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


Memorandum by the Rail Passengers Council (RI 03)

INTRODUCTION

  The Rail Passengers Council (formerly known as the Central Rail Users Consultative Committee (CRUCC)), as the statutory consumer organisation representing the interests of rail passengers, welcomes the opportunity to submit views on behalf of the RPC network on this topic. The Council invited submissions from the regional Rail Passengers Committees (formerly the Rail Users Consultative Committees (RUCCs)), the London Regional Passengers Committee and from its own independent members.

  The Rail Passengers Council's thanks are due to the RPC Southern England for producing the main body of this response on behalf of the RPC network.

Q1.  RAILTRACK'S PAST PERFORMANCE IN RENEWING, MAINTAINING AND DEVELOPING THE NATIONAL RAIL NETWORK, AND THE LIKELY IMPACT OF ITS PLANS FOR THE FUTURE

  The Council remembers only too vividly the stop-start nature of investment on the rail system by British Rail and the so-called "maintenance holidays" introduced to eke out inadequate budgets and yet still keep services running. Nevertheless, the network both locally and nationally has openly criticised aspects of Railtrack's stewardship of the national rail infrastructure.

(a)   Vague Details

  Early versions of the Network Management Statement did contain plans but these were vague and omitted timescales.

(b)   Risk Averse

  As a low risk operation, underwritten by the Government and with its future assured, it is lacking in vision. A common accusation is that Railtrack has adopted an "if it ain't broke, don't fix it . . ." approach rather than investing in imaginative, innovative schemes.

(c)   Extending Asset Life

  Too often there is a lack of vision shown in some investment decisions where investment has been based on life-expiry of assets rather than other considerations, eg signalling schemes, where decisions appear to be based on maximising the lifespan of equipment, rather than considering the operating and capacity advantages engendered by replacing them with a more flexible system earlier. The Booz Allen report, commissioned by the Rail Regulator, shared this view. Indeed, it was particularly critical of the way in which major resignalling schemes detailed in the 1997 and 1998 NMSs had been deferred in the 1999 NMS or had been dropped altogether.

(d)   Deteriorating Track Quality

  The Booz Allen report also noted a decline in track quality in 1995-96 and an increase in broken rails in 1998-99; the south of the country seemed particularly badly hit. There are considerable safety implications—indeed the HSE was so concerned over the condition of the track through the Severn Tunnel that it imposed emergency speed restrictions.

(e)   Lack of co-ordination of Station Regeneration Programme with other Improvement Work

  Many Committees have expressed concern that the Station Regeneration Programme (SRP) limits itself to basic repairs and simply returning the fabric of stations to their previous state; it ignores the opportunity to enhance facilities. At Bournemouth station, for instance, despite some £7 million of investment on repairing the roof and building, there is little in the way of enhancement for passengers (eg new waiting rooms, better toilets, passenger lifts). Equally, there have been complaints from train companies that Railtrack has been poor in co-ordinating station work with that planned by the TOC itself, the end result being a lost opportunity to undertake both works together. It must be said, however, that there have been improvements in SRP work and in co-ordination in recent times.

(f)   Poor Management of Contractors

  A number of recent prosecutions of contractors compromising rail safety has led to concern in the RPC network that low cost rather than quality of work may play an excessive role in Railtrack's calculations. A further untoward consequence of reliance on contractors is the amount of building material left on the lineside in preparation for engineering work, often unreasonably long in advance; similarly, the amount of redundant material which remains uncleared when work is finished is a cause for concern. Presumably Railtrack pays its contractors to remove redundant items; if left on linesides, such materials not only look unsightly but may tempt trespassers and vandals onto railway property, either to remove these items for their own personal gain or to place them on the track.

(g)   Poor Clearance of Encroaching Vegetation

  The amount of weeds on trackbeds and platforms gives much of the network a very dilapidated appearance.

(h)   Graffiti

  Poor record in clearing this.

  However, it must be acknowledged that Railtrack has made improvements in some areas:

(a)   Delays

  Even though performance is still below the level stipulated by the Rail Regulator, it must be acknowledged that Railtrack has systematically reduced its share of train delays.

(b)   Investment

  It has increased its level of investment in successive NMS documents.

(c)   Action Plans

  Railtrack does now have action plans to tackle track quality and capacity issues which itself points to the development of a much more focussed and longer-term view of the industry than hitherto displayed.

  That said, the NMS is very much a shopping list of projects which need to be undertaken. It has been made clear that Railtrack is reluctant to put up all the funding which will be needed to achieve it, unless the company's investment is bolstered by finance from elsewhere.

Q2.  THE ADEQUACY OF THE OVERSIGHT EXERCISED BY ORR OF RAILTRACK'S PERFORMANCE, ITS CONTRIBUTIONS TO THE DEVELOPMENT OF RAILTRACK'S FUTURE PLANS WITH PARTICULAR REFERENCE TO THE REVIEW OF TRACK ACCESS CHARGES, AND THE MEANS BY WHICH ORR INTENDS TO ENSURE THAT RAILTRACK HONOURS ITS COMMITMENTS

  At the point of privatisation Railtrack had to operate within the terms of its licence as set by the Rail Regulator. This focussed on the broad obligations required to " . . . satisfy the reasonable requirements of persons providing services for the carriage of passengers or goods by railway and funders . . ." [Licence condition 7]. The Regulator also set the track access charges through which Railtrack receives the bulk of its revenue. This certainly gave the Regulator control/influence over Railtrack's overall spending but initially it was very questionable whether the level of control was such that the Regulator could both specify and enforce actual priorities.

  Past Regulators have been critical about Railtrack's level of spending. The then Regulator found that the level of underspend in December 1996 was wholly unacceptable, leading to his publication of Objectives for Railtrack in January 1997. This criticised Railtrack, calling its record in terms of its stewardship responsibilities, "disappointing in important aspects". The Regulator placed an obligation on Railtrack to deliver an effective infrastructure renewal and investment programme which followed four regulatory principles:

    —  Railtrack should in a timely fashion renew the railway infrastructure in the appropriate modern equivalent form;

    —  Railtrack should take a proactive and positive approach to the development of the railway network;

    —  Railtrack should make good the current shortfall in expenditure; and

    —  Railtrack's plans and processes should ensure delivery of these objectives.

  This could certainly be taken as evidence of ORR attempting to intervene and shape Railtrack's investment decisions, even if only at a very broad, general level. However, success was still limited. While the Regulator could force Railtrack to produce an NMS there does not seem to be any mechanism enabling him to take action if Railtrack failed to deliver on its plans.

  Hence, in September 1997 the Regulator attempted to strengthen his power through modifying Railtrack's Network licence. This intended to make Railtrack more accountable for the stewardship of the network and gave the Regulator more powers to enforce action. To some extent this recognised that there was insufficient control in the past.

  Evidence of the use of this power could be seen following the 1998 NMS. The Regulator (along with the then CRUCC and RUCCs) was concerned about the level of commitment contained within the document. While the Regulator did not consider that Railtrack was in breach of its licence obligations, he concluded that, unless Railtrack took certain action, it was likely to contravene the requirements of Section 7 of its licence. Accordingly a number of specific commitments was agreed, including:

    —  reduce the number of delays attributable to Railtrack by 7.5 per cent (for the year to 31 March 1999) and publish revised targets for 2000-01;

    —  plans for dealing with capacity bottlenecks. Studies on congestion problems to be completed by 30 November 1998; and

    —  quantifiable plans for improving the quality of track.

  The present Rail Regulator has taken a much more forceful approach to regulation. He has set specific targets to reduce delays (with associated penalties) and taken a tough stance in the access charge review.

  In conclusion it could be argued that OOR has tried to ensure that Railtrack has the right priorities for investment, initially through blunt licence conditions and general obligations (which appeared to have limited success), but latterly through specific quantifiable agreements. The robust stance of the current Rail Regulator is a positive contribution and is welcomed.

is a positive contribution and is welcomed.

Q3.  WHAT ROLE SHOULD BE PLAYED BY THE SSRA IN THE RENEWAL, MAINTENANCE AND DEVELOPMENT OF THE RAIL NETWORK BOTH DIRECTLY AND BY SECURING INVESTMENT FROM SOURCES OTHER THAN RAILTRACK, INCLUDING FROM TOCS THROUGH THE FRANCHISE REPLACEMENT PROCESS? IN ADDITION, THE SUB-COMMITTEE WILL CONSIDER WHAT CRITERIA THE AUTHORITY IS USING TO DECIDE ON THE REPLACEMENT OF FRANCHISES

  The sSRA has a key role in the development of the rail network both in terms of its role as "paymaster" of subsidies and its strategic input to investment decisions. Roles include:

FRANCHISING

(i)   Establishing criteria for each bid

  Any organisation that sets the criteria for franchise bids wields enormous influence over the rail network. For instance:

    —  Setting the PSR can be of immense importance to the development of rural communities where such things as the number of fast commuter services to London do have a tangible impact.

    —  Setting out the key investment issues which bids must address can directly influence the development and to a lesser extent the maintenance of the network. For instance, it can be made clear to bidders that bids must include plans, for example, to electrify a specific route, or increase capacity (eg at passenger-saturated termini), or order new trains, or build new stations—these will have a direct impact on the development of the network. It is harder to specify particular track maintenance requirements as these are traditionally the domain of Railtrack rather than the franchisee but this approach could be developed with station maintenance. The RPC network has been particularly active in this area over the last year, drawing up franchise templates against which bids can be evaluated.

(ii)   Negotiating Franchises

  Competitive bidding gives the sSRA the opportunity of "squeezing" more commitments from the bidders. The RPC network warned during the first round of franchising that seven-year franchises were too short to expect companies to invest at the sort of level necessary to bring about the improvements which the railways need. To influence the current franchising process, the RPC network has issued a number of consultation documents to safeguard passenger's interests in the process. We have been impressed with the breadth of vision coming forward from the first bidders for renewed franchises in the absence of specific requirements from the sSRA.

(iii)   Establishing national priorities

  Given that resources are finite there is a clear role for sSRA in establishing a coherent, national view of Britain's railway. Decisions on areas such as increasing capacity have an obvious impact on the development of the network and competing demands. The sSRA has a role in co-ordinating the activities of franchises and ensuring commonality of goals across regions.

FUNDING

(i)   Subsidy

  The sSRA controls subsidy payments to TOCs, and performance regimes, the combination of which must give it a significant influence over a TOC's spending plans. There have been calls for subsidy to be paid direct to Railtrack rather than funnelled via the TOCs. Any upset to the current arrangements would seriously weaken the operator's ability to put pressure on its supplier (eg Railtrack). The Council would not support any amendment to this arrangement which might weaken the train operator's hand.

  The sSRA also has an opportunity to lobby the Government/Treasury for higher subsidy/investment levels.

(ii)   Partnership funding

  The sSRA controls the RPP fund. This provides a direct opportunity to develop the network.

(iii)   Local authorities

  Local authorities do have some money available for public transport issues—and if road pricing/congestion charging is introduced this may increase. While it is unlikely that most local authorities will fund train services in the same way that they secure local bus services, there are various examples of very welcome investment, eg:

    —  pump priming investment for additional services;

    —  provision of bus and rail information;

    —  improved access for those with disabilities; and

    —  better co-ordination of and publicity for bus routes serving railway stations.

  There is a role for the sSRA in brokering deals between TOCs/Railtrack and local authorities.

FRANCHISE MONITORING PERFORMANCE

  The monitoring and enforcement regime can also impact on the development of the network. For example, one of the RPC Network's concerns at the moment is the unacceptable level of short-formations (ie running trains conveying fewer carriages than planned). We feel that this situation is a result of the combination of increased passenger demand, the unreliability of ageing rolling stock coupled with underinvestment in maintenance, hindered by an inadequate fleet of rolling stock to match supply with demand, thus failing to cope with unforeseen operating contingencies. A TOC faces a fine for each instance of short-formation; concern has been expressed that where the penalty may be less than the cost of hiring additional rolling stock to rectify the shortfall, it has proved a less than robust deterrent. The RPC network has drawn this to the attention of the sSRA on numerous occasions.

  The Council is seeking to reach an amicable agreement with Railtrack and the Association of Train Operating Companies concerning the provision of causation data following the Regulator's determination in our favour. We hope that this will preclude the necessity for the Strategic Rail Authority (who have assumed the role of consumer protection from ORR) to take enforcement action.

  The nature of franchising means that the sSRA will have more influence on TOCs than on Railtrack. However, one area in which it can "influence" Railtrack is in the publication of delay causation data. Currently details on punctuality and reliability are recorded on a TOC-by-TOC basis and omit the cause of the delay. If sSRA were to publish the delays on a TOC, TOC-on-TOC and Railtrack basis then passengers and the RPC network could help keep the pressure on the relevant organisations for improvements. We are currently again seeking access to the causation data, without which it is impossible to monitor services on behalf of passengers accurately.

  It is essential that the sSRA truly champion rail and take the opportunity to lobby government.

June 2000/Revised March 2001


 
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