Select Committee on Transport, Local Government and the Regions Minutes of Evidence


Examination of Witness (Questions 1-19)

MR RICHARD BOWKER

WEDNESDAY 10 APRIL 2002

Chairman

  1. Good afternoon to you. I wonder if you would be kind enough, kind sir, to tell us who you are?

  (Mr Bowker) I am Richard Bowker, Chairman and Chief Executive of the Strategic Rail Authority.

  Chairman: Now, Mr Bowker, I am afraid we have a little bit of housekeeping to perform first. Ms Jackson?

  Helen Jackson: I declare that I am a member of the Transport and General Workers' Union.

  Chairman: Mr Stevenson?

  Mr Stevenson: I am a member of the Transport and General Workers' Union.

  Chairman: I am a member of the Rail, Maritime and Transport Workers' Union.

  Mr Donohoe: I am a member of the Transport and General Workers' Union.

  Miss McIntosh: I have got interests in Railtrack, FirstGroup and Eurotunnel.

Chairman

  2. Thank you very much indeed. With that out of the way, may I welcome you most warmly and ask you if there is something you would like to say before we begin?
  (Mr Bowker) No, Chairman, I am happy to go straight to questions.

  3. In which case, could I ask you what progress you have made about franchise replacements, particularly using your core specifications as a basis?
  (Mr Bowker) The progress is quite substantial now. We have begun the process on a number of franchises, Wales and Borders, where we have selected pre-qualifiers. We are in the process of—

  4. Sorry, three qualifiers?
  (Mr Bowker) Pre-qualifiers.

  5. I beg your pardon.
  (Mr Bowker) We are in the process of doing likewise for the Northern Rail franchise. We have also announced recently that we are beginning the process on the Greater Anglia franchise. The core specification documentation is in its final stage of preparation and with Wales and Borders we shall shortly be making that documentation available to the pre-qualified bidders.

  6. You have got a specific suggestion on the Northern Rail franchise. How long is it going to take for the whole procedure, do you think?
  (Mr Bowker) On the Northern franchise we are hopeful that a preferred bidder could be announced in around January or February 2003 with a new franchise agreement in place in March 2003.

Mr O'Brien

  7. Can I just follow on from that, please. You have now confirmed that Arriva Trains will be penalised for poor performance. What benefit will the travelling public in the north, my constituents, get from that penalty?
  (Mr Bowker) The process of fining Arriva Trains North was quite a complex one. They have had to provide a quarter of a million pounds of passenger benefits on their franchise for every four weeks of the reduced services that they have had.

  8. In what way will the passengers benefit?
  (Mr Bowker) The passenger benefits which we are working through in Arriva will flow through into direct tangible things that passengers will experience.

  9. What tangible things are we looking at?
  (Mr Bowker) We have not finalised what they may be.

  10. How will they benefit from that quarter of a million pounds?
  (Mr Bowker) The other thing we are also doing is they are now required to get their driver stock up to the full establishment level and that will ensure that they will continue to run the full service that is expected.

Chairman

  11. And you have ensured that those are not stolen off any other companies in the area, have you not?
  (Mr Bowker) The proposal that we have from Arriva requires them to get their own driver training establishment back up, so it is their own internal training process.

Mr O'Brien

  12. One of the conditions of the penalty was that the reduced timetable should be withdrawn. What is the situation with that?
  (Mr Bowker) The timetable will be restored to its full service as part of the enforcement regime.

  13. When?
  (Mr Bowker) The date on that is soon. I need to come back to you with a precise date.

  14. That is not good enough. Last time you were here I pressed you again about the expenditure in the north compared with the south and you advised the Committee that was because of the fact that there was a great deal of pressure from passengers in the south and I made the remark that my constituents are just as important as anyone else in this country. I am not satisfied with the response that you are giving today, I want some more clarification.
  (Mr Bowker) Could I say, Mr O'Brien, that the SRA, and I personally, share that absolutely. There is no differentiation between passengers irrespective of where they live. We treat the franchisees the same and we expect them to deliver a high quality of service to all passengers irrespective of where their locality is.

  15. How bad will Arriva have to proceed with their services before you withdraw the franchise?
  (Mr Bowker) There is a stipulated process which requires if there were failures in the franchise they were to have call-ins and if they persisted in that there is a process for going through to breach and they could end up in default of the franchise.

  16. We have had this situation in the north now for nigh on two years. How bad will the service get to people in the north of England before you withdraw the franchise?
  (Mr Bowker) If I may answer that in two parts. We have to do what the contract currently permits us to do. We cannot act in a way that is outwith the contractual arrangements that I inherited. We will seek to enforce those. We are not going soft on franchisees and, indeed, I think the Arriva example shows a situation where we are prepared to use the enforcement and penalty powers. The second part of the answer is what we are really keen to do is move on from the contracts we currently have into a new franchise for Northern Rail where we can restructure the franchise agreement such that it is more focused on delivery of service to passengers and we intend not to be in this position again. We cannot do what we do not have powers to do.

  17. Having been given notice by the SRA that if they do not improve the performance then the franchise could be withdrawn, when do we follow that notice up?
  (Mr Bowker) We have given Arriva notice that we consider what happened to be unacceptable, that is why they have been fined, and we will use the full force of the contract if it is necessary.

Chairman

  18. You have made it quite clear that you would regard compensation to the passengers as being the quid pro quo for those fines because also you are going to fine them if there is a problem with the drivers, so we are talking of quite large amounts of money, and you would expect under the new set of circumstances to produce practical results for the passengers?
  (Mr Bowker) I think that is absolutely right. One of the reasons why we did the drivers' fine, for example, a £5,000 per driver per month that they fall short of the target they have been set, was because that is what actually impacts on the passenger. If there are no drivers, no train, that is where they suffer. Rather than just hit them with a fine what we have done is we have locked it into incentivising them to do what we want, which is performance for the passenger.

Mr O'Brien

  19. Could I just follow that. Is the SRA working to make conditions in the light of the experience we have had in the north so that the franchise can be withdrawn easier if the franchisees do not perform and provide the service for the passengers?
  (Mr Bowker) All my experience, Mr O'Brien, with contract management, which is what these franchises are, is that if you start the contract relationship on a "we will hammer you if you do not perform" you get poor performance, it drives poor performance, it creates poor behaviours. What I am seeking to do is to create new franchise agreements which actually mean that the SRA and the franchisee work together incentivised to deliver better performance. That does not mean a soft contract. We will use the enforcement regimes and if necessary, if the circumstances are right, we will remove franchises. That is our power and that is what we will do. I am not seeking to start from a position to make these franchises easier to take away, what I am trying to do is to make these franchises designed to do what we all want, which is the right service for the passenger.


 
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