Supplementary Memorandum by Stagecoach
Holdings Plc (IT 159A)
INTEGRATED TRANSPORT WHITE PAPER
Thank you for your letter. I shall respond to
each of your points in turn with respect to our rail services:
1. GROWTH IN
Our rail passenger volumes are significantly
dependent on the economy. In the case of South West Trains, our
peak volume tends to follow Central London Employment trends.
Our off-peak markets are also affected by rates of consumer spending
Over the next five years, we expect passenger
volumes on South West Trains to grow by around 6 per cent (up
to 3 per cent growth per annum) which includes peak volume growth
of around 4.5 per cent. This includes the effect of the opening
of the Jubilee Line Extension which will improve access from Waterloo
to locations in Westminster and Docklands.
This estimate is based on modelling of the different
factors which impact on passenger volume at South West Trains,
using external consultants' assessments of economic factors where
We expect that around 45 per cent of this growth
will come from inter-urban markets with the reminder from intra-urban.
Similarly, around 60 per cent of this growth are likely to be
new rail users (or lapsed, with travel dependent on the economic
cycle). Around 40 per cent of the growth will be additional journey
by existing users, primarily leisure and business journeys rather
With regard to meeting the demand, we currently
have proposals awaiting approval by the Rail Regulator to increase
our main line off-peak services. This will increase the number
of off-peak trains per hour from Southampton to London and Portsmouth
to London from 3 to 4. We hope to start these additional services
from the May 1999 timetable change, however, this is subject to
the Rail Regulator and OPRAF approving our plans.
With respect to our peak markets, we are significantly
constrained by the infrastructure at Waterloo station. We believe
that the station is probably operating at capacity, both in terms
of the number of trains at peak times and the length of those
trains (only a certain number of platforms can accommodate 12
coach trains). We have asked Railtrack to undertake two separate
feasibility studies into increasing the capacity of our suburban
network and increasing the capacity of Waterloo station itself
and we hope that they will be able to provide us with a report
of their findings early in the New Year. In the meantime we are
investing £90 million in 30 new 4-car trains which will have
high-density seating and be able to carry a greater proportion
of standing passengers. I anticipate that these trains will enable
us to meet a signficant part of the extra peak demand when they
are introduced into service (by Summer 2000 subject to testing).
The specific obstacles to meeting increases
in demand include:
Capacity of track and platforms,
particularly at Waterloo and within the Greater London area.
Our "Mark 1" rolling stock
is of low capacity compared to modern stock.
There is limited land available around
our stations to expand our car parks to encourage park and ride.
Many of our existing car parks are at or near capacity and car
park expansion is an important strategic issue for train companies
wishing to grow off-peak travelan issue which is frequently
We hope that we will be able to secure an extension
to the South West Trains franchise which will allow us to invest
to address some of these capacity issues.
2. CAR HIRE
At present, car hire is available from Guildford
station (provided by Hertz between 0830 and 1800 Mondays to Fridays).
We have not commissioned any market research into the size of
the potential car hire market. Clearly we are not experts in the
car hire market and our role can only be to assist companies willing
to provide such facilities at our stations and to raise awareness
of these services to our passengers.
3. BUS PATRONAGE
Future bus patronage is very dependent on Government
transport policies, the effect of congestion, car ownership, and
the level of support for bus services by local authorities together
with the progress they make in implementing bus priority schemes.
In recent years Stagecoach has been able to
"buck the trend" of static or declining bus passenger
volumes by its policy of investment in new vehicles, and development
of new services such as our "Stagecoach Express" inter-urban
network and new pricing initiatives such as our "Megarider"
network tickets which are priced to make public transport affordable.
These and other initiatives enabled us to achieve patronage growth
of 1.6 per cent in 1997-98 and we hope to build upon these successes
in the future, with a further boost from the implementation of
Increases in demand for bus services can easily
be met by investing in additional new buses, or slowing the rate
of withdrawal of older buses. Stagecoach companies are already
running substantial extra numbers of buses over those operated
at the time they were acquired by the Stagecoach Group.
The main obstacle to meeting increases in demand
is growing traffic congestion, which can make it uneconomical
to provide extra buses. For example, if a service runs every 10
minutes and the journey time from end to end is 28 minutes each
way, 6 buses ae needed to operate the service. If the journey
time increases by 30 per cent due to congestion, 2 more buses
will be needed without any extra revenue being obtained. If passenger
volume grows, more buses will be needed anyway and the effect
of increasing congestion will be even greater.
29 December 1998