly service failed to materialise on a Sunday, and I had to take a taxi despite having bought the ticket. From talking to industry insiders, all the information is there but needs conveying to the passengers. Time to pull together, chaps and chappesses.

  • T33

    You miss the key point about the Southern service to Brighton – it’s simply not needed!

    Brighton Trains run half empty most of the day especially the new extensions of teh Gatwick Express.

    In the rush to provide services to Brighton, services to intermediate points are overcrowded, slow and badly timed.

    Yes Brighton is a key destination but does it really need 7 trains an hour to London? Of these 7, 4 are fast hardly stopping between Brighton and London and often empty.

    The real reason is that FCC presumably gets 4/7ths of the Brighton to London revenue and Southern wanted to increase their share to 4/8ths.

    I just wish they were as entrepreneurial on London – Redhill, Horsham, Littlehampton, Ore, Portsmouth Services.

    It is also time the Gatwick Express to be removed – it takes up too many train paths for too few passengers – it’s not viable in the whole context of Victoria approaches. Best choice here would be for Southern to combine it with the Brighton Express and to keep a train in the platform split it at Gatwick with 6 of 12 coaches going forward.to Brighton. The two platforms being built at Gatwick now would be ideal for this.

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  • Dave Holladay

    Gatwick Express should (potentially with Heathrow Services for air travellers) be re-routed in to Waterloo International. Removal of trains loading and discharging passengers dragging luggage around in the melee of commuters at Victoria & Paddington, often from the same platforms is not a happy mix, and for the same reason that the railway has fast, slow, and goods lines to deal with different types of train to maximise capacity when the volume of traffic rises, so it is appropriate to have stations segregated to handle the different types of passenger. Waterloo International is a well laid out station for air travellers, and its use in this way will also provide the reserve terminus for long distance services for Paddington, and Euston should these have a major closure, and it delivers closer to both Westminster and The City, with a longer term potential to connect through to Blackfriars for Luton Airport, and Farringdon for Stansted (albeit using the Crossrail services).

  • lisaoutthere

    There’s an awful lot of negative commentary about Southern and First Capital on Facebook and Twitter and I’m surprised they ignore it, that’s no way to win loyal customers. There might even be some good ideas there people!

    Having said that, First Capital could win a few more loyal customers if it followed some basics, heating that works and clean trains amongst them.

    As for fast trains, please First Capital Connect, wake up on this score. My peak time trips to and from central London take 90 minutes each way… because your 60 min fast trains are all between 9am and 4.30pm. Not very helpful to business commuters, who probably keep your service afloat.

  • RapidAssistant

    It’s true lisaoutthere that there is a lot of negative commentary about certain TOCs – the problem is that “railway bashing” has been a bloodsport of the national media for as long as we can all remember – people therefore expect bad press about trains so much that a lot of the key issues that are worth debating get lost in the “noise”, and that the good news never gets reported.

  • The problem as we see it is that there is a dual franchise on the Brighton Mainline which pits Southern and First Capital Connect against each other, but gives neither any great incentive to improve their services elsewhere – in Southern’s case off the BML, and in FCC’s north of the Thames.

    FCC already runs 4 trains an hour between London and Brighton. For Southern, running this extra service would put them on an equal footing (4 trains instead of the current 3), and give them a greater share not just of the London – Brighton revenue, but also London – Gatwick, Brighton – Croydon, Brighton Gatwick and Croydon – Gatwick.

    Running 8 trains an hour to Brighton seems a nonsense when Eastbourne and Worthing (the Coastway service) only get 2 combined [which divide/attach at Haywards Heath].

    And because the Southern trains to/from Brighton miss out most of the intermediate stations, the Coastway service (which is the only off-peak train between Haywards Heath and Victoria for example) has to take the strain of many of the mainline stations too, as well as forming part of an alternative cut-price service to the Gatwick Express between the airport and London.

    Result: the Brighton services (both Southern and FCC) sail most of the way up the line half-empty (all the way to Gatwick or even East Croydon) while the Coastway service is packed to the gunwales.

    The East Sussex Rail Alliance is also unhappy at the amount of time added to the journey by dividing/attaching at Haywards Heath (10 minutes or more when taking account time spent standing in the station and timetable-padding through Keymer Junction).

    Ultimately the solution is a more equitable division of paths on the BML, possibly under a single franchise. In addition to the current half-hourly fast service to Brighton, ESRA would like to see Eastbourne and Littlehampton have separate half-hourly services to Victoria. This would provide sufficient capacity for southern BML stations i.e. Haywards Heath, Wivelsfield, Burgess Hill etc.

    The 4 FCC paths each hour are under-utilised, many of these trains are only 4 cars long,(they can only a maximum of 8 currently) In the longer term it may make more sense to reallocate 2 paths per hour to run additional Brighton – Victoria services.

    Likewise if Southern needs to provide additional capacity to Brighton in the off-peak it should lengthen the currenty half-hourly fast service to 12 cars, rather than the mostly 8 at present.

  • Ian

    Has anyone any comment on T33’s comments re this?:

    “The real reason is that FCC presumably gets 4/7ths of the Brighton to London revenue and Southern wanted to increase their share to 4/8ths.”

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