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


Memorandum by the Institute of Logistics and Transport (RI 19)

1.  INTRODUCTION

  1.1  The Institute of Logistics and Transport is the UK's professional body for the transport industry, with some 23,000 members. The Institute welcomes the opportunity to give evidence to the Committee in their inquiry.

  1.2  The Institute offers its observations in accordance with the subheadings set out in the Committee's notice.

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

  2.1   The longevity of railway infrastructure assets has always caused problems in definitions; for instance, with plain track renewals, the rails might be expected to last for 25 years and concrete sleepers for 50. This puts some premium on ensuring that the track support systems and drainage are renewed, or at least given special attention, simultaneously. It is also a good opportunity to renew any cabling required. Generally, points and crossings will last for a lesser time, because of the wear and tear which they experience.

  2.2  Whenever maintenance renewals fall due, every attempt should be made to upgrade the facility being replaced. By this method, the East Coast Main Line has been modernised progressively over many years, whereas the West Coast was allowed to languish. Before any significant renewals take place, all parties involved should be consulted to ensure that a rational investment in modern facilities is provided.

  2.3  Over such lengthy periods, technology may well advance, and business needs may change. Maintenance becomes renewal or investment, especially if specifications are upgraded. A section of line designed for 75 mph running may be upgraded for 90 mph operations and this might mean, for instance, easing some curvature and rebuilding a series of overbridges. Signals will need to be repositioned and protection systems upgraded. It may also be an opportunity to strengthen substructures to accommodate higher axle loads.

  2.4  The Institute would draw two conclusions:

    —  Measurement of what Railtrack are actually achieving, solely in terms of asset health, is not a simple calculation.

    —  The time scales of achievement, or non-achievement, may be elongated.

  2.5  This impacts directly upon future network needs. If a major expansion of capacity is required, to the extent that junctions have to be remodelled in their entirety, two tracks need to become four, and land has to be acquired, there are a number of hurdles. Not the least of these is the time for local consultation. There is also likely to be a need to secure authorisation under the Transport & Works Act 1992, and the uncertain timescale with which this is associated.

  2.6  Rail is the backbone of an integrated transport system; to that extent, future investment programmes need to consider the wider context of other transport modes. There are opportunities to improve the integration with bus, tram, metro etc, and for pursuing park-and-ride or kiss-and-ride schemes. There are further opportunities in respect of closer relationships with land use planners and developers.

  2.7  When major works are contemplated, there is considerable advantage in undertaking as much other work as is needed at the same time. This will minimise the service disruption which takes place, and benefits passenger and freight customers, and the industry, alike.

3.  THE ADEQUACY OF THE OVERSIGHT EXERCISED IN THE PAST BY THE OFFICE OF THE RAIL REGULATOR OF RAILTRACK'S PERFORMANCE, ITS CONTRIBUTION TO THE DEVELOPMENT OF RAILTRACK'S FUTURE PLANS WITH PARTICULAR REFERENCE TO THE REVIEW OF TRACK ACCESS CHARGES, AND THE MEANS BY WHICH THE OFFICE OF THE RAIL REGULATOR INTENDS TO ENSURE THAT RAILTRACK HONOURS ITS COMMITMENTS

  3.1  The National Audit Office report concludes that there are shortcomings in the way in which the Office of the Rail Regulator has monitored Railtrack's performance. The circumstances under which the arrangement was set up were somewhat different from those pertaining today, and substantial changes are proposed in the present Transport Bill to overcome perceived problems.

  3.2  The National Audit Office report on Railtrack concentrates on the spending by the Company on maintenance and renewal. However, spending is one thing, but its effectiveness is another. Good maintenance requires the right amount of appropriate attention being given to the right asset at the right time, to keep it in full working order. It follows that maintenance carried out solely on a time basis (for example) may be giving unnecessary attention to some assets and not enough to others. This results in the failure, for instance, of point motors. If these are in a key position, such as at a diverging main line junction, the effects on rail traffic are likely to be far more disruptive than if they give access to rolling stock stabling sidings.

  3.3.  The Institute would support a move which prioritised maintenance towards areas where high performance brings the most rewards for the railway and its customers alike. This is not to suggest that other areas should be neglected, but that work here should be prioritised so as to get the best possible value for money.

  3.4  The above suggests that expenditure is only one criterion, and that an output measure such as the time lost by trains over a period, due to a specified range of failures, might have benefits. However, this would be applicable to maintenance needs, rather than wholesale renewals. The latter, if not carried out, are likely to lead to a long term deterioration of performance over a period of time.

  3.5  The Institute would also wish to address the problem of risk. In the contractual railway which we now have, the responsibility for delays to train services is apportioned, and associated with a financial penalty. Thus, if a major engineering possession for asset renewal over-runs, and the railway is handed back for normal operation two hours late, the TOCs have a redress against Railtrack.

  3.6  The result is that all concerned with undertaking the work are conservative in their estimation of the time it will take, to avoid "getting it wrong". In such work, the unforeseen is always possible, and delays then ensue. Nevertheless, the odds are that all will go according to plan and the work is ready to be handed back well before the contract stipulates.

  3.7  The difficulty here is that less is accomplished than might have reasonably been possible in the time allotted. Additional work might then be the subject of an engineering possession on a separate occasion, to be associated again with replacement bus services and all the other adjustments to services needed.

  3.8  Even so, it is in everybody's interests that the number of possessions be limited, to reduce costs but also so that the railway can remain open for traffic for as many hours as possible.

  3.9  The whole area concerns the sharing and containment of risk. While a TOC is obviously concerned that the railway should be open for the Company to be able to fulfil its service obligations, there is at least a case for sharing the time-based risks which are inherent in all engineering work. This then leads into the topic of the volume of resource committed to the work (and the associated costs), the overall time taken, and how that affects the risk profile.

  3.10  The Institute would caution against a too prescriptive view being taken by the Office of the Rail Regulator on the performance measures that are appropriate in maintenance and renewal. The Institute suggests that the amount of time during which the network is (or is not) available for traffic is another valuable measure.

  3.11  The Institute understands that Railtrack is keen to bring in new contractors to provide competition for the existing experienced contractors, with a view to bringing down the cost of renewals.

  3.12  The Institute feels that Railtrack needs to ensure that they assist new contractors with a "transfer of experience".

4.  WHAT ROLE SHOULD BE PLAYED BY THE (CURRENTLY SHADOW) STRATEGIC RAIL AUTHORITY IN THE RENEWAL, MAINTENANCE AND DEVELOPMENT OF THE RAIL NETWORK BOTH DIRECTLY AND BY SECURING INVESTMENT FROM SOURCES OTHER THAN RAILTRACK, INCLUDING FROM TRAIN OPERATING COMPANIES THROUGH THE FRANCHISE REPLACEMENT PROCESS

  4.1  Train Operating Companies (TOCs) are major users of the network, and they are the principal direct beneficiaries from the network. If the maintenance of that network is defective, to the extent that limitations on its use such as speed restrictions have to be imposed, it is the TOCs and their customers who suffer. In extremis, this may mean that the TOCs are unable to fulfil franchise commitments in terms of timekeeping etc. Similar problems apply to freight companies.

  4.2  TOCs are thus potential investors in the network, for which they pay access charges to Railtrack. The lead time of projects is getting even longer, because of the number of players involved and the complexities of financing them. However, it is necessary for the TOCs to obtain a return for any moneys which they are prepared to commit. This may take a few years from the date of project completion, quite apart from the period from conception of the idea, feasibility studies, planning and design, and execution of the works.

  4.3  It follows that such schemes, if they are to be financed (or partially financed) by TOCs, are unlikely to be carried out if the franchise has only a short time left to run. While the problem can be addressed to some considerable extent by making franchise periods longer, there will always be an end date.

  4.4  The likely outcome thus appears to be substantial, if not extravagant, commitments made as part of the franchise bidding process, and much early activity if the would-be franchisee is successful. This is then followed by a long period of consolidation and minimal change, with the franchisee reaping the benefits of the work undertaken. (It is assumed that an agreement with Railtrack on future track access charges is made, to the extent that the works are financed by a TOC).

  4.5  The larger the scheme, the more problematic the arrangements become. If a TOC finances a scheme, it is not unreasonable for that company to expect to be the major beneficiary.

  4.6  The Institute sees the following problems arising:

    —  The investment scheme is likely to be in the railway itself, but while it may benefit TOC `A' it may be of little benefit at all (or even a disbenefit) to TOC `B'. Re-configuring a main line for express passenger work may act against the interests of operators of suburban services, local services and freight.

    —  Similarly, if making the best use of an upgraded line means that all trains using it need to have high performance rolling stock, this effectively excludes open access operators from competing with the incumbents.

  4.7  The extent of larger investment schemes which develop the network, in terms of providing new links where none exist presently, may be such that they cannot be completed and provide a return in anything like what up to now has been considered a suitable franchise period. This raises the question of who should plan, finance, execute and operate them, and the position of the shadow Strategic Rail Authority (sSRA).

  4.8  The National Railways system is open to all traffic. There are relatively few groups of suburban lines and a few rural lines, which are presently used only by passenger traffic. It is assumed, however, that any new line(s) which might be built will be connected to the national system.

  4.9  This requires a certain continuity of standards, most obviously on methods of operation including safety, but also on physical constraints. Britain differs from most European countries in two such respects:

    —  The structure gauge, which is far more restrictive in Britain than in continental Europe, and limits the height and width of the trains which can be allowed to pass.

    —  The incidence of high level platforms, which is a limitation on train width dimensions for nearly one metre above rail level.

  Less problematic are differences in signalling and train control systems, and types of electrification.

  4.10  These are matters which concern also Her Majesty's Railway Inspectorate (HMRI), who also need to participate in such decisions.

  4.11  The Institute feels that the sSRA/HMRI need to be involved in the setting of standards in a developing railway network, to ensure interoperability within Britain and with a view to more commonality with the rest of Europe in the longer term.

5.  IN ADDITION, THE SUB-COMMITTEE WILL CONSIDER WHAT CRITERIA THE AUTHORITY IS USING TO DECIDE ON THE REPLACEMENT OF THE FRANCHISES

  5.1  One of the few changes brought about in the initial round of franchising concerned what is now Anglia Railways, where an InterCity service was combined with local services operated formerly by Regional Railways Central. This has led to a more direct involvement between the two; many passengers, it is understood, use one to access the other.

  5.2  In the Institute's opinion, where there is substantial interchange between two disparate services of this nature, common ownership is advantageous to passengers. A similar arrangement to Anglia Railways might be considered, for instance, between the present First Great Western and Wales & West/Cardiff Railways.

  5.3  Whilst there is no overwhelming logic in the present franchise boundaries (which were established accounting units from the BR days), there is equally no reason for changing them for change's sake. Overall, they hang together remarkably well, and there is an element of inter-dependency. Creating a Wales franchise, merely because Scotland has one, is not in itself a good reason. The characteristics of North Wales, Central Wales and the Cardiff Valleys are very different, whilst any linkage between these elements has to include the line via Shrewsbury and Hereford, most of which is in England.

  5.4  Above all, the sSRA's main concern must be to ensure the integrity of the National Rail Network.

  5.5  The Institute suggests that the yardstick for establishing franchise boundaries should be what makes the most practicable group of services to be both marketed and operated.

  5.6  Another group of services, which might be managed more productively as a single unit, is those east and west of the Pennines. There is no InterCity operation over any of this corridor, though such services were provided between Newcastle and Liverpool via Huddersfield until the 1980s. This would offer a more cohesive operation; as it is, trains carrying Merseytravel livery can be seen in Wakefield, West Yorkshire, on a regular basis.

  5.7  Trans-Pennine could be a focussed franchise in its own right. This is an extensive service group, the principal routes of which are outlined below:
Blackpool

Liverpool

Chester/North Wales

Manchester

Huddersfield

Stockport

Leeds

Sheffield

York

Hull

Doncaster

Newcastle

Scarborough

Cleethorpes


  5.8  These are important cities and towns, with substantial opportunities for the development of a high quality and frequent service.

  5.9  In principle, the Institute would support moves which create geographically larger rail franchises between operators of a similar type, especially where there are service development opportunities.

  5.10  There are however services for which National Railways seem less suitable. Passenger usage from the inner London stations of the former Network SouthEast services was consistently lower than that of London Underground. It seems that the same is true in the Metropolitan conurbations, where Manchester Metrolink was reported as improving considerably on the carryings of the Bury and Altrincham heavy rail services which it replaced.

  5.11  In the six Metropolitan areas in England, and in Strathclyde, there is also the Passenger Transport Authority/Executive arrangement. These organisations have specific statutory duties to exercise, and there is much to be said for giving them the full opportunities so to do. The PTEs are not "islands" either, with significant interests up to 25 miles beyond their own boundaries.

  5.12  In a similar vein, it might be desirable not to create too firm a barrier between National Railways and London Underground services, where the latter's "sub-surface" operations are adjacent to those of the National Railway system.

  5.13  The Institute feels that franchises should be constructed in such a manner which facilitates conversion of such services to alternative forms of operation such as light rail, in places where this is presently proposed and where it is supported by local authority Local Transport Plans.

  5.14  There is also the potential conflict between the wishes of the Mayor for London and the sSRA. Railways do not respect political boundaries, and many London commuter services operate outside Greater London in part.

  5.15  In the Institute's view, the objective in setting up the new franchises should take into account the obtaining of the best service possible for all the passengers, while recognising also the wishes and needs of freight customers.

June 2000


 
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