Examination of Witness (Questions 1-19)|
WEDNESDAY 10 APRIL 2002
1. Good afternoon to you. I wonder if you would
be kind enough, kind sir, to tell us who you are?
(Mr Bowker) I am Richard Bowker, Chairman
and Chief Executive of the Strategic Rail Authority.
Chairman: Now, Mr Bowker, I am afraid we have
a little bit of housekeeping to perform first. Ms Jackson?
Helen Jackson: I declare that I am a member
of the Transport and General Workers' Union.
Chairman: Mr Stevenson?
Mr Stevenson: I am a member of the Transport
and General Workers' Union.
Chairman: I am a member of the Rail, Maritime
and Transport Workers' Union.
Mr Donohoe: I am a member of the Transport and
General Workers' Union.
Miss McIntosh: I have got interests in Railtrack,
FirstGroup and Eurotunnel.
2. Thank you very much indeed. With that out
of the way, may I welcome you most warmly and ask you if there
is something you would like to say before we begin?
(Mr Bowker) No, Chairman, I am happy to go straight
3. In which case, could I ask you what progress
you have made about franchise replacements, particularly using
your core specifications as a basis?
(Mr Bowker) The progress is quite substantial now.
We have begun the process on a number of franchises, Wales and
Borders, where we have selected pre-qualifiers. We are in the
4. Sorry, three qualifiers?
(Mr Bowker) Pre-qualifiers.
5. I beg your pardon.
(Mr Bowker) We are in the process of doing likewise
for the Northern Rail franchise. We have also announced recently
that we are beginning the process on the Greater Anglia franchise.
The core specification documentation is in its final stage of
preparation and with Wales and Borders we shall shortly be making
that documentation available to the pre-qualified bidders.
6. You have got a specific suggestion on the
Northern Rail franchise. How long is it going to take for the
whole procedure, do you think?
(Mr Bowker) On the Northern franchise we are hopeful
that a preferred bidder could be announced in around January or
February 2003 with a new franchise agreement in place in March
7. Can I just follow on from that, please. You
have now confirmed that Arriva Trains will be penalised for poor
performance. What benefit will the travelling public in the north,
my constituents, get from that penalty?
(Mr Bowker) The process of fining Arriva Trains North
was quite a complex one. They have had to provide a quarter of
a million pounds of passenger benefits on their franchise for
every four weeks of the reduced services that they have had.
8. In what way will the passengers benefit?
(Mr Bowker) The passenger benefits which we are working
through in Arriva will flow through into direct tangible things
that passengers will experience.
9. What tangible things are we looking at?
(Mr Bowker) We have not finalised what they may be.
10. How will they benefit from that quarter
of a million pounds?
(Mr Bowker) The other thing we are also doing is they
are now required to get their driver stock up to the full establishment
level and that will ensure that they will continue to run the
full service that is expected.
11. And you have ensured that those are not
stolen off any other companies in the area, have you not?
(Mr Bowker) The proposal that we have from Arriva
requires them to get their own driver training establishment back
up, so it is their own internal training process.
12. One of the conditions of the penalty was
that the reduced timetable should be withdrawn. What is the situation
(Mr Bowker) The timetable will be restored to its
full service as part of the enforcement regime.
(Mr Bowker) The date on that is soon. I need to come
back to you with a precise date.
14. That is not good enough. Last time you were
here I pressed you again about the expenditure in the north compared
with the south and you advised the Committee that was because
of the fact that there was a great deal of pressure from passengers
in the south and I made the remark that my constituents are just
as important as anyone else in this country. I am not satisfied
with the response that you are giving today, I want some more
(Mr Bowker) Could I say, Mr O'Brien, that the SRA,
and I personally, share that absolutely. There is no differentiation
between passengers irrespective of where they live. We treat the
franchisees the same and we expect them to deliver a high quality
of service to all passengers irrespective of where their locality
15. How bad will Arriva have to proceed with
their services before you withdraw the franchise?
(Mr Bowker) There is a stipulated process which requires
if there were failures in the franchise they were to have call-ins
and if they persisted in that there is a process for going through
to breach and they could end up in default of the franchise.
16. We have had this situation in the north
now for nigh on two years. How bad will the service get to people
in the north of England before you withdraw the franchise?
(Mr Bowker) If I may answer that in two parts. We
have to do what the contract currently permits us to do. We cannot
act in a way that is outwith the contractual arrangements that
I inherited. We will seek to enforce those. We are not going soft
on franchisees and, indeed, I think the Arriva example shows a
situation where we are prepared to use the enforcement and penalty
powers. The second part of the answer is what we are really keen
to do is move on from the contracts we currently have into a new
franchise for Northern Rail where we can restructure the franchise
agreement such that it is more focused on delivery of service
to passengers and we intend not to be in this position again.
We cannot do what we do not have powers to do.
17. Having been given notice by the SRA that
if they do not improve the performance then the franchise could
be withdrawn, when do we follow that notice up?
(Mr Bowker) We have given Arriva notice that we consider
what happened to be unacceptable, that is why they have been fined,
and we will use the full force of the contract if it is necessary.
18. You have made it quite clear that you would
regard compensation to the passengers as being the quid pro
quo for those fines because also you are going to fine them
if there is a problem with the drivers, so we are talking of quite
large amounts of money, and you would expect under the new set
of circumstances to produce practical results for the passengers?
(Mr Bowker) I think that is absolutely right. One
of the reasons why we did the drivers' fine, for example, a £5,000
per driver per month that they fall short of the target they have
been set, was because that is what actually impacts on the passenger.
If there are no drivers, no train, that is where they suffer.
Rather than just hit them with a fine what we have done is we
have locked it into incentivising them to do what we want, which
is performance for the passenger.
19. Could I just follow that. Is the SRA working
to make conditions in the light of the experience we have had
in the north so that the franchise can be withdrawn easier if
the franchisees do not perform and provide the service for the
(Mr Bowker) All my experience, Mr O'Brien, with contract
management, which is what these franchises are, is that if you
start the contract relationship on a "we will hammer you
if you do not perform" you get poor performance, it drives
poor performance, it creates poor behaviours. What I am seeking
to do is to create new franchise agreements which actually mean
that the SRA and the franchisee work together incentivised to
deliver better performance. That does not mean a soft contract.
We will use the enforcement regimes and if necessary, if the circumstances
are right, we will remove franchises. That is our power and that
is what we will do. I am not seeking to start from a position
to make these franchises easier to take away, what I am trying
to do is to make these franchises designed to do what we all want,
which is the right service for the passenger.