Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of Witnesses (Questions 413 - 419)




  413. Gentlemen, I apologise for keeping you waiting. Thank you for coming this afternoon. Would you be kind enough to identify yourselves?
  (Mr Brown) Yes, Madam Chairman. I am Richard Brown. I have just taken over as Chairman of the Association of Train Operators. I am also Commercial Director of the National Express group. On my right is George Muir who is Director General of the Association, and on my left is Keith Ludeman, who is Chief Executive of Rail for the Go Ahead group.

  414. Did you want to say anything in general, Mr Brown?
  (Mr Brown) Just very briefly. First of all, thank you for this further opportunity to give evidence to your inquiry into rail investment. I guess it is important to remind ourselves that an awful lot of has happened since we last attended. The 10 year transport plan we have warmly welcomed. We do believe it provides a good foundation for going forward and there are a number of very specific commitments in it backing the vision which has been portrayed before. We have also had the Rail Regulator's final conclusions on his track access charging review, which followed very extensive and open consultation with the industry, which we also believe represents very substantial progress, although we do have a small number of areas of continuing concern, which are well known to the Regulator, that you might wish to question us on. We also now have the re-franchising process under way. We asked for longer franchises to provide the basis for sustained investment in the industry, so we welcome the fact that the strategic Rail Authority on behalf of the Government is driving this forward. Two, of course, have now been let to the preferred bidder, Chiltern and South Central, the latter to Keith Ludeman's company. We also welcome the flexibility being shown by the SRA in looking at other than straight replacement franchises like the two year extension to the Midland Mainline in exchange for a very substantial package of investment there. Of course, we have had the further tragic accident at Hatfield, which no doubt you will wish to ask us questions on as well. We are open to all of your questions.

  415. What are you really saying? Are you saying that the Regulator's review of access charges is a good balance between Railtrack and the train operating companies, or is not?
  (Mr Brown) We are saying in general terms, yes, it is a good balance, Madam Chairman. There are some areas of concern which we have.

  416. Which are?
  (Mr Brown) The area of concern, if I can ask George Muir to speak about the detail of that?
  (Mr Muir) Within the incentives the principal advantage is an alignment of incentives, but there is some concern that the penalties, or at least the incentive or bonus for punctuality, which has in essence been doubled from an average of £30 a minute to £60 a minute, is going to super-charge or very highly pressurise our decisions relating to performance. There is a second issue.

  417. Before we leave that, Mr Muir, you are really saying that it is too much to expect the train operating companies to run their trains on time?
  (Mr Muir) No, certainly not. There are many incentives already on train operators to perform punctually. We have ample incentive to perform punctually. What we are short of are other things like reliable trains and reliable systems. We are not short of incentives.

  418. Whose responsibility is it that you are short of reliable trains, yours or anybody else's?
  (Mr Muir) To a substantial extent ourselves and the trains which we inherited.

  419. But the trains you undertook to run when you took on the franchise. So it was not exactly a surprise to you, was it?
  (Mr Muir) No, it certainly was not.

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