Rail 709: franchising crisis affects whole railway

The crisis in franchising is not just a local matter affecting the West Coast. The whole industry is in a state of paralysis that is already having an effect on investment plans and creating uncertainty in the industry.

This was brought home to me when I spoke at a meeting organised by Suffolk County Council on the future of rail in the region. This was an excellent initiative which had been planned before the franchising fiasco but despite the hiatus Guy McGregor, the council cabinet member in charge of transport, decided to proceed with the meeting anyway to highlight the issues. The local MP, Ben Gummer, son of John, despite looking like he was on a half term break from public school, gave an excellent introduction showing both knowledge of the railways and expressing a wider vision for the area.

East Anglia, he said, could become the California of Europe. With the country’s largest research centre, Cambridge, its biggest port, Felixstowe and its proximity to the largest financial centre in the world (that’ll be London), it needs a better transport system and rail is a vital part of that. He pointed out that a good start would be to bring down the timings between Ipswich and London to under an hour, as they had been in the 1950s rather than the 67 minutes that is the best timing achieved today.

Gummer and McGregor were not expressing outlandish demands of a high speed line for London – Norwich or massive reopenings of lines from nowhere much to somewhere even smaller. The council in fact has gone about campaigning for better rail facilities diligently and effectively. It sponsored, along with other local councils as well as businesses, the production of a pamphlet, Once in a generation – a rail prospectus for East Anglia to put the case to government.

It is aptly titled. This really is a momentous time with the preparation of Network Rail’s investment programme coinciding with the renewal of most of the major franchises. Greater Anglia is currently in the middle of its crazy 17month deal, won by Abellio – for whom, interestingly, almost everyone at the meeting was singing their praises and the franchise is scheduled to be relet next July. Ben Gummer said he was assured by Patrick McLoughlin that the timetable for Greater Anglia will not be upset by the West Coast debacle but how on earth would the Transport Secretary know. There are far more unknown unknowns than known unknowns, and given the damning initial findings of the inquiry by Sam Laidlaw into what went wrong, it seems highly likely there will have to be a major reorganisation of the way the department works.

Anyway, back to East Anglia. The excellent pamphlet sets out in some detail the projects that would help the railways in the region to thrive. It sets out a dozen or so short term priorities and analyses these in relation to the cost. Some are happening already or likely to go ahead. Improving junctions at Bow and Ely, for example, would greatly increase capacity for not very much cost. According to the report, the East of England Development Agency reckoned that improvement to the Great Eastern Mainline would deliver benefits of £3.7bn annually – though I must admit I am rather cynical about these type of calculations.

Rather imaginatively, the wish list includes the Gospel Oak -Barking electrification, the subject of a dispute over funding between Transport for London and the Department for Transport, seen as vital to create freight access to the London Gateway, has, I understand, got funds earmarked during the next Network Rail Control Period (the 2014/9 investment plan).

The key demand over improving the service for passengers on the main line, however, is new rolling stock. One of the speakers, Ian Walmsley of Porterbrook gave a fascinating presentation on how to improve the rolling stock while avoiding spending billions. He suggests getting the wonderful Mk 3 carriages on which I travelled up to Ipswich refurbished by a Chinese company – which would be cheaper than using European manufacturers – and then to haul them with new Bombardier Traxx locomotives. The interiors would be completely redesigned to modern standards. It was a brilliant presentation, the sort of lateral thinking that the railways need in these times of austerity and McNulty strictures.

It goes to show there are genuine ways of saving money in investment projects. It all sounds too sensible and will probably never happen. Inevitably the Department isn’t very interested, despite the success of the refurbished Mk 3 stock being used on the Chiltern. The civil servants and their political masters are obsessed with big projects and shiny new trains, like the crazy IEP madness. Refurbishing 30 year old carriages is just not sexy. This sort of thing is yet another reason why we desperately need a rail agency to emerge out of the changes that will invariably result from the reviews of the West Coast franchise fiasco as real railway managers have always known how to muddle through effectively.

 

 

Laidlaw lays the system bare

 

I must say Tim O’Toole, a man for whom I have enormous respect, and who is now boss of FirstGroup, made a pretty feeble attempt to justify the present structure in his George Bradshaw address at the Institution of Civil Engineers on October 31. His theme was that the railway has always been a complex business and that we should not shy away from the complexity that has been added as a result of privatisation. Quite the opposite. He said we should embrace it because it led to entrepreneurial drive and innovation. And he used that hoary old canard that the railways had delivered unprecedented growth since privatisation.

It is true of course that the railways have grown massively since privatisation but there seems little causal relationship between the two – what have the private companies done so brilliantly that people are flocking to the trains. I heard a very good partial explanation at the Railfuture conference I chaired in Birmingham on November 3, Richard Harper, the head of Development at Chiltern said he suspected that one reason for the growth was down to PPG13 – a planning directive sent out 20 years ago – which encouraged development on brownfield sites. He said ‘these are precisely the kind of sites near railway stations which used to serve the industries which built up on them in the first place’. Now the housing which has sprung up on them is full of the type of workers who will commute on the railways nearby. And jobs growth has tended to focus on central areas easily accessible by train.

To get back to complexity – O’Toole completely failed to mention the downsides, the cost of managing the interfaces between the various players created by this complexity. I was reminded of this by a senior rail manager who wrote to me explaining the workings of the delay attribution system which involves a staff of at least 20 people at Network Rail alone, and two or three times that number at the train operators. This is just one example from a long list involving consultants, lawyers, accountants and duplication of processes with which Rail readers will be familiar.

Of course, O’Toole was rather unlucky. He was chosen to give the lecture long before the collapse of the West Coast deal and the subsequent Franchise Fiasco – I think it is worth its own acronym and how appropriate that it should be two Fs. This made him rather constrained in what he could say especially given his own personal involvement. But he did make a point about risk that was very pertinent. Essentially, he said that unless the private sector was allowed to fail at times there would be a real cost to the public purse since companies would not make such adventurous bids. That led to an interesting question from Nigel Harris who asked it O’Toole felt that bids ought to be allowed to fail and that should not be regarded as a failure of the system.

Broadly O’Toole agreed with that proposition and here I take issue – not for the first time – with my esteemed editor. I remember in fact that this was a point that Douglas Alexander made to me when he was Transport Secretary, arguing that failure was all part of the system. At the time I wrote that I disagreed with that notion and I remain firmly of that view. The railways are not some kind of cowboy industry where shady operators come and go like tenants doing a moonlight flit. Rather, the railway industry is long term mature business with generally fairly stable patterns of demand. It is capital intensive which is why there was the ill-fated attempt to introduce longer franchises which is what caused the FF. Therefore stability is the key and the last thing the railways need is the chaos caused by high profile failures.

Every time an operator gets into difficulties or throws the towel in, there is uncertainty and, inevitably, extra cost since emergency arrangements have to be made and the bidding process has to be restarted, a new management team found and then the whole costly rebranding exercise with inevitable changes to the ‘product’ which leaves passengers confused. I’m afraid that I take the rather dull view that the railways need neither complexity nor failure.

 

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