Select Committee on Welsh Affairs Minutes of Evidence


Examination of Witnesses (Questions 100 - 120)

TUESDAY 20 NOVEMBER 2001

MR CHRIS AUSTIN AND MR CEDRIC PIERCE

  100. Are you saying the infrastructure is not value for money, the investment in upgrading the track? I am sure passengers would welcome it.
  (Mr Austin) No, I mean the investment in the overhead lines and the power supply equipment and the electric trains themselves. In the case of North Wales, Virgin are approaching it by introducing Voyager diesel trains with a tilt capability which will perform along with the rest of the main line network to and from Crewe.

  101. Yes, but when you get to Crewe is my point. When they get to Crewe everybody else is electric and west of Crewe is not.
  (Mr Austin) It will not involve a locomotive change or any delay, the complete train will run to and from Euston.

Chris Ruane

  102. Why was electrification viable and worthwhile for other areas of the country but not for Wales. I met with Neil Kinnock when he was Transport Commissioner in Europe six years ago and he said that as far as Europe were concerned it was a goer.
  (Mr Austin) Indeed, yes. It is the norm and electrification took place a lot earlier in the rest of Europe than it did in Britain. The reasons are really those I have given. The justification for electrification back in the 1970s and 1980s was that it was far more efficient. It saved costs, it reduced journey times and therefore boosted passenger revenue, compared with the old diesel locomotive-hauled trains which were being run at the time. My point is that the new trains which have replaced those are just as fast, have just the same acceleration capability and from the passengers' perspective are indistinguishable. The case for electrification is now much weaker than it was 20 years ago.

  103. When I met Neil Kinnock some five years ago he said that the line from Holyhead across to Hull would be increasingly important as Hull became our eastern outpost towards the Baltic and an expanding Europe. Electrification would put us in a better position for an east/west line as well as a north/south.
  (Mr Austin) I do not think so in the sense that if you look at what is happening on the freight side, both EWS and Freightliner and latterly GB Railfreight have invested hugely in new locomotives. Much more has been invested in rail freight than was ever possible in BR days because of all the problems of public sector expenditure constraints. The 310 locomotives they have bought have all been diesel locomotives. They are not buying electric locomotives because they need the flexibility to operate over the entire network, including branch lines and sidings. They have gone for high quality, high reliability diesels rather than electric. It is less of an issue than it was and in terms of priorities there is so much to be expended on upgrading the infrastructure and on providing new rolling stock that electrification may become an important issue again in future years. Just for the present the priorities have to be on expenditure on the infrastructure, particularly on the ongoing safety requirements, the completion of the TPWS programme and the introduction of the European Rail Train Management system, the ERTMS system. That has to take priority over electrification.

Mr Williams

  104. You talk about encouraging rail companies to develop interchange initiatives and to work with the local authority partnerships. You have given some examples of where that has been successful. There are instances where it is not successful. When are you going to take a stronger line on more than encouraging railway companies to take initiatives?
  (Mr Pierce) What do you mean by "not successful"?

  105. We can point to places where there is no integrated system as far as buses and railways are concerned. I was talking with Mr Gibb yesterday about one locally. Will it be in the contract in future that there will have to be improvements?
  (Mr Pierce) There are several locations where it is in the contract, where it has been offered by the train company; as part of their franchise commitment it was put in the contract and we now expect it to operate. There will be parts of the country where they have done something on their own initiative which is not in the contract and we are not able to enforce it. We are not looking for wholesale links where they are not going to be used and where there is no need for them. There does come a point where you get to the point of diminishing returns. I am talking in a global sense there.

  106. You have given us some instances where it has been successful. Can you tell us where you have put it in the contract and you are looking for improvements? You said there were some instances where you had not included it in the contract.
  (Mr Pierce) Yes.

  107. In the future are there other instances you are going to include in the contract?
  (Mr Pierce) There are no specific locations at the moment where I can say we are going to specify a bus link or an integrated transport link at station A. We are going to ask counterparties to come to us with their proposals. We will also want to be satisfied that in drawing up their proposals counterparties have consulted with the stakeholders we were referring to earlier.

Mr Wiggin

  108. Sir Alastair Morton said that there was no point in getting the money if you did not have the right structure. What in your view is the right structure for Wales in terms of infrastructure and railway structure?
  (Mr Austin) He was talking in particular in that context about the structure for the company which replaces Railtrack. The key element there is getting a structure where we can understand where the funding is going and which is geared up to delivering both the major renewal projects and the enhancement projects. One of the problems we have had over the last six to 12 months has been understanding where the funding for Railtrack actually goes. A lot of money goes in, we can see the outputs which emerge but we cannot see the relationship between the two. The transparency of funding and the process of the development of renewal and replacement and expansion projects needs to be much more transparent. We need to have a company which is able either to have the skills itself or to be able to procure the skills to manage and deliver these major projects. In the interim we are taking on that role ourselves through the use of these special purpose vehicles he refers to. In the context of Wales itself, the most important thing we have done is the creation of a single franchise, which provides the focus and the ability to relate to the National Assembly and all the Welsh authorities. That has been really quite important. Mr Gibb referred to the expansion of Great Western zone to take on the Mid Wales and Cambrian lines. It might be nice to think that at some stage some management unit within the new company might cover the whole of Wales, but that is for them to consider. The right steps are being taken at the moment to make it work better.

  109. What do you think the priorities are going to be for the SRA?
  (Mr Austin) In relation to Wales in particular, do you mean?

  110. Yes.
  (Mr Austin) To make progress with the franchise. Everyone is keen on that. The process was quite well advanced when we short-listed companies last February. We might have expected to reach preferred bidder by about the stage the election took place and then after that with the change of Secretary of State, the new franchising policy and what has happened since then, actually restarting that process and getting some clarity will be helpful. The strategic plan will be helpful and the work we are involved in with government in defining the company which takes Railtrack out of administration is also going to be helpful.

Mr Caton

  111. I was interested in your reply to Mr Williams where in the bidding process you said you had not actually made a requirement for a particular action to encourage better integration but it is an issue on which you have invited bidders to put forward proposals. It has made me wonder about the nature of your bidding documents. Is that the nature of the whole thing? Have you put any detailed requirements to these people?
  (Mr Pierce) One needs to say that the ITCs we have been operating under were a model which was developed last year, in 2000, and was being used in the early part of this year. The Secretary of State has published new draft Directions and Guidance and will shortly be commenting on our re-franchising plan. Whether the ITCs as they eventually go out will be in the form they were previously is under review.

  112. In that previous form were there some areas where there were absolutely very detailed requirements as compared with, "Let's have your ideas on how we get the buses and the trains to meet each other"?
  (Mr Pierce) No, ITCs were broadly drafted in general terms and covered some specific areas that needed to be addressed. For example, they would say that you must as a minimum provide the PSR. It did not take a line by line view and say we want this on this route and we want this at this station.
  (Mr Austin) The way we approached it beforehand was to leave it open and invite people's ideas. Clearly the new guidance requires us to be much more specific and prescriptive about what we ask for and we shall be, but we still need to be able to strike a balance between that and leaving the private sector bidders the freedom to initiate and innovate themselves. We shall try to take both of those points of view on board as we develop the new information for counterparties.

  113. I took a step back there to the bidding process. To come back again to railway structure, the Scottish Executive has powers of direction and guidance over the SRA. Would you support similar powers for the National Assembly?
  (Mr Austin) It is not really for us to support or not; that is clearly a political decision and would be for Ministers. What I can say is that I am also responsible for the relationship with the Scottish Executive. We have a very good working relationship with them, indeed I suppose the whole spectrum is covered because in the case of Scotland, they can issue directions and guidance and actually fund the Scottish franchise. In the case of London they can issue directions and guidance in relation to services within London and can provide top-up funding but do not fund the basic franchises because they all go beyond the London boundary. In the case of the National Assembly, it is a consultative role which we are happy to fulfill and indeed happy to work with them on the areas where they want to provide additional funding, but railways essentially are not a devolved matter. We can work with whichever system is appropriate and which Ministers want.

  114. I take your point that it is perhaps not for you to support. Let me put it another way. Can you see strengths in the Scottish model that might be valuable in Wales?
  (Mr Austin) The real strength is in the closer working relationship. Whatever the formal requirements are, the ability to work closely and understand the objectives of the National Assembly is really the key issue.

  115. It has been suggested that Scotrail might operate as a vertically-integrated company, both managing the infrastructure and operating the trains in Scotland. Is this a viable model for Wales in the future?
  (Mr Austin) It is probably one that you would not want to pursue too closely. I have been very much involved in discussions within Scotland and although it is a matter of some considerable press and political speculation, there is not a huge amount of interest from the operators within Scotland, for a number of very good reasons. One is that even within Scotland, with the clarity of a single Scotrail franchise, there are many other operators on the same network and the freight operators in particular are extremely nervous about the ownership of the infrastructure by a single train operating company. That is also true of the operators of cross-country services, Virgin in particular. It is more difficult for them to negotiate with another train operating company for access than it is with an independent track authority. The other thing is a very practical issue, that European Union directives require the separation of the management and control of operations and infrastructure. One would need to bear that in mind as well in any change to the structure. There is a lot of willingness to have a much closer alliancing as exists in Scotland between the train operator, the Railtrack zone and the single maintenance contractor they have up there. That is where the emphasis is being focused rather than on common ownership or common management.
  (Mr Pierce) We would be particularly anxious to maintain consistent standards across the railway network that is used by train services in Wales. I say that in the context that many of your train services come in and out of England, probably much more so than they do in Scotland. It is as important that the total journey from Swansea to London works as it is, that the bit of infrastructure within Wales works, if you see what I am trying to say.

  116. How is the Railtrack zonal structure being re-organised to reflect a Wales & Borders' franchise?
  (Mr Austin) Mr Gibb mentioned the change to incorporate the Cambrian lines. I am not aware of any other changes proposed, nor am I aware of any other changes that might happen in the successor company. What has happened is clearly a move in the right direction.

Chairman

  117. May I ask you to look into your crystal ball and try to envisage what type of service you see in ten years' time in Wales, bearing in mind the problems we have had over the last ten years, particularly over train times and reliability of service, especially of course in the light now of the Cardiff Assembly, the Cardiff/London and North Wales/Cardiff connections?
  (Mr Austin) Looking ahead and even over a shorter period than ten years, I know it is easy to be cynical about this but actually I am very optimistic about that, because a lot of things are committed for delivery over the next three to four years, certainly within a five-year time frame. We are already seeing the benefits (although they are not reliable enough yet) of the new trains on the North Wales route. Very keen to see the same on the new trains for Great Western services to and from Cardiff. Very disappointed that the manufacturers have not been able to provide reliable trains for First Great Western to operate that service. On the other hand, the initial indications from the delivery of the Virgin Voyagers, the cross-country trains, have been very encouraging. There are 27 of them in service and they seem to be performing very reliably, well received by customers. The full cross-country service including the regular Cardiff/Edinburgh service and the service between London and North Wales should be operational by 2004. Within four years of today, you will be seeing some really very significant improvements and on the safety side the completion of the train protection and warning system means that the whole network will be considerably safer as well. All of those things are happening. The important thing as far as the Wales & Borders' franchise is concerned, is the maintenance and development of the very substantial network of services which operates within Wales at the moment. In some ways the main investment is in sufficient support to keep a network operating at that level or better, in particular with additional capacity being provided on Valley lines, other parts of Wales as well but Valley lines in particular where growth has been well beyond the national average for regional networks. We are working with the train operator and with the National Assembly at the moment for some additional services to go in to relieve the present overcrowding. Even in the short term, a lot is going to happen. There are going to be a lot more trains running, a lot of newer trains running and the implementation of the safety systems. Over ten years we are certainly committed nationally to the 50 per cent growth in passenger miles, which we believe is quite achievable and the 80 per cent growth in freight/tonne miles. Again, building on the growth that has happened over the last five years, it is a much busier and bigger railway in ten years' time with a lot of newer equipment on than exists today. It is quite an encouraging picture actually.

  118. I am pleased to hear it. I have allowed my colleagues to be parochial, so I am going to be parochial. I only have two small stations in my constituency on the Shrewsbury to Chester line which takes in the line from Ruabon to Wrexham. A constituent of mine this very Saturday said that she had been late for work 21 times since May because 21 trains had been cancelled in the critical morning service into Wrexham from Ruabon. Can you give any guarantees to Carol Anderson, my constituent, that over the next few months things are going to get better on that line?
  (Mr Pierce) It is difficult to comment on an individual train and on individual services.

  119. Twenty-one individual trains.
  (Mr Pierce) I take your point. I still cannot comment on that particular train. We do have enforcement thresholds which we apply fairly vigorously and we will, as we re-franchise, be looking to see that the proposals they put to us are resilient and are underwritten in terms of what they can do.

  120. I shall be writing to you to make sure you enforce on that line.
  (Mr Pierce) I will give you his address.

  Chairman: Thank you very much indeed. Once again we are very punctual and I hope this bodes well for the service in Wales. Order, order.





 
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