Memorandum by the Commissioner of Transport
for London (PRF 44)
PASSENGER RAIL FRANCHISING
Transport for London (TfL) is governed by a
15-person Board appointed by the Mayor and is responsible for:
London Buses, Croydon Tramlink, and
the Docklands Light Railway;
managing London's network of major
roads, known as the Transport for London Road Network (TLRN) and
all traffic signals in London;
regulating taxis and minicabs;
overseeing water services and other
ancillary transport services;
The London Underground is under the
control of the Government pending the outcome of the PPP procurement.
The provision of National Rail services is currently
outside TfL's direct responsibilities despite the importance of
National Rail's commuter services in bringing commuters into London.
The Mayor, through TfL, is required to give guidance to the Strategic
Rail Authority (SRA) on the development of National Rail services
London has a high demand for commuter services.
C500,000 people per day travel into Central London on National
Rail services. Overall demand has remained constant and recently
increased despite poor performance following the Railtrack crisis
at Hatfield. London relies on rail for commuting due to traffic
congestion and lack of coverage by the Underground particularly
South of the Thames.
The following are considered to be valid reasons
why current performance is so poor and why significant and sustainable
improvements are unlikely unless structural changes are made:
Railtrack is not organised to meet
the growing needs of London and the South East Region, showing
Organisation and management:
Railtrack is organised into zones which converge on London. There
is no specific Railtrack management unit for London and the South
Strategic direction: Railtrack
produces an annual network management statement which reflects
aspirations put to Railtrack by the operating companies and local
authorities. The process of prioritising these into a coherent
programme for the network or a UK region such as London and the
South East is weak.
Railtrack's project plans for
London are not funded. The Government has not set out a clear
capital investment programme for National Rail.
Project management: Railtrack
has displayed itself as incapable of managing large infrastructure
projects such as the West Coast upgrade owing to a lack of a central
project management capability
The Train Operating Companies (TOCs)
are not financially incentivised sufficiently to make sustained
improvements in performance within existing franchises. They also
display evidence of distractions including:
Day-to-day operational crisis
management: the current franchise regime between the operating
companies and Railtrack in terms of financial penalties is focused
on attribution of blame
Industrial relations disputes
A preoccupation on franchise
renewal demanding senior management time
A lack of a definitive funding
structure for meeting overcrowding (PIXC) targets and providing
additional rolling stock
Reliance on Railtrack for capacity
upgrades through access charges.
No proper certification process
for commissioning new trains into the network.
There are too many franchises to
give London a consistently managed commuter operation. London's
commuter services are provided by 12 franchisees.
Marketing is totally fragmented and
inconsistent. The financial pressures on the franchises are making
fares integration extremely difficult.
Conclusion: Without structural change to the
Railtrack management structure and the specification and control
of franchises serving London, it is difficult to see how performance
can improve and how significant increases in service levels can
The Mayor's Transport Strategy requires improvements
to both the quality and extent of London's rail services. In setting
up TfL's organisation I requested a report designed to ensure
that TfL can influence improvements to rail services within London.
The active progression of major rail infrastructure schemes for
the capital is also essential.
There are ten critical areas of improvements
urgently needed in the quality and quantity of commuter rail services
in London. These are:
(i) More and better services on London's
orbital rail networkincluding the West and North London
Lines and also the dense suburban network South of the Thames,
which largely complements the Underground network.
(ii) Improvements to the capacity of radial
routes that have no or poor inner suburban services including
Stratford-Lea Valley and the Chiltern routes.
(iii) Augmenting capacity on existing routes
into London by reducing operational complexity and multiple London
terminals on individual routes. Replacement of irregularly timed
services and increasing train length is also essential.
(iv) A sensible interchange policy whereby
people can change form National Rail to the Underground and between
mainline routes on the approaches to London so providing access
to the congested inner suburbs around central London and particularly
relieving overcrowding on the Underground at London terminals
such as Victoria.
(v) Proper fares integration. National Rail
fares need to be aligned with fares on the Underground and the
buses. Travelcard tickets do exist but many day fares are out
of line within London.
(vi) Improved accessibility.
(vii) Unified marketing for London commuter
services as opposed to separately branded rail companies.
(viii)A code of standards on security that are
actually adhered to.
(ix) A realistic and complementary plan for
the routing of rail freight in and around London that is consistent
with an increased level of passenger services.
(x) An immediate start on major rail projects
in the form of regional metro services including the East London
Line Extension, Thameslink, Crossrail and Hackney-South West.
National Rail must be developed so that access
to the regeneration areas of London is improved. A 50 per cent
increase in capacity over the next ten years is required by a
combination of service improvements and new projects in order
to meet increased demand as a result of population growth and
also to reduce overcrowding. This is complementary to the Secretary
to State's overall UK requirement that franchises deliver 50 per
cent more journeys.
TfL operates one railway franchisethe
Docklands Light Railway (DLR). This is now acknowledged as the
most reliable rail service in the UK. Factors relevant to National
Rail franchising are:
The infrastructure is owned by TfL
(through DLR Ltd) and major projects controlled by TfL. This includes
resignalling schemes designed to upgrade capacity and reliability.
TfL has invested in upgrading the
railway as demand has increasedfrom 20m passengers p.a.
in 1996 to 40m passengers p.a. in 2000-01by provision of
additional cars as a direct purchase (on value for money grounds)
making them available to the franchisee. Failure to anticipate
and hence meet growing demand in a major component in the accelerating
difficulties with National Rail franchising so compounding Railtrack's
Franchise targets apply to train
running as follows:
Departure (target 98 per cent).
A tightly drawn target which includes completing the journey.
(Short journeys, turnbacks etc, miss the target).
Reliability (target 96 per cent)
refers to adherence to 3-minute headway.
Franchise targets have also been
applied, with financial penalties to the availability of:
A series of other, non-financial,
targets are also measured and regularly reviewed and can be implemented
by enforcement orders.
Customer perception is also measured
and incorporated in the franchise payment mechanism as opposed
to league tables.
The key success of the DLR has been
the management of the franchise contract through a review structure
involving the franchisee at Managing Director level. The financial
incentives are part of this process.
Conclusion: A tightly managed franchise arrangement
to operate and maintain the service can work, provided the specification
is clear, the infrastructure provided is in good order, and TfL
retains the capability of upgrading the infrastructure to meet
A high level of involvement by the Franchisee
is required on commissioning projects and absolute clarity is
required regarding who holds the safety case and the associated
safety management processes. Reliance on paper-based contractual
safety case processes is not considered sufficient.
These processes can be applied to National Rail
A body exists to provide clear specification,
franchise management and project upgrades.
The infrastructure is competently
managed, in a safe way far more associated with the operational
specification and the need to increase capacity.
5. NATIONAL RAIL:
THE SRA TOWARDS
In recognising that national commuter rail services
provide a service within and also to and from London I contend
that a balance has to be drawn between long distance rail aspirations
and local commuters. The current franchise process does not reflect
that approximately half of National Rail passenger journeys originate
or terminate in the London area. The balance at present is largely
dictated by commercial considerations where the TOCs through the
franchise replacement process bid an optimum service in terms
of the profit line (or net subsidy). A clear operational and project
specification on what is required for London is missing.
TfL has established a partnership with the SRA
and wants to grow this partnership in terms of the train service
specification input so that future franchises respond to the transport
requirements of London and its hinterland. The aim must be for
future franchise tenders to respond to a specific specification,
which would include the timetable, integrated fares and the equipment
to be used, together with a direct penalty regime on operational
The current circular arrangements whereby investment
from Railtrack is funded by access charges from the franchising
process (ie by Government) is now evidently flawed. Additionally
the issue of prioritisation has led to ever increasing aspirations,
most unfunded in Railtrack's successive network management statements.
Railtrack's infrastructure is there to permit
the provision of rail services. It should be far more closely
aligned with London's overall transport requirement and the services
running on it. I advocate the following changes of some significance
to the current franchising structure:
(i) Railtrack should be divided into regions
one of which should be for the London and South East region centre
(ii) Ownership and direction of Railtrack
in the London and South East Region should transfer to TfL and
the SRA (representing the regional view). The operators should
also participate in the ownership of Railtrack.
(iii) Projects would be sponsored by the
recently established London Programme Committee which would manage
infrastructure upgrades directly to permit the TOCs to augment
their services to meet the service specification as issued by
TfL and the SRA.
(iv) The franchise map should be further
re-drawn in the London and South East Region to permit effective
integration of services and the development of metro services.
(v) A metro franchise (or two franchises
one for North and one for South of the Thames) should be created
for London metro services. These should be the responsibility
of TfL in conjunction with the SRA.
(vi) Longer distance radial franchises should
be simplified both in terms of operational specification and the
number of franchisees involved. These should remain the responsibility
of the SRA (or any successor) in conjunction with TfL.
7. WOULD THESE
Improvements are unlikely unless franchisees
and Railtrack are clear about London's requirements and that they
are funded on the basis of meeting these requirements. This requires
organisation alignment as proposed in this submission and participation
by TfL in both the franchising process and ownership and direction
TfL, in controlling other aspects of London's
transport provision is well placed to ensure that commuter rail
services are properly integrated into the London network and that
fares and marketing are also properly integrated.
None of these improvements will be effective
unless capacity is increased and this involves the need for prioritised
and properly funded project management which can only be achieved
by TfL's direct involvement in the management of Railtrack. Both
SRA and TfL's participation in Railtrack would take Railfreight's
requirements into account. The development of Railfreight to and
from London is also a priority for TfL.
Effective delivery of major projects such as
Crossrail cannot be achieved, as is evident with Thameslink 2000,
by a combination of Railtrack and access charges from potential
train operating companies through the franchise process. Direct
project development by TfL and the SRA is envisaged for Crossrail
to ensure the project meets the needs of London (through a joint
TfL, SRA company).
An effective way forward can only be achieved
through proper specification both in terms of improving existing
franchises and letting replacement franchises. This includes investment
in value for money rolling stockfor the whole conurbation
and the effective control of projects designed to provide for
The mechanism for this is to establish TfL as
a London Transport Authority for Commuter Rail in the same way
as it is for other transport modes in London. This proposal is
similar to the Passenger Transport Executives already in place
in other major UK conurbations. Such transport authorities, which
include responsibility for National Rail commuter or suburban
services, are in place in most European and North American cities.
To achieve this the partnership between TfL
and the SRA needs to evolve so that TfL becomes the commuter rail
transit authority for London, reflecting the needs of London and
the South East Region. Such a body would take over the franchising
of London's metro-style commuter rail services and ensure that
other non-rail modes in London support increases in output from
the rail system (in areas such as planning, access to stations,
TfL should control and prioritise projects on
the current Railtrack Network within London and sponsor other
major projects to provide additional rail capacity in London including
the East London Line extension and Crossrail.
Robert R Kiley
Commission of Transport for London
16 October 2001