Rail 620: Virgin spat with Network Rail bad for the railways

The bosses at Virgin trains are angry. No, correct that, they are incandescent. They have had enough of Network Rail and are prepared to go public on it in what looks to be a prolonged and very public argument.

I rather lit the blue touchpaper when I bumped into Tony Collins and Chris Gibb, the top two at Virgin, at a Stagecoach event in late May and suggested that the press release they had sent out the previous day criticising Network Rail was rather intemperate. Its statement had been prompted by one from Network Rail which had claimed ‘Train punctuality reaches an all time high’.

There was, indeed, much to question in the release. It suggested that the level of punctuality was a feat unparalleled in history and that records had begun only 20 years ago as previously they were not ‘credible’. Indeed, while BR days data was collected in a different way, to suggest it was worthless was a typical bit of rewriting history. Network Rail’s PR man, Kevin Groves, actually admitted this in an email to a reader, Graeme Bell, who complained about it, saying ‘The use of the word ‘credible’ is however debatable of that , I will concede.’

But it was the next bit that got up the goat of our Virgin friends. The press release went on to quote Robyn Gisby, the operations director as saying: ‘Passengers are today experiencing the most punctual train service ever provided on Britain’s railways’ which is a completely unprovable statement especially as timetables have been adjusted over the years to make it easier for trains to be on time. This kind of stuff is all part of Network Rail’s rather unseemly self-aggrandisement campaign. The tone of its press releases has definitely been more aggressive in recent months, which is counterproductive since it leads to mistrust. And for Virgin’s passengers the West Coast Main Line, this heartening news does not ring true.

Indeed, when they saw the press release, Virgin bosses could no longer restrain themselves: ‘We had not planned to respond or issue anything’ Chris Gibb told me, ‘but our passengers have a right to know what is going on. They are getting delayed all the time by Network Rail’s failings and if they saw that release, they would be wondering what on earth is going on. We owed it to them to do something.’ So Virgin’s went on the warpath with a release that did not hold back: ‘After £9bn was spent on the West Coast Mainline, customers have every right to expect performance to be at least as good as the rest of the country. That has not happened and sadly it proves that many of our past concerns about Network Rail were correct.’

Virgin has a point. £9bn is a lot to spend on a railway that is not working properly. Chris Gibb says that out of any four week cycle, 23 days are probably ok when there is a reasonable performance. But on the other five, it is likely to be disastrous: ‘One day its axle counters, another it’s the overhead line equipment, and so on. I just want them provide a proper service 28 days out of 28, not 23. How come they have spent £9bn to create Britain’s worst performing railway?’

Virgin has lost faith in Network Rail’s ability to produce a reliable railway on the West Coast. There is a recovery plan being produced but Gibb has seen it all before: ‘The only difference between the remedial plan they are putting forward now and the one that they discussed 18 months ago is that the dates have changed’.

Nor does it seem that the Office of Rail Regulation is on the case. I went to its recent press conference on the latest performance figures and its annual report and it was not a salutary experience. Indeed, a BBC reporter told me that she had been warned not to bother turning up because there was no story there and certainly the attitude of ORR seems to be to pussyfoot around Network Rail. Yes, said Bill Emery, the chief executive (who is on a salary of around £165,000), we know about the problems on the West Coast, we have been in constant contact with Network Rail and the issue of whether we will be taking remedial action will be discussed at our next board meeting. It was all very process driven and lackadaisical, and of course ultimately ORR is toothless because it all it can do is fine Network Rail, a futile gesture since it is moving public money around, as it does not even have direct power to intervene over the bonus levels of its top managers.

While Virgin’s bosses are somewhat heartened by the fact that there have been various changes in personnel on the Network Rail side with ‘enthusiastic new staff coming in’, Gibb and Collins remain sceptical of the managerial structure. They deal with the route director, a relatively new appointment, Jo Kaye, and with Robin Gisby, the operations director but responsibility for many of the problems lies with the infrastructure director Peter Henderson and the guy in charge of major projects Simon Kirby. As Gibb puts it, ‘when a decision has to be taken about an overrun on Monday morning, it is often not Robin Gisby who makes the decision but the engineering people who obviously are more interested in keeping costs down’. Indeed, that was why when Network Rail was created out of the ashes of Railtrack, I was critical of their choice of slogan which was ‘engineering excellence for Britain’s railway’. As I said at the time, passengers want trains to run on time, not ‘engineering excellence’ and it is noticeable that Network Rail has dropped the slogan.

What angers Virgin the most is that trying to ensure that today’s passengers have a reasonable service railway is taking up all the time of its senior managers. Gibb moans: ‘I would like to be developing ideas for offering new services, thinking of ways of connecting with Heathrow or with the existing High Speed One but instead I have my hands full having to deal with the day to day railway, which leaves no time for planning for the future’. Moreover, it is obviously having a big effect on revenue, some of which is compensated through the penalty payments system but that does not take into account the wider impact: ‘We can’t advertise Scottish services, for example, because we are still due for another 20 weekend closures on the northern sections of the line. We would like to be competing with the airlines but we can’t with that sort of service’.

All of this is bad for the railway. It is impossible to resist reiterating my frequently made point that the only way to run a railway is through an integrated system where the management of both operations and infrastructure sit on the same board. The European Union is increasingly making this difficult, though there are always ways round those rules and at one point the Tories seemed genuinely prepared to challenge them, but they have retreated from that position since the departure of Chris Grayling as shadow transport secretary.

Virgin say they do not want to challenge the structure of the industry but will soon be bending the ear of the new transport secretary, Lord Adonis, to sort out Network Rail. It will be an interesting early test for him.

The transport secretary we have always wanted

It is a bit too good to be true, but we finally have a transport secretary who knows about, understands and likes trains. The ghastly Geoff Hoon, a politician who oozed smugness and lack of interest, barely left a mark on the railways because, thankfully, his number two, Lord Adonis, who has now been promoted,

It is rare that I praise a politician unequivocally in this column but Lord Adonis’s record during his short period at the Department for Transport has earned him widespread plaudits. Lord Adonis’s moniker is rather misleading. He is no upper class public school product but the son of a Camden waiter of Greek origin who grew up partly in care after his mother walked out and has worked his way up thanks to a formidable brain. He was head of Tony Blair’s in house think tank for a while and then fancied trying his hand at running things, rather than just producing policy papers so was elevated to the Lords.

He is that rare bird among ministers, able both to do detail – witness his spat with Stagecoach over ticket office opening hours on South West Trains – and strategy, as seen in his promotion of investment in the railways for both electrification and high speed line. He also, cleverly, got Swindon – Kemble redoubling back on the agenda through a judicious ministerial visit. He is, too, a good listener and is ready to go out to find out things for himself such as when just after Easter he spent five days going round the rail network by train with a Rover ticket.

Of course, in a way it is too good to be true since his tenure at the Secretary of State is limited, at best, to a year and probably less than that. So little time and so much to do. There’s no shortage of issues, with the SouthCentral franchise bids and the National Express East Coast demands for renegotiation already weighing down his in tray and a host of other medium term issues such as Network Rail governance, increasing anger about the fares structure, Crossrail, delays over rolling stock orders and, of course, the impact of the recession just to name a few, as well as all the other transport issues. Will he, for example, use his position to reopen the debate over the third runway at Heathrow?

He will try to leave as powerful an impact as possible. There is no doubt that the next few months will be a busy one for the Department’s civil servants who have already found it difficult to get rid of him on Fridays because he has no constituency duties, along ministers who are MPs.

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