Examination of Witnesses (Questions 1-19)|
WEDNESDAY 19 JUNE
1. Good afternoon, gentlemen all. May I welcome
you most warmly to the Committee? Would you be kind enough to
(Mr Garnett) Christopher Garnett. Chief
(Mr Green) Chris Green. Chief Executive, Virgin Trains.
(Mr Cameron) Euan Cameron, Managing Director, Arriva
Chairman: We do have one small piece of house-keeping.
I appear to be the only one who has anything to declare. Gwyneth
Dunwoody, Rail Maritime Trade Union.
Helen Jackson: Helen Jackson, Transport and
2. Do you have jointly or severally anything
you want to say before we commence questions?
(Mr Garnett) Three points. GNER is the biggest mover
of people in and out of the North-East. The success of the local
train operator is very important to us: we are important to them,
they are important to us. The money which is going into the new
franchise is an important issue for us because it affects our
passengers getting on and off trains. The third point is to make
sure that when the split of Trans-Pennine and Arriva takes place,
it is done smoothly with minimum interruption to services, passengers
and the railway.
(Mr Cameron) Thank you, Chairman. I appreciate the
opportunity to present. Just two points, which we made in our
submission. The first point is that the quality of service provided
in 2001 was totally unacceptable for our customers and we apologised
for that on 4 September that year. The second point is that the
railway we inherited from our predecessors was just not up to
scratch and some of the external factors which plagued the industry
during 2000 and 2001, like the unfortunate accident at Hatfield,
flooding, the driver situation, the very heavy recruitment and
training programme that we put in place, the promises we have
made to remedy the situation, those that we have delivered and,
lastly, what we are proposing to do for the future of services
in the North with the Trans-Pennine Express.
3. That is helpful. May I come to you first?
When you take on a new business, do you do a due diligence search?
(Mr Cameron) Yes, we do and we understood quite a
bit about the company when we took it on from MTL. The difficult
thing to understand was the culture of the company. When we got
into it in February 2000, we found that MTL's attitude towards
its management in ATN was that they were to cut costs, that is
what they were trying to do to deliver the franchise bid. Therefore
all the key performance indicators were on cost cutting and not
focused on the customer at all. What we had to do was start turning
that round and we have had considerable management changes there,
new Managing Director and four of the senior team have been replaced
to focus clearly on the customer.
4. The hazard probably was that some of the
things which you now seem to be highlighting, which you discovered
only after you took over the company, were not things like the
culture of the company but were actually factual things, were
they not? There was a driver shortfall of 34, there were severe
shortages of other staff, including conductors. There was insufficient
driver training resource without any systematic programme to recruit
new train drivers and they did not have enough rolling stock.
I should have thought those were things that you might have discovered
before you took the franchise over.
(Mr Cameron) Some of those facts were certainly available
but the way that the management team approached the remedying
of these was not understood until we got into the company. Also,
the scale of the loss of drivers magnified itself during 2000
and certainly into 2001. There are several reasons for that. We
introduced a 35-hour week along with a lot of other parties in
the industry and that demanded more drivers. We ended up being
totally out of sync with the pay which was paid to drivers by
some of the other train operators; Virgin and GNER were paying
up to £10,000 a year more in 2001 and that caused us a loss
of drivers to other parts of the industry. With hindsight we could
certainly have foreseen that and we could have done a lot more,
but we could not see them when we took over the company in 2000.
5. Was the shadow SRA right to allow you to
continue running services which were based on Northern Spirit's
original franchise bid?
(Mr Cameron) When we took over the franchise in February
2000, the Strategic Rail Authority asked us to take it over on
the basis of the MTL contract because they were only expecting
us to run that operation until the end of 2000 when the franchising
programme would be complete. The Trans-Pennine Express bid would
have been finalised and awarded and so would the Northern Rail
franchise. When we took over, we took over with the losses we
inherited from MTL and we put in a very robust recruitment and
training programme once we found out the scale of the problem.
The difficulty is that it takes some 15 months to recruit and
train a driver, so even though we put the programme in place in
April 2000, it was not going to be until July 2001 that the first
driver would come out of the training programme and that is what
would cause the underlying problem in September/October 2001.
6. Would it have been better if the refranchising
had been finished by the end of 2001 rather than 2003?
(Mr Cameron) I certainly think if the franchising
process had been completed in the timescale which was set out,
some of these problems would have been inherited by the incoming
franchisee. What we have done, certainly in recruiting and training,
is make sure that when the Trans-Pennine Express franchise is
created, some time during 2003, there will be sufficient drivers
and sufficient conductors for that split. We are therefore going
to ensure that whoever succeeds in winning that franchise will
not inherit the kind of problems we inherited from MTL.
7. You know the Trans-Pennine experience on
the railways quite well. You know that despite the discomfort
of the rolling stock the crowds continue to want to travel on
those trains. Is it your intention that the rolling stock will
keep pace with the customers on the Trans-Pennine routes?
(Mr Cameron) That has always been our intention. In
the original bid we put in, there was sufficient rolling stock
not only to resolve the problems which exist at the moment, but
to keep pace with the growth we are getting on the Trans-Pennine
network. It has been that growth right since 1986 when the service
started up and there are four times the number of services now.
Certainly the growth has been in double figures for a number of
8. What is your estimate of growth in Trans-Pennine
passenger numbers over the next five years and when did you last
(Mr Cameron) We last revise d it earlier this year
when we put the revised best and final offer in for the existing
Trans-Pennine Express bid.
9. You revised it from what to what?
(Mr Cameron) The whole bid was changed. The original
Trans-Pennine bid was for a 20-year franchise and it was based
on extensive infrastructure improvements, some in your own constituency
like Woodhead. The second franchise was based purely on an eight-year
franchise rather than a 20-year franchise. The growth is much
less and therefore we have down-graded the number of units we
need, but we are going to increase them by about 30-odd per cent
over what we have at the moment.
10. What you are saying is that you have downgraded
the guestimated increase in passenger numbers because of the downgrading
in the major infrastructure expectations.
(Mr Cameron) We have downgraded the number of vehicles
we need because it is only for eight years rather than 20 years.
11. Is it your view that with the present infrastructure
there will be sufficient leeway to introduce quarter hour services
to Manchester in such a way that the number of passengers that
want to use that route in the South Pennine link and the North
Pennine link will be able to do so or is further infrastructure
(Mr Cameron) I do not believe there has been sufficient
infrastructure investment in the last 40 years to cope with the
growth in usage on the railways. What we put in our original bid
was a remedy to that by upgrading the North Trans-Pennine routes,
by providing the Woodhead Tunnel in order to upgrade the South
Trans-Pennine route to four trains per hour, one every 15 minutes
on that route, which is not possible at the moment, by providing
a flyover just outside Manchester to make sure you could get across
the lines and into the station and a third platform at Manchester
airport, all to cope with the growth that we expect over the next
20 years. We have kept that vision open in the second bid we have
put in and fully expect in future ten-year plans that money will
be made available to provide that infrastructure. What we have
done on this bid, when no infrastructure requirements have been
laid down by the Strategic Rail Authority, is to put the investment
into rolling stock, to make sure we have sufficient rolling stock
to carry the people who are likely to travel.
12. What about the SRA's estimate that no spare
trains are available?
(Mr Cameron) The existing franchise when it started
in 1997 was short of rolling stock. We inherited that position
and we made a point to the Strategic Rail Authority that there
was a need for 18 additional vehicles, nine two-car sets. They
fully accepted that as a requirement and they have accepted it
is their responsibility to procure those vehicles for this franchise,
because we are only a short-term holder of the franchise, as I
am sure you are aware. The difficulty is in finding those vehicles.
We are going to get two vehicles in October this year and hopefullyI
only say hopefullyanother eight vehicles during 2003.
13. There are an awful lot of "hopefullys".
You have asked for all this extra rolling stock. What has the
SRA said to you? Has it said, yes, we will provide them or has
(Mr Cameron) It has said yes, it will provide ten
of the vehicles because it could find a route to getting those
vehicles and we had hoped to get them in October this year for
the timetable change. The latest advice we have is that two vehicles
will be available and eight more vehicles available next year.
14. Is there not a major safety issue? I have
been on three Arriva trains which have gone from Huddersfield
to Leeds early in the morning when the overcrowding has been at
such a level that no-one could get off that train safely if there
were a fire or any other incident on the train. To see people
not only standing on the aisle, but being pushed into the spaces
between seats is surely totally unacceptable.
(Mr Cameron) The safety guidance we give to our conductors
on those trains is to make sure that they can get people off the
train should there be an emergency. Part of that problem was resolved
on 2 June this year, when we reinstated all of the trains which
had been taken off because of the mitigation plan which we put
in on 29 October last year. That has eased the problem, particularly
coming in from Huddersfield.
15. May I pick up on that because I have frequently
been on trains between Sheffield and Manchester where there has
been standing room only and that is quite a long, 45- to 50-minute
journey. If, despite a couple, or two or three or more trains
on that route, there are still people standing, what are the SRA
saying to you about providing more rolling stock to take those
(Mr Cameron) That is what we have said to the SRA
in terms of our bid for the Trans-Pennine, that more rolling stock
is needed. A number of the trains you are referring to are two-car
sets and we propose three-car sets to cope with the overcrowding.
That would take up the number of vehicles we have currently allocated
to the business from about 140 vehicles up to 176 immediately
to start getting over that problem you have referred to.
16. Supposing you had the same overcrowding
standards in the North as there is for services into London, what
would that do to you?
(Mr Cameron) We do not predict that we will have the
same overcrowding on the Trans-Pennine Express as coming into
London; on any of the projections we have made. We have used a
company called Oscar Faber to help us in assessing this one, looking
at the economic growth of the North of England, and certainly
the rolling stock we have put in will take care of the eight years
of the franchise.
17. But there is a chicken and egg situation.
The economic growth in the North of England depends on commuters
being able to get to and from work whether they live in Sheffield
and work in Manchester or live in Manchester and work in South
Yorkshire. If the trains are there and the people come, then there
will continue to be overcrowding on those routes unless something
more fundamental is done. Would you agree with that?
(Mr Cameron) Certainly the idea in our bid is to get
that sorted out immediately. You are quite right that there is
an overcrowding at the moment. After three years we would sit
down with the Strategic Rail Authority and review the position;
there is a three-year review at that point. We would assess the
growth we have had, because it might be greater than that which
we are predicting, and then we would put to them that we require
more rolling stock and we could procure that as an add-on build
to that which we are getting built for the franchise.
18. One last point on Trans-Pennine which relates
again to the congestion on the infrastructure. If we get it right
on passengers and then there is an increased demand for freight,
how will the existing railway infrastructure cope?
(Mr Cameron) I do not think the existing infrastructure
going from Sheffield to Manchester could cope with both an increase
in passenger usage and an increase in freight. That is why we
proposed the re-opening of the Woodhead Tunnel which would allow
the four trains per hour and still allow the other route to carry
local services. So we could cope with the increase in freight
and the increase in passengers with that particular proposal we
put to the Strategic Rail Authority last year.
Chairman: That bring us back to the infrastructure
19. We are aware that you have taken over the
MTL franchise under slightly different circumstances, but people
on Merseyside are not actually saying that the bad old days of
MTL have gone and the new wonderful days of Arriva are there.
The way you have represented things is that new management has
taken over and I have to tell you that people in Merseyside by
and large have not noticed much difference. Why is this?
(Mr Cameron) I believe that they have noticed a difference.
We went to the Rail Committee which is chaired by Councillor Dowd,
who is Chairman of the Passenger Transport Authority, two weeks
ago and there were no issues about the operation of the Train
Operating Company. If we just take the latest figures I have available
for the performance of the service and if we take it on your particular
line coming in from Southport, up until last Saturday for the
three weeks of this four-week period we were running 99.6 per
cent of all trains, that is four trains in every thousand were
cancelled and the punctuality was 95.9 per cent to time. I do
think people are noticing the difference.