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


Examination of Witnesses (Questions 1-19)

MR EUAN CAMERON, MR CHRISTOPHER GARNETT AND MR CHRIS GREEN

WEDNESDAY 19 JUNE 2002

Chairman

  1. Good afternoon, gentlemen all. May I welcome you most warmly to the Committee? Would you be kind enough to identify yourselves?

  (Mr Garnett) Christopher Garnett. Chief Executive, GNER
  (Mr Green) Chris Green. Chief Executive, Virgin Trains.
  (Mr Cameron) Euan Cameron, Managing Director, Arriva trains.

  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 General.

Chairman

  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.

Helen Jackson

  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 years.

  8. What is your estimate of growth in Trans-Pennine passenger numbers over the next five years and when did you last revise it?
  (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 required?
  (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.

Chairman

  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 hopefully—I only say hopefully—another 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 it not?
  (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.

Mr Bennet

  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.

Helen Jackson

  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 people.
  (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.

Chairman

  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.

Helen Jackson

  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 again.

Dr Pugh

  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.


 
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