Memorandum by Railfuture (Railway Development
Society) (PRF 51)
FRANCHISING AND THE ROLE OF THE SRA
1. The SRA must act strategically. It must
give leadership in formulating the long-term future structure
of the industry. It should undertake or commission the necessary
research and planning, and help to progress proposals from the
industry, local and regional authorities and private developers,
to enable the railways to meet the objectives of the government's
10-year transport plan.
2. The SRA must address the need for more
capacity, promote integration not only within the railways but
also with other transport modes, and address issues of energy
efficiency, sustainable development etc. It should promote best
practice in planning and operations, and identify centres of excellence
to guide all TOCs, local and regional planning authorities, scheme
promoters and developers.
3. The government should set policy and
leave the SRA as much flexibility as possible to implement it.
4. Franchising policy must at all times
have regard to the need to provide for and encourage long-term
investment planning by franchisees. Too long franchises risk fossilising
the system and protecting failed operators, but too short franchises
render innovation difficult and serious investment impossible.
5. The number and extent of franchises needs
to be reviewed, and reduced to perhaps as few as a third of the
present number (see point seven under Railtrack). Other fundamental
problems of the franchising system, such as "lame ducks"
and the transfer period, may also need addressing. Franchisees
need to address all aspects of their operation (urban, interurban,
rural, long and short distance), not concentrate exclusively on
the more commercial or mass-market elements.
6. The SRA should be encouraged to include
measures in franchise specifications which will encourage the
integration of the rail network and the presentation of a single
face to the user. This applies especially in the field of fares
and ticketing. Innovation in discounted fares (Apex etc) is welcome,
but walk-on fares must conform to a simple, common, easily understood,
7. Performance regimes must strike a realistic
balance between safety and performance. Monitoring should be people-focussed,
not train-focussed, taking account of intermediate arrival times
and lost connections. This implies more thorough survey work.
THE FUTURE OF RAILTRACK
1. The interests of (current) shareholders
must not be permitted to take precedence over the public interest
of the users of the railways, and the community as ultimate stakeholder.
Landholdings with operational value (existing or potential) must
not be disposed of to recompense shareholders.
2. A distinction ought to be made between
different groups of shareholders. Railtrack staff who took up
share options surely deserve proper compensation. At the other
extreme are the large corporate shareholders who could reasonably
have been expected to foresee the collapse had they taken more
interest in the company beyond its role simply as an investment
vehicle. In between are other individual investors and groups
such as ourselves, most of whom took a stake because they believed
in the railwaysand indeed regularly attended AGMs. These
probably have smaller stakes than the staff, but still deserve
a fair settlement. In law however, this distinction may be difficult
3. The government cannot avoid being underwriter
and ultimate guarantor of the railways. "Allocation of risk"
is therefore largely an academic question.
4. A comprehensive review of the structure
of the industry cannot happen unless the issue of Railtrack and
the issue of franchising policy are tackled simultaneously. That
opportunity now exists and must be grasped. Such a review must
also cover regulatory bodies (SRA, ORR) and safety bodies, as
well as the level of access charges.
5. A key recommendation of the Cullen Inquiry
report is that a new public, executive body be set up to take
over (inter alia) the functions of Rail Safety Ltd. Such a body
could be in a position to take on other operational responsibilities
from Railtrack, as suggested by Rayner Marshall and Bell in a
recent paper on rail safety.
6. The government should consider vesting
the ownership of the network (and operational land) in the state
in the form of the SRA, in the manner that the road network is
owned. This might be a trade-off for underwriting a more generous
settlement for shareholders.
7. There appear to be two options for reintegrating
the infrastructure maintenance function of Railtrack with the
train operations. One is a not-for-profit trust on which the train
operators (and other stakeholders) are represented. This is perhaps
the "least change" options, but might produce a rather
unwieldy board given the large number of operators etc. The alternative
is that franchisees take over (gradually) the responsibility for
maintaining infrastructure on designated parts of the network.
This offers better "vertical integration" but presupposes
a considerable reduction in the number of operating units to something
like the old regions, and control functions such as pathing, timetable
planning, signalling etc becoming the responsibility of the new
body mentioned in five above. Special arrangements may be appropriate
to certain local networks such as Merseyrail, and safeguards needed
for Cross-country and freight.
8. Stakeholder representation on any non-for-profit
trust should include non-statutory users' bodies, such as RDS