Tuesday, 7 December 2010

Philip Hammond delivers a Curate's Egg?

Cautious congratulations to the Rt Hon Philip Hammond MP for today's announcement on restructuring the industry.

In particular his decision to chair the new High Level Group tasked with examining:

"...the options for getting those responsible for track and train to work together to drive down the cost of the railway for the benefit of passengers and taxpayers, while improving the quality of services."

Two wins here.

Philip Hammond has put his personal reputation for delivery on the line. It will not be an easy task corralling and refocusing all the vested interests that benefit so much from today's bloated industry structure.

Secondly, and no less importantly, Mr Hammond has decided not to entrust leadership of the HLG to a civil servant.

Mandarins, by their nature, like to accrue power.

By taking political leadership of the HLG Mr Hammond appears to believe it will have a finite life.

Once it has delivered the industry's new structure it can cease to exist. Allowing the railway to manage its own affairs, within parameters, but without micromanagement.

So far, so good.

However, it is worth remembering that when the Tories were last in power they gifted the country the dysfunctional and costly railway we have today.

Whilst applauding the future direction outlined by the Secretary of State, Eye hopes he is able to learn from the mistakes of the past.

Virgin plans Chunnel service to Serbia - Shocker

This from Manxman...

I thought Railway Eye readers might enjoy the below, spotted on the side of a Virgin Voyager at Crewe last Thursday morning.

Travelling 1,100 miles with an underfloor engine? Lovely!

Hammond to chair HLG to drive down costs

This Written Ministerial Statement from the Secretary of State...

The Secretary of State for Transport (Mr Philip Hammond):

This Government is determined to secure a sustainable and efficient railway. The Spending Review settlement has demonstrated our commitment to rail transport. The sustained financial support we have offered now needs to be matched by a relentless drive for efficiency on the part of the industry

Sir Roy McNulty's value for money review has reached some important interim conclusions. In his interim report being published today and being made available in the Library of the House he finds that:

  • the railway is costing more than it used to and more than it ought to. Greater efficiency would realise savings of £600 million - £1,000 million per annum by 2018-19 without cutting services or lowering quality;
  • the key to securing these efficiencies is a cross-industry focus on reducing costs and improving value for money;
  • that in turn demands closer working and alignment of incentives between train operators and Network Rail and strong leadership across the industry. Inevitably, such alignment, if it is to be effective, will involve Network Rail working more closely at a local level with Train Operators.

The most pressing need is to ensure that incentives across the industry are aligned, so that all parties strive to improve the quality of services and to provide value for money for taxpayers and passengers. Train operators are too narrowly focussed on franchise specifications (which are often over-detailed). Network Rail has concentrated on network performance and safety targets. These are important objectives. But there is no cross-industry focus on the fundamental purpose of the railway - moving people and goods efficiently across a network while securing the best long-term value for money for farepayers and taxpayers.

The second phase of the value for money study will focus on identifying opportunities for greater alignment and changes that will secure greater efficiency and better value for money. Sir Roy’s final report is due to be published in April 2011. These initial conclusions, however, are so important that it would be wrong to wait until then before starting to respond.

Today I am announcing the establishment of a high level group, which I will chair, that will examine the options for getting those responsible for track and train to work together to drive down the cost of the railway for the benefit of passengers and taxpayers, while improving the quality of services. Sir Roy McNulty’s final report will inform the group’s work.

This group will consider options for structural reform in the industry. My presumption is that, at an operational level, there are some network-wide planning and technical functions which can only be discharged by a single national body, acting as custodian of the network. That should not preclude reforms which allow route or area based alliances to be established, focussed on aligning specific track and train operations where this best serves the needs of customers.

I am clear, however, that no changes should be made which would jeopardise the impressive improvements in safety and punctuality achieved across the industry in recent years. There is a spectrum of options which could contribute to achieving a better alignment of incentives. We expect that the optimal solution will vary for different parts of the network, reflecting the diversity of our railways and differing local needs. A one-size-fits-all model is unlikely to be the right solution. I am also clear that the changes we are proposing must protect the interests of freight operators on the network.

I envisage that this work will lead to the publication of proposals for industry reform by November 2011 - as set out in my Department’s Business Plan.

In parallel with the value for money review, my Department has been consulting on possible changes to the franchising system. We have invited views on moving to longer franchises with less detailed specifications and greater incentives for operators to act efficiently and invest in the improvements passengers want. These principles have been widely welcomed and they will form part of our plans for making the railway more efficient and more responsive to passengers’ needs.

However, franchising reform needs to be coordinated with Network Rail reform: they are two sides of the same coin. We also need to co-ordinate the programme of franchise renewals to take account of major planned railway projects which will inevitably disrupt operations in certain franchises.

A number of franchises will fall due for re-tendering over the next couple of years. Because we intend, typically, to let longer franchises of at least 15 years duration it is important that the reforms we wish to make following the McNulty review, the franchise consultation and the work of the high level group are incorporated into the terms of these franchises.

I therefore propose to use a short contract, openly competed during 2011, to run and improve services in the Greater Anglia franchise whilst we carry out this work. I then expect to award a new long term franchise for the operation of services in East Anglia to commence in 2013. In 2012, I propose to award a franchise to operate Inter City West Coast until the planned opening of HS2 in 2026. Then, in late 2012, I propose to award a franchise of 15 years to operate the East Coast Main Line services.

The rest of the retendering programme for 2012 and 2013 will depend partly on decisions by my department and existing operators on the termination dates of current franchises. We also need to avoid overloading the industry by inviting too many tenders at the same time. The Trans Pennine Express franchise could contractually be extended by up to five years beyond 2012: my department is discussing a proposal for an extension with the current operator. Alternatively, this franchise could be retendered for at least 15 years, possibly in 2013 alongside the Northern franchise. The Essex Thameside franchise will also be retendered by 2013 for at least 15 years. The Greater Western franchise will be retendered in either 2013 or 2016, again for at least 15 years, upon expiry of the existing franchise agreement in accordance with its terms. In the case of Thameslink and South Eastern it is not currently appropriate to let long-term franchises, since both will be heavily affected by Thameslink work at London Bridge station. So these franchises will be retendered on a short-term interim basis as they fall due. My department will then let long-term franchises to cover the operation of Thameslink and South Eastern services, once the London Bridge Station reconstruction is complete.

- ENDS -


ATOC emasculates the All Line Rover

Good news from ATOC!

From January the All Line Rover, much used by the Noble Lord on his Pilgrimages of Grice, will have early morning restrictions placed on its use.

This from RailUK...

An ALR will not be valid on Mondays-Fridays for boarding or alighting train services operated by CrossCountry, East Coast, East Midlands Trains and Virgin Trains before 10.00 Mondays – Fridays at Birmingham New Street, Bedford, London Euston, London Kings Cross, London St Pancras, Luton, Luton Airport Parkway, Milton Keynes Central, Stevenage and Watford Junction.

Needless to say the price will not be reduced to reflect this loss of flexibility.

According to posts on Twitter these peak restrictions effectively increase the price of the ALR by around 10-15% - that on top of a 15% increase introduced last year.

Regular readers will be aware that ATOC tried to introduce similar restrictions earlier this year, but following an outcry Bernard Street quickly relented.

No such worries this time round.

These restrictions are hardly likely to inconvenience Petrol-head, as he speeds about the country in his Jag.

UPDATE: This from Billy Connections...

So on the Virgin Trains restrictions I can't BOARD at Birmingham New Street but I can at Wolverhampton or Coventry or Birmingham International…??

Same for CrossCountry…??

I hope the grippers are quick or there could be a lot of confusion!

Rent-a-quote restored!

Telegrammed by Leo Pink
How good to see that Rupert Brennan-Brown and his amanuensis, Financial Times Transport Correspondent Robert Wright, are back together again in today's paper.

But what's this?

The bi-monickered one is referred to as a 'rail industry observer'.

Does the dropping of the once obligatory sobriquet 'veteran' give a hint to the real reason for the brief separation? After all the FT is the paper of the ambitious young turks in the City.

Liberal application of Grecian 2000 and some sharp new threads seem to have restored the quote-meister to favour.

UPDATE: This from a Mr Robert Wright (for it is he)...

Since everybody knows smoking ages a person, Rupert Brennan Brown is probably younger than he looks (as indeed am I, although I don't smoke).

But I did originally use the term veteran.

Some person with no sense of history must have taken it out.

UPDATE: This from the soi disant 'veteran' observer himself...

I do read this stuff you know and I don't think it's very clever or funny.

I particularly resent Pink's suggestion that I resort to dying my ha...
(sadly owing to pressures of space Eye is unable to publish the rest of this email from the soi disant Grecian 2000 user. Ed)