Memorandum by the Greater Manchester Passenger
Transport Authority and Executive (RI 22)
1. Greater Manchester Passenger Transport
Authority (GMPTA) and the Greater Manchester Passenger Transport
Executive (GMPTE) welcome this opportunity to present joint evidence
to the Sub-committee's Inquiry into "Rail Investment: Renewal,
Maintenance and Development of the National Rail Network".
2. Evidence is presented separately by the
Passenger Transport Executive Group on behalf of all Passenger
Transport Executives. That evidence is endorsed as adequately
representing our general position but it was considered important
to provide additional evidence based specifically on the situation
3. Our evidence is based on our experiences
as co-signatories to two existing franchises, First North Western
and Northern Spirit and our responsibility to develop the local
rail network in accordance with the policy of GMPTA.
4. GMPTE/A have experienced difficulty in
working with Railtrack to jointly develop the local rail network.
This particularly relates to uncertainty over what Railtrack will
fund and in particular, the interpretation of the phrase "modern
equivalent" replacement. This lack of clarity has made it
very difficult to commit public money to schemes in a way which
would enhance investment in the local railway system.
5. Our objective was to develop joint schemes
with Railtrack and the Train Operating Companies, primarily to
improve passenger facilities at stations. There was general concern
about investing public money in a privately owned asset but it
was considered that if a transparent funding agreement could be
achieved that this would enable funds to be released without concern.
6. Unfortunately, the lack of any clear
definition of what constitutes the modern equivalent form in terms
of replacing an existing asset has meant that each scheme has
presented a new negotiating opportunity. This has made it very
difficult to develop a rolling programme of jointly funded improvements
and perhaps has prevented the significant benefits which could
have been achieved by pooling resources.
7. To some extent, this situation has been
exacerbated by the erratic implementation of the Station Regeneration
Programme (SRP) in this area. This seems to have arisen from difficulties
with contractors and concern about budget provision. Railtrack
are now focused on completing the programme by the end of this
financial year to meet the Rail Regulator's directive. GMPTE/A's
strategy was to use the Railtrack SRP work as a base on which
it would be possible at the same time to implement the franchise
agreement commitments of the TOCs and, if necessary, enhance these
works with PTA funds to significantly improve facilities at all
stations. Unfortunately, this has not been possible and there
are concerns that undertaking work in a fragmented fashion will
increase the overall cost of comprehensively improving stations.
8. Without a clear understanding of Railtrack's
responsibilities and commitments it will always be difficult to
successfully implement partnership funding of railway schemes.
9. GMPTE/A have concerns about the impact
of Railtrack schemes in the future for local rail services. This
in particular relates to the Manchester South element of the West
Coast Main Line upgrade works. Together with First North Western,
the predominant local train operator, we have expressed our concern
that the eventual scheme will not provide enough capacity to accommodate
local services specified in the existing Passenger Service Requirement
(PSR) or give scope for a reasonable expansion of services other
than those on the West Coast Main Line.
10. It is for this reason that GMPTE is
joining with the Shadow Strategic Rail Authority (SSRA) and Railtrack
to undertake a study into the capacity needs of the Greater Manchester
Rail Network which is intended to inform Railtrack's 2001 Network
Management Statement. The lesson for the future would seem to
be that major schemes must be developed on an inclusive basis
by Railtrack and not focus on the needs of the major funder to
the detriment of other parties. To some extent, the needs and
funding strategy of longer-term franchises such as Virgin Trains
have dictated Railtrack's priorities and hopefully the franchise
replacement process currently being implemented by the SSRA will
address this by extending franchise terms up to 20 years.
11. The Rail Regulator appears to be implementing
adequate measures to effectively oversee and incentivise Railtrack
in regard to investment and performance. We would suggest that
the format of Railtrack's Network Management Statement should
become more relevant to reporting progress against the Rail Regulator's
12. It is our view that a mechanism must
be established to encourage outside funding partners to invest
in the improvement of the railway network. It is accepted that
Railtrack has a clear mechanism for investing in the "commercial"
schemes but without a better arrangement for encouraging outside
investment it is difficult to envisage how investment in the "social"
railway will be facilitated in sufficient volumes to meet the
need to upgrade what is essentially a Victorian railway.
13. GMPTA/E have been developing a number
of schemes with Railtrack to improve passenger facilities at stations
and in some cases build entirely new stations. In each case development
of the scheme has been lengthy, confusing and with original estimates
being grossly exceeded and unnecessary delays and complications
introduced. Our view is that PTE/As and local authorities should
be positively encouraged to work as funding partners with the
railway industry to achieve the aspirations contained in Local
Transport Plans. It should be remembered that funds available
to these bodies are not ring fenced for rail schemes and there
is a risk that if it continues to be difficult or represent poor
value for money to invest in rail infrastructure improvement,
this money can be used on other means of improving public transport
14. Simplification of the investment process
and developing a means of ensuring that Railtrack presents an
attractive and cost effective route to invest in improving public
transport, should be high priorities for the SSRA to ensure that
local funds can be directed into improving the local rail network.
15. Experience as co-signatories to two
existing franchises has shown the pitfalls of expecting train
operators to invest in a rail network which is essentially performing
a social need and where there is little additional revenue to
reward investment. The tendency has been for the TOC to pay lip
service to their franchise plan commitments and use the admittedly
loose wording of the franchise agreement to do the bare minimum
to meet their obligations.
16. It is suggested that franchise agreements
be more specific in terms of outputs or that franchisees be committed
to contribute a specific sum of money to a scheme which is being
developed by the SSRA or PTA/Es. To some extent, the current difficulties
have arisen from the poor returns on capital investment which
can be had in a short-term franchise and the failure to recognise
that where subsidy is the predominant source of funding the TOC
will have little incentive to improve or maintain passenger facility
quality. With hindsight, it was inappropriate to give the TOC
the responsibility to invest in such systems as passenger information
provision which would last a lot longer than the franchise and
perhaps would have been a more appropriate responsibility of Railtrack.
17. We trust that the evidence provided
is helpful and that it will aid your Inquiry and lead to an improvement
in reviewing, maintaining and developing the rail network.