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

Supplementary memorandum by the Shadow Strategic Rail Authority (RI 12A)

  This paper follows that submitted by the sSRA on 19 June and is designed to update the Committee on developments since the oral evidence given by the Chairman and Chief Executive on 12 July. As indicated in that paper, the role of the sSRA focuses on the three areas of Passenger, Freight and Infrastructure. These three lines of operation will be reflected organisationally through new Support, Planning and Delivery directorates. A chart is attached.


  The plan, published in July, announced a £60 billion package for the railways, about half of which will be funded by the SRA directly. It set out the targets for growth and quality which the railways must meet to deliver their part of the overall transport plan.

  The element of the plan to be funded by the SRA includes:

    —  £12 billion for support for the passenger and freight railway;

    —  £4 billion for projects including WCML (West Coast Main Line);

    —  £5 billion for CTRL (Channel Tunnel Rail Link);

    —  £7 billion for the RMF (Rail Modernisation Fund).


  On 10 August, the SSRA announced that Heads of Terms had been reached with M40 Trains on the replacement Chiltern Franchise. This has been followed by continuing negotiation, leading to the signing of a new 20-year franchise agreement later this year.

  As the first of the new replacement franchises, this gives an indication of the significant investment that is to be achieved in increased capacity and service quality through this approach.

  The Chiltern franchise has generally been well run, with relatively modern equipment, and has achieved growth of some 15 per cent pa passenger miles for five years. The replacement franchise indicates the further step change in quality and capacity which is possible and which will deliver the objectives sought in the Ten Year Plan.

  Committed investment in the franchise totals £370 million, and the key features of the first phase of the new franchise will be:

    —  50 per cent increase in train miles.

    —  15 out of 16 trains to run on time from April 2004.

    —  All trains to be new or refurbished.

    —  Restoration of double track over nine miles of line.

    —  Provision of four tracks for two miles.

    —  Two extra platforms at Marylebone.

    —  Level access at all stations within the first four years.

    —  Increased car parking at stations.

  As a second stage, the franchisee will develop plans for a new line to an M40 Parkway station and Oxford. In the longer term, it will also examine the case for an extension to an M6/M1 Parkway station, and possibly on to Leicester.

  On 24 October, the sSRA also announced that it had reached Heads of Terms with GoVia the preferred bidder for the South Central Franchise, securing total investment of almost £1.5 billion.

    —  £325 million in infrastructure.

    —  £250 million in stations and depots.

    —  £900 million in rolling stock.

  As well as creating additional train paths between London and the Sussex Coast, enhancing South London Metro services, replacing Mark I trains and electrification of the two remaining diesel routes.

  The sSRA expects by end-2001 to reach Heads of Terms with preferred bidders to replace 18 franchises due to expire by September 2004. Those include the Merseyrail and Island (Isle of Wight) franchises, for which a different form of local franchise is under discussion.

  Two franchises, central (broadly East-West across Birmingham) and TransPennine, a high speed inter-city franchise uniquely running East-West rather than to and from London, have moved to short-listing, while two more (Wales & Borders and Thameslink) had eight and nine bidders respectively prequalifying.


  On 10 August, the sSRA announced a two-year extension of the MML (Midland Main Line) franchise, operated by National Express Group.

  The MML franchise was a longer franchise, due to expire in 2008. Over that period it was due to pay £30 million in premium which would have gone to the Consolidated Fund and would not have been retained for investment within the rail industry. The extension to the franchise has been agreed on a "no subsidy/no premium" basis, and has secured £238 million of new investment by the company. The benefits include:

    —  A new fleet of high-speed trains.

    —  Infrastructure improvements.

    —  Ten minute journey time reduction between London and Sheffield.

    —  A 2 per cent improvement in punctuality by 2008.

    —  Station improvements.

  In August and September, the sSRA announced negotiated deals, first with Prism Trains (holder of four franchises) and then with National Express Group which moved from five to nine when it acquired Prism with the Franchising Director's consent. The net product of those deals will be significant investment in the long-term London, Tilbury & Southend franchise (London commuters) and consent to proceed early without further cost to terminate two franchises whose routes will go into Wales & Borders or Wessex and one, WAGN (West Anglia Great Northern), which will be split and absorbed into Thameslink and Great Eastern upon refranchising.

  All this activity proves the competitive bidding process is working well and, as the sSRA Chairman said last year, "Everyone wants something, so everything is negotiable".


  Consultation with local authorities and the rail freight industry is under way on new criteria for freight facility and track access grants. The intention is to broaden the basis of assessment to ensure that grant is available for environmental and de-congestion benefits, recognising the value of reducing the number of HGVs on motorways and dual carriageways as well as on single carriageway roads. Other, company-neutral support grants or funding for freight traffic development are under examination.

  In infrastructure, planning is starting on the development of projects to provide capacity and capability for freight on key corridors including, but not limited to:

    —  Routes to the deep sea ports.

    Felixstowe to the West Coast Main Line at Nuneaton (for deep sea container traffic to and from the West Midlands and the North West focussed on Crewe.)

    Southampton to the West Midlands (for deep sea container traffic from Southampton Docks.)

    —  Freight enhancements on the east Coast Main Line.

    —  Freight routes around London.

  In every case possible, application will be made also to the EU for TENS (Trans European Networks) funding.

  Within the Ten Year Transport Plan, £3.4 billion is earmarked for freight investment and support over the 10 years.


  The £7 billion RMF is to be managed by the SRA and will provide funding direct to Railtrack and others throughout the ten year period both as a basis to level in additional private sector investment in infrastructure, and to purchase incremental capacity or performance outputs where this is required for the effective functioning of the system, but cannot support commercial investment.

  In sum the SRA will support infrastructure investment (a) through franchise support payments to TOCs and support as above for freight enabling them to meet Railtrack's track access charges, including project financing costs; (b) through the RMF; and (c) through freight facility grants for dedicated and open access terminals.

  At the hearing of 12 July, the Committee questioned the adequacy of capacity, and how it would be allocated. The RMF is one way in which the SRA would intend to meet the needs of a wider range of services than could be accommodated now. Plans for upgrading the East Coast Main Line, for example, will provide an alternative freight route throughout much of the corridor, and substantially reduce the need for rationing and allocating capacity.

  In most cases, major infrastructure projects would be taken forward through Project Development Groups organised by line of route or by area, whose membership would be the SRA and Railtrack but might also include other substantial funding or project management partners or TOCs. The objective would be to specify and price prioritised projects. Implementation and operation would be under the direct or indirect control of Railtrack, as controller and operator of the network.

  Between Royal Assent on the Transport Bill 2000 and the formal establishment of the SRA (assumed to be 1 February 2001), the sSRA will publish a Shadow Strategic Plan. This will be a statement of intent for vigorous action during 2001 and beyond on refranchising, freight development and infrastructure project preparation and progress (the last in partnership with Railtrack). This statement will invite comment and reaction to our intentions, and will specify a number of strategies on which we are obliged to consult before adoption. Following that process, the SRA's first formal Strategic Plan will be published in autumn 2001.

  The Shadow Strategic Plan will also reflect the findings of the joint industry examination of impediments to integrated operation of the railway to ensure safety, performance and capacity for growth. The sSRA issued a Press Notice on 25 October 2000 about this joint industry initiative in response to the issues raised by the accident at Hatfield on 17 October 2000. A copy is attached. [22]

October 2000

22   Not printed. Back

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