Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence


Memorandum by The Fast Tracks to Europe Alliance (RES 5)

REGIONAL EUROSTAR SERVICES

1. INTRODUCTION

  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 THE IMPORTANCE OF REGIONAL SERVICES

  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 Railtrack.

3. FTEA AND THE REVIEW OF REGIONAL EUROSTAR SERVICES REQUESTED BY THE SECRETARY OF STATE

  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 THE SPECIFIC POINTS OF INTEREST TO THE SELECT COMMITTEE

  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 here—unless 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 term.

Q3. Have other uses been considered for the regional Eurostar trains?

  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 Virgin—or any other operator which may come forward—having 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 they—or others willing to take the risk should be given the opportunity to deliver regional Eurostar services.


 
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