Examination of Witnesses (Questions 100
TUESDAY 20 NOVEMBER 2001
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.
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
(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
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
(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.
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
(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.
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.
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
(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.