Select Committee on Welsh Affairs Minutes of Evidence

Examination of Witnesses (Questions 20 - 39)



Mr Caton

  20. What do you think are the reasons for the current delay in creating the Wales & Borders franchise?
  (Mr Brown) That is a question which really should be addressed to the SRA. From our perspective, we have submitted our initial replacement proposals, we have been short-listed along with three other parties. Clearly funding is an issue and that is one which has been communicated to us, but we have not received any formal notification since February of this year as to where the Wales & Borders re-franchising process has got to.

  21. But you are a deeply interested party. One would think if you were following things closely you might have some view as to the reason for the delay.
  (Mr Gibb) It has to be said that we have created the Wales & Borders train operating company over the last few months. It has now been operating for just over a month and during that period we have transferred a significant number of staff around, we have made a significant number of organisational changes and we have managed to sustain train performance and safety during that period. What has been achieved in the last six months must not be underestimated and we now have trains and stations all over Wales with the new company name highly prominent. Already people are beginning to identify with the new train operator in Wales.

  22. You have the company but you do not have the franchise. Why do you think it has been delayed?
  (Mr Gibb) That is a question best asked of the SRA who are responsible for that process.

  23. You have made clear that you like the idea of a two-year extension as the best way forward now. Bearing that in mind, what is the earliest realistic date from your point of view for establishing the Wales & Borders' franchise?
  (Mr Gibb) Through a competition or through an extension?

  24. The complete franchise.
  (Mr Gibb) In terms of bringing in all the component parts, I would imagine that it would be possible to bring in the North Wales operation of First North Western in September next year. It would then be complete under its current arrangements. In terms of the sale process, I would expect an extension deal could be concluded within a few weeks. In terms of a competition, it would take substantially longer.

  25. You have answered this, but just to make it absolutely crystal clear, you believe that it is preferable to continue with a shadow franchise for Wales & Borders and Wessex for two to three years so that a proper franchise can be let on a sound financial basis after that. Is that fair?
  (Mr Brown) Yes.

Mr Williams

  26. What are the provisions now being made to ensure railway companies participate in multi-modal travel schemes outside London? Are those provisions included in the new contracts which are being entered into?
  (Mr Pheasey) The new contracts being the new franchise agreements?

  27. Yes.
  (Mr Pheasey) We do not yet know the final form of the new franchise agreement. That is one of the issues the SRA are struggling with: what the terms and obligations within that will be. In terms of co-operation with the multi-modal ones, we are already co-operating with a smart card experiment in the Caerphilly area. Where such schemes are developed, we would wish to participate and would do so willingly. We do see that it is generally best led by the local authorities as an initiative, with us participating as one of the component parts. Bus operators equally have to be in there.
  (Mr Gibb) We have pulled together over the last couple of years a product called Freedom of Wales Flexipass. This is the promotional material for it which is a pass available primarily aimed at tourists for the whole of Wales, providing travel on most bus operators and all rail operators and indeed most private steam railways as well. It is a product which has been very successful and has brought a real integrated type of ticketing to tourism visits to Wales. There is plenty of precedent of work which has been done, entirely off our own back rather than through compulsion.

  28. This includes integrated timetables and changeovers between buses and trains. One of the issues that raises in Mid Wales particularly is where there is a failure with the train system and a service does not run and replacement buses are put on, they do not call at every station and people are left at stations. Are people looking at this?
  (Mr Gibb) On the Heart of Wales line, which I think is the one you are referring to, it is a particular challenge to run a substitute bus service, basically because the buses are too large to reach the majority of the stations down the country lanes and to turn round. What we normally do is operate a bus service which calls at the larger stations and a parallel taxi service which serves the smaller stations and the taxi service meets up with the bus and transfers the passengers at stations along the line. Not surprisingly, given the rural nature of that railway, at very short notice, when the line is closed, such as a couple of days ago when a lorry ran into a bridge at Builth Wells, it is very difficult to get road transport at a moment's notice. Buses and drivers are not sitting around ready to respond to that, so it is a difficulty. Obviously my objective is to run trains 100 per cent of the time reliably.


  29. Given the present structure of the railways, do you think it is possible to have a modern efficient railway in Wales under the present financial arrangement?
  (Mr Gibb) That would depend on your definition of a modern efficient railway. I believe that even compared with many other parts of Europe we do run a modern efficient railway and the rural railways which we run in Wales are certainly comparable with rural railways elsewhere in Europe.

Mr Owen

  30. Sir Alistair Morton said recently in evidence to the Transport Sub-Committee, that there was no point getting the money if you did not have the right structure in place. What in your view is the right structure for Wales?
  (Mr Gibb) I have to answer that by saying that even with the existing structure there is a lot I could do with additional funding. I could solve most of the overcrowding issues, I could solve most of the punctuality issues, I could bring about a step change in station environments, all to a very short timescale were the funding available.

  31. So you disagree with what he said.
  (Mr Gibb) I do not disagree, but I do believe it is possible to achieve a great deal within the existing structure. My challenge and that of all my colleagues in the industry, has been to work with whatever structure has been in place. We have faced a number of different structures in the last ten years.

  32. What should be the priorities for the SRA in your opinion?
  (Mr Brown) Just to finish off the last answer, where Sir Alistair was coming at was some of the issues around Railtrack. We will work within whatever structure. Moving on to your question on the issue around the priorities for the SRA, clearly addressing the issues around Railtrack is crucial. A second issue for the SRA is to provide the strategic leadership the industry needs; obviously a key priority for the new Chairman, Richard Bowker. A third area has to be to secure the funding, the issues around the Government's ten-year plan, which is a plan we applaud, but we need to have the momentum put in behind that which is clearly an issue of funding.


  33. It has been suggested that Scotrail might operate as a vertically-integrated company, both managing the infrastructure and operating the trains in Scotland. Do you think that is a viable model for Wales?
  (Mr Brown) It has been suggested. It has not been suggested by National Express Group. We are the current franchisees for Scotrail. Scotland has lent itself to observers as a possible pilot. There are certain parallels between Wales and Scotland. Clearly some issues around a single operator, co-terminus geography, co-terminus geography as far as the Railtrack operation and track maintenance are concerned, would lend themselves to Wales being a possible area where this could be tried.

  34. How has the Railtrack zonal structure been re-organised to reflect a Wales and Borders franchise?
  (Mr Gibb) The zone structure has been changed by the transfer of the Cambrian and Cambrian coast routes into the Great Western zone managed from Swindon and by the planned further location of management resources from Swindon to Cardiff in the near future. The North Wales activity from Wrexham northwards remains under the control of Railtrack North West located in Manchester.

Mr Wiggin

  35. How does the state of the railway infrastructure in Wales compare with the rest of the UK?
  (Mr Gibb) I would say that the railway infrastructure in Wales has been steadily improving over the last ten years. I can recollect situations in the early 1990s where the infrastructure faced many, many issues much greater than those today. In terms of our type of railway, the infrastructure improvement has been steady over that period. Obviously we have faced the issue that every other part of the national network has faced over the last 12 months and those issues have impacted seriously on our ability to run a punctual railway. In Wales it has been no different to that elsewhere in the country. The underlying trend in Wales has been one of steady improvement.

  36. Where in your operation are there still infrastructure requirements and how much money will they cost? What sort of funding do you need?
  (Mr Gibb) There is a very long list of the infrastructure enhancements we should like to see. I suppose I could sum those up by saying that infrastructure enhancements currently planned by the Strategic Rail Authority called incremental output statements are intended to provide increased capacity, increased reliability on certain routes. There is a long list of those, of which approximately 23 involve our company and we are very keen to see all 23 of those incremental outputs progressed in the near future. They include, for example, a capacity enhancement on the route from Newport up to Crewe to allow more trains to run on the line through Leominster and to accommodate more freight trains on that route. That is one of the incremental output statements for that area. Several projects have been proposed by the National Assembly for Wales. One of those, for example, is the creation of a passing loop at Dovey Junction to allow an hourly service to operate between Aberystwyth and Shrewsbury. We very strongly support that initiative. If you take into account all the initiatives and if they are all done in the immediate future within a five-year timescale, I should be delighted. That would bring about a radical improvement in the services we are able to run in Wales and an improvement in the reliability and performance. As to how much it would cost, to give you an idea, the National Assembly is currently proposing to spend £55 million over the next five years on projects in Wales. The total cost of the incremental output statements is not a figure I have to hand, but I can provide it separately if you wish. I would guess that the two together add up to in excess of £100 million across the Wales & Borders network.

  37. Is that all?
  (Mr Gibb) That is for those schemes which are currently in the pipeline. I should be delighted and in a realistic frame of mind that would make a very big change to the services we were able to operate. Clearly there are things I should like to see beyond that. That is a pragmatic and realistic ambition for the immediate future.

Mr Caton

  38. From what you said, clearly the enhancements are very welcome, but would you agree with the statement that the railways in Wales do not need major infrastructure enhancements to facilitate increased use of the network?
  (Mr Gibb) That depends on what level of increase you would like to see. I have just touched on a range of improvements which I would say in the total expenditure of things, when compared with a dual carriageway or a motorway extension and things like that, is a modest form of improvement which would bring about a big increase in capacity and reliability. However, we have previously outlined our proposals for a 20-year franchise and that involves a significant increase in lines, way beyond that level of expansion to provide new services. There are schemes that we should like to achieve in the longer term, such as the re-opening of the railway to Ebbw Vale; in the short term lines like the Vale of Glamorgan which we believe will now be funded and will now be completed. In terms of re-opening old railway lines, and one which is often suggested is the line from Carmarthen to Aberystwyth, realistically there is little hope of that sort of initiative in the foreseeable future.

  39. What about improving the quality of the line west of Cardiff to Swansea and beyond?
  (Mr Gibb) The line between Cardiff and Swansea particularly is generally of a pretty good standard. A section of that will be re-signalled in the immediate future from an old 1950s signalling system which hopefully will give us improved flexibility, the re-opening for passenger use of the Vale of Glamorgan line by Barry will provide an alternative route as well and additional capacity which will be very welcome. When you get west of Swansea it does become a little more challenging. There is a lengthy section of single track between Swansea and Llanelli which impacts on reliability and punctuality and the ability to run more trains. There are issues there but there is a lot we can do with the existing infrastructure. We can run longer trains, we can run train services for longer hours into the evenings and on Sunday. A lot can be done on the existing infrastructure.

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