Memorandum by The Fast Tracks to Europe
Alliance (RES 5)
REGIONAL EUROSTAR SERVICES
1.1 The Fast Tracks to Europe Alliance (FTEA)
welcomes the opportunity to submit evidence to the House of Commons
Transport Sub-Committee Inquiry into Regional Eurostar Services.
The grouping is a broadly based one with a membership throughout
Britain including chambers of commerce and business leadership
groups, some individual firms, many local authorities, trade unions,
and transport and amenity group (Annex 1 gives further information).
It was brought into being in February 1998 by the crisis over
the funding and future of the Channel Tunnel Rail Link. It is
campaigning for the development of fast, quality links into the
European high speed rail network for both passengers and freight
and for all regions of Britain.
1.2 The initial objective of the FTEA is to
achieve the building of the Channel Link as planned in the 1996
Act with the incorporation of the Stations at Ebbsfleet, Stratford
and St Pancras and link to the West Coast Main Line as the essential
element enabling future development.
1.3 Since its launch, FTEA has furthered the
case for the CTRL by commissioning its own research and publishing
its findings. It has sponsored seminars, briefings for Ministers,
and Shadow Ministers MPs, MEPs and EU Transport Commissioner,
Neil Kinnock and held a "solutions forum" with London
First and Thames Gateway London Partnership. It has held a series
of fringe meetings at political party conferences.
1.4 The Alliance welcomed the rescue plan for
the CTRL announced by the Deputy Prime Minister, Rt Hon John Prescott
MP at the beginning to June 1998. However, almost all the benefits
of the CTRL in terms of integrating the UK regions into the European
high speed rail network, thereby enhancing UK competitiveness,
and the freight, regeneration and commuter benefits are only achieved
if the second stage or phase of the CTRL, that from North Kent
through Ebbsfleet, Stratford and into the St Pancras terminus
is built. FTEA has continued to meet with Ministers, MPs and the
privatised rail operators, among others, and to liaise with interested
local authorities and organisations to make representations to
ensure this second stage of CTRL goes ahead.
2. FTEA WORK HIGHLIGHTING
2.1 Among the studies specially commissioned
by the Alliance was a report by the Local Futures consulting group
on "The impact of CTRL on the regions north of London".
A summary of key points and "messages" from this study
is attached as Annex 2. In essence, the report set out the benefits
in terms of improvements in economic competitiveness, social cohesion
and environmental sustainability which linking the regions into
the European high-speed rail network via the CTRL and its associated
stations would deliver.
2.2 At a seminar to launch this report in July
1998 attended by MPs, businessmen, trade unionists, representatives
of regeneration partnerships and transport organisations, it was
agreed that the case for regional services as part of the integrating
facilities offered by the CTRL is a strong one. It was resolved
to campaign to bring them into being.
2.3 To be better informed of the issues and
possibilities involved, representatives of the FTEA met separately
with executives of Virgin Trains, the Consortium which has been
awarded the franchise until 2010 and operational directors of
3. FTEA AND THE
3.1 When the Secretary of State announced that
he was asking the Consortium to undertake a review of the feasibility
of regional services and to report back before the end of the
year, there was immediate concern among FTEA members.
3.2 This was because the Consortium's expressed
priority is to develop the inter-capital services, and possibly
to explore extending these to Heathrow. We doubted their ability
to be objective as there is no synergy between their business
plans and the rationale for developing international services
to the regions.
3.3 What is known of the business approach likely
to be adopted by the Consortium compounded this concern. Their
focus is likely to be on the premium business traveller market
and the emphasis on rigorous cost control to improve cash flow.
They are understood to be remunerated for managing Eurostar services
in two ways: with a management fee related to turnover and an
incentive package related to improving cash flow. Except in the
impact it has on improving turnover and cash flow, the agreement
is not affected by the timely opening of the CTRL or otherwise.
There is no requirement within the agreement to build a wider
market for Eurostar services or deliver social benefits such as
might flow from developing services to the regions.
3.4 While it is perfectly legitimate for a private
company to focus mainly if solely on maximising profits, when
there is a substantial public subsidy, it seems to us entirely
justifiable to expect clear public benefits for this contribution.
There is a very large contribution to the CTRL project from the
UK taxpayer. Billions of pounds worth of public assets were leased
or licensed to London and Continental Railways (LCR), there are
elements of Government guarantee and underwriting in many key
elements of the Development Agreement and there are large capital
and revenue subsidies involved. Much of this public subsidy to
L&CR and Eurostar is contributed by taxpayers from the regions
beyond London and the South East. There is an understandable view
among our members that foremost among public benefits we should
expect are regional services which link the UK's regions into
the fast developing European high speed rail network and thereby
delivering the benefits as set out in the Local Futures report.
3.5 In addition, both the Channel Tunnel and
Channel Tunnel Rail Link Acts were seen as national projects providing
an infrastructure to assist the development of the whole country.
In the late 1980s "Section 40" groups (so named because
of the relevant part of the Channel Tunnel Act) involving local
authorities, business organisations, trade unions and voluntary
groups did much hard work to show how different regions could
take advantage of the links to the Channel Tunnel. MPs from all
parts of the UK gave an easy passage for both these Acts in the
expectation of attaining such benefits. Considerable disillusion
has resulted from the failure to deliver any Eurostar regional
services to date, even though train paths for these are maintained
in the timetable and other trains held back as if they were running.
The fact that only 50 per cent of the Eurostar train sets costing
of the order of £26 million each are in operational use and
some are depreciating in sidings in Warwickshire only serves to
stoke the anger of people in the UK regions. Quite simply, they
believe they have an unanswerable moral case for Eurostar services
to be provided at the earliest opportunity.
4. RESPONDING TO
4.1 You asked for the views of the FTEA on four
specific issues. Here is our response on each of these:
Q1. What technical hurdles still need to be overcome
before Eurostars are able to operate on the West Coast Main Line
Within the considerable expertise available
to the FTEA there is unanimous agreement that there are no technical
hurdles to be overcome before the Eurostars are able to run on
the WCML. The associated WCML group also tells us there are none
they are aware of. Trial services of Eurostars on the WCML have
been underway for several months now and there has been no suggestion
or statement that they could not go into full operation.
Q2. What are the commercial prospects for Eurostar
operations north of London
The FTEA is of the view that exploiting the
wider passenger market north of London is vital if Eurostar is
to operate a financially viable service. Undoubtedly, when the
whole CTRL is built and it reduces most journeys times from the
regions by an hour, this will increase demand from areas north
of London. However, there is something of a "chicken and
egg" situation hereunless demand for regional Eurostar
services is developed there is a risk some will argue demand does
not warrant the building of stage two of the CTRL. However, stage
two of the CTRL delivers other benefits within the context of
an integrated transport policy such as new capacity for commuter
services and for freight on the existing lines which the redirection
of these commuter trains will free up. There are benefits to UK
plc which go beyond the viability of services run by individual
train operating companies. Nonetheless, Virgin Trains have argued
in their submission that demand for regional services can be built
up such that the services will be profitable at least in the medium
Q3. Have other uses been considered for the regional
The FTEA believes the regional Eurostar trains
should be used for the original purpose for which they were intended.
It does not support their deployment in other than international
services from and to the regions.
Q4. When will a decision be made about whether
Eurostar services will be offered north of London?
The Alliance wants to see regional Eurostar
services operating at the earliest opportunity. They are already
long overdue. The Virgin proposal shows one train operator is
ready to enter this market. Their business plan proposes two trains
per day to and from Manchester via Birmingham, five trains per
day to and from Watford which would become the international hub
serving the WCML, together with a daily service from Glasgow via
Edinburgh and the East Coast Main Line. This could open up the
market north of London as well as strengthen the London/South
East market. They estimate that their five trains a day would
link into 20 regional stations and give the opportunity through
cross platform interchange to take passengers from 100 major conurbations.
It would, of course, necessitate Virginor any other operator
which may come forwardhaving the use of Regional Train
sets which are currently not in use. Our understanding is that
the contract between the Consortium and LCR to manage the inter-capital
Eurostar services should not preclude another TOC such as Virgin
being awarded the franchise to deliver stand alone Eurostar services.
We believe theyor others willing to take the risk should
be given the opportunity to deliver regional Eurostar services.