Memorandum by First (REN 10)
NORTH OF ENGLAND RAIL SERVICES
1. FIRST
1.1 First is one of Britain's foremost public
transport companies. It is the UK's largest bus operator, running
more than 20% of the country's services, and with networks in
more than 40 towns and cities. It has three franchises, First
North Western, First Great Western and First Great Eastern, together
forming about 15% of the rail passenger market. First operates
the highly successful Croydon Tramlink in South London. In the
United States, First is the second-largest school bus operator,
and the third-largest in Canada. The company is a major supplier
of public transport contracting and management, and the largest
private-sector provider of vehicle maintenance in the USA. The
company's annual turnover is more than £2 billion.
1.2 In the past few years, the group has
been growing fast, bringing together new companies and cultures.
Its vision is to Transform Travel using a common brand and values
to become the number one public transport provider based on safety,
reliability, high quality, integration, accessibility, and putting
the customer first.
1.3 Safety is its number one priority.
2. FIRST IN
THE NORTH
2.1 The company is proud to be a major transport
operator in the North, with a bus network serving many towns and
cities in West and South Yorkshire, Greater Manchester and other
parts of the region. This is complemented by First North Western,
a rail franchise based in Manchester. It serves an area stretching
from the Scottish border and Cumbrian coast to North Wales, Derbyshire,
and South Yorkshire. It also runs some trains to the West Midlands
from Manchester and North Wales. Many services are sponsored by
passenger transport executives who set specifications including
fares and frequencies. First North Western also provides longer-distance,
inter-urban services, as well as links to isolated local communities,
many of its services having a social, rather than a commercial,
remit. Having both bus and rail companies in the North means that
First is uniquely placed to develop integrated transport systems.
3. FIRST'S
AMBITIONS IN
THE REGION
3.1 The company is looking to build its
business in the North. As part of the refranchising programme
it is bidding with Keolis, a subsidiary of SNCF, of France, for
the new Trans Pennine Express franchise which will create an inter-city
network. The Strategic Rail Authority is expected to announce
the name of the preferred bidder shortly.
3.2 First is also planning to bid for Northern
Rail, another new franchise, which will run services on behalf
of all five of the region's passenger transport executives, plus
rural and some long-distance trains.
4. FIRST NORTH
WESTERN BACKGROUND
First North Western was formerly part of British
Rail's Regional Railways sector. In February 1997, the franchise
was awarded to Great Western Holdings, which had previously secured
the Great Western Trains operation. FirstGroup acquired Great
Western Holdings in April 1998. In March 2001, at the request
of the Strategic Rail Authority, a deed of amendment was signed,
putting the First North Western franchise on a more realistic
financial footing, and preparing the way for creation of a new
franchise map for the region. Annual losses had been up to £23.5
million. Even the increased subsidy to operate a substantial and
complex network has still fallen way short of the amount needed
to meet the needs of passengers and stakeholders. The franchise
is due to end on 1 April 2004, or earlier, as part of the refranchising
programme, and will be split up to form parts of Trans Pennine
Express, Northern Rail, and Wales and the Borders. Other regional
train operators have renegotiated their contracts to gain extra
subsidies.
5. FIRST NORTH
WESTERN KEY
FACTS
— A subsidy-dependent business with
a cost/revenue ratio averaging 4:1.
— Largely a social railway.
— 1,500 trains a day; 30 million passengers
a year.
— 307 stations; 2,300 staff.
— Average fare £2.19; fares highly
regulated.
6. SAFETY
6.1 First commissioned the du Pont company
to carry out a safety audit and advise on future developments.
As a result, the group has adopted a total safety culture embracing
staff and customers. First North Western continues to put safety
at the top of its agenda. In the year to 31 March 2002, there
were no deaths of passengers, staff or contractors. There was
a significant reduction in the number of Signals Passed at Danger—SPADs—caused
by its train drivers. There were 19 SPADs attributable to drivers
compared to 29 the previous year. This was a 34% improvement compared
to the national improvement rate of 6%.
6.2 Measures to further reduce SPADs are
continuing as part of First's policy of eliminating them totally.
The company safety plan also embraces measures to reduce trespass
and vandalism.
6.3 Each safety plan objective is supported
by specific initiatives championed by a member of the executive
team, and led by a senior manager. A dedicated team of security
officers patrols the network, especially known trouble spots.
6.4 Closed-circuit television, centrally
monitored, has been installed at more than 20 stations. The company
is spending £750,000 a year on security, the total spend
being £5 million since the start of the franchise.
6.5 Class 175 trains have CCTV surveillance
of passenger saloons, to increase security, as well as from drivers'
cabs showing the track ahead.
6.6 Safety advice labels are displayed on
board trains, an initiative pioneered by First.
6.7 An Assaults Working Party is cutting
the number of attacks on staff, against the national trend.
7. PERFORMANCE
Punctuality and reliability expressed in moving
annual averages have increased steadily since the Hatfield accident
and we are confident we can maintain the momentum. The latest
Public Performance Measurement figures—a composite way of
recording punctuality and cancellations—show that in a three-month
period earlier this year, First North Western recorded scores
of 83.9%, 86.3%, and 84.6%. This averaged out at 84.1%, a 16%
rise over the previous quarter, and placed First North Western
as the third-most reliable company in the league of 10 regional
train operators.
7.1 Greater Manchester Passenger Transport
Authority published a statement praising our recent record which
has been better than other regional operators in the North.
7.2 First North Western is part of a complicated
web of companies, with little control over the rail environment.
Its ability to influence Railtrack is very limited, despite paying
£117 million a year in track access charges.
7.3 Many causes of delays and cancellations
have been outside our control, for example, the widespread programme
of temporary speed restrictions imposed by Railtrack following
the Hatfield accident. The ratio showing how many minutes of delay
were caused by First North Western and Railtrack changed as a
result of Hatfield. The average for the year before the accident
was:
| First North Western 49.8%
| Railtrack 50.2% |
The average for the year after Hatfield was:
|
First North Western 42.2% |
Railtrack 57.8% |
In the year following Hatfield, delays caused by track faults
or maintenance rose by 142%, and those caused by signalling failures
by 29%. New class 175 trains, built by Alstom, have been afflicted
by a range of problems, their introduction into traffic being
heavily delayed. This forced the company to continue to run class
101 diesel multiple units which are more than 40 years old, no
suitable alternatives being available on the rolling stock leasing
market. The class 101s are due to be withdrawn from service by
the end of this year.
7.4 Another measure taken to supplement the fleet is
the hiring on short-term lease of five class 142 Pacers. Efforts
are being made to make this a permanent arrangement.
7.5 We have recently hired nine locomotive-hauled coaches
to temporarily take the place of class 175s.
8. THE FLEET
8.1 The new class 175 fleet, which has been well received
by passengers, represents an investment of £77 million. In
addition, a dedicated maintenance depot costing £15 million
was built at Chester. At the time the trains were ordered, they
were the only option available.
8.2 While most of the difficulties with the new trains
are manufacturer-related, and not within the expertise of a train
operator, we have co-operated closely to reduce the severe impact
they have had throughout the region we serve. Staffing at the
depot has increased, and a series of modifications to the trains
is taking place.
8.3 The company fleet comprises:
|
| Diesels | Numbers and formation
| Year built |
|
| Class 101 | 7, two-car units
| 1956-59 |
| Class 142 | 50, two-car units
| 1985-87 |
| Class 150 | 29, two-car units
| 1986-87 |
| Class 153 | 12 single cars
| 1988 |
| Class 156 | 18, two-car units
| 1988-89 |
| Class 158 | 9, two-car units
| 1990 |
| Class 175 | 11, two-car units
| 1999-2000 |
| Class 175 | 16, three-car units
| 1999-2000 |
Electrics
| | |
| Class 323 | 17, three-car units
| 1994-95 |
|
8.4 In 1997 at the start of the franchise, the fleet's
average age was 17 years; today the average is 13 years. Many
trains have been modified and refurbished, some to passenger transport
executive specifications, to improve reliability and comfort including
new seating, and better toilets. Fleet improvements have cost
£6.3 million during the past four years.
9. PERFORMANCE ACTIONS
9.1 Although performance is improving, we recognise that
much remains to be done, and we are continuing to develop new
and more challenging initiatives to add to the many already underway.
Measures so far include:
— Stronger management and control of train crews,
their recruitment and retention, a critical issue.
— Opening of a new train crew training school.
— In the past 18 months, recruitment of 200 drivers
and 100 conductors, against a jobs market in which other operators
can afford higher salaries.
— Strengthening the control office team under a
dedicated current performance manager.
— Creation of a formal internal review system for
any incident causing 500 minutes of delay or more.
— Appointment of customer services managers and
station managers.
9.2 Line managers have significantly cut station delays.
We have been striving to manage incidents more effectively. Not
only are we responding more quickly, we are also reducing the
effects on our services and those of other operators.
10. STATION IMPROVEMENTS
10.1 Stations served and managed by the company range
from unstaffed rural halts to major interchanges such as Manchester
International Airport.
10.2 Twenty-six have been equipped with a new real-time
rail journey information system. Payphones installed at all stations
have an advertised Freephone link customers can use to find out
train-running information.
10.3 The company contributed funds to the rebuilding
of Blackburn station, and, at Carnforth, was a member of a consortium
which refurbished the station and opened a travel centre.
10.4 At many places, passenger information displays and
signage have been improved. So far, £6 million has been spent
on station improvements.
11. INTEGRATION
11.1 First's business strategy is to expand integration
between rail and other forms of travel, and we have introduced
several attractive schemes in the North. The highlights are:
11.2 Centreline/Metroshuttle. A free and frequent
bus link from Manchester Piccadilly station to key city centre
locations. There are plans to add a second route, and introduce
brand-new buses. We are under contract to Greater Manchester PTE.
11.3 City-Rail Link. First operates a similar
service in Chester, under contract to Cheshire County Council.
11.4 Oldham Urban Bus Challenge. We recently won
a contract to provide a bus link, free to passengers with rail
tickets, between Oldham and Broadway Business Park. This is funded
by the government's Urban Bus Challenge via Greater Manchester
PTE.
11.5 Free bus travel from rail stations. We offer
this from Salford to Manchester city centre, from Wigan Wallgate
and North Western to Wigan bus station, and from Rochdale to the
town's bus station. We charge a 50p flat fare for journeys TO
each rail station.
11.6 Add-on fares. Rail passengers travelling
from anywhere in the country to Manchester can use any First bus
service in Greater Manchester on the day of the outward journey
for a £1 supplement.
11.7 We proposed a range of bus add-on fares in our Trans
Pennine Express franchise bid.
11.8 Plans are being developed to offer free bus travel
to rail passengers travelling between Greater Manchester and London.
12. INNOVATION
12.1 Despite facing considerable constraints, First North
Western has sought to bring an innovative approach to running
the business. The boldest venture was to compete with Virgin on
routes between Manchester and London, with bargain fares to attract
leisure travellers. Sadly, engineering disruption related to the
West Coast Main Line upgrade, played a part in reducing demand,
forcing us to withdraw these services. The class 175 fleet was
the first in the country to provide at-seat audio entertainment.
Revenue and passenger numbers have shown major growth since the
start of the franchise, as the table shows:
|
| Fiscal year | £k
| '000 journeys |
|
| 96/97 | 51,268
| 23,712 |
| 01/02 | 64,673
| 29,491 |
| Increase | 13,405
| 5,779 |
| Percentage increase | 26.1
| 24.4 |
|
However, costs, notably train leasing and track access, charges,
have both risen since the start of the franchise. Revenue growth
has been stifled by heavy fares regulation which has effectively
restricted about half of all fares to a formula of RPI minus 1%.
This has led to overcrowding in peak periods.
12.2 Train mileage has risen from less than 15 million
a year to 16.6 million. While the number of employees is currently
less than at the start of the franchise, it has been rising year-on-year
during the past three years. For example, there are now 746 drivers
compared to 654 three years ago.
13. SUMMARY
13.1 First would like to see early decisions on the awarding
of Trans Pennine Express and Northern franchises, and recognition
that passengers would benefit if both were under the same management.
Trans Pennine Express has taken two years of costly effort to
reach a shortlist of bidders. The industry also needs stability.
We call for effective direction and control of Railtrack's successor
so that train operators have full knowledge of where investment
is made, and are assured that the needs of safety and expansion
are fully met. A welcome development would be creation of a sizeable
fund of money, simply administered with minimum bureaucracy, for
improving the railways.
13.2 First has turned around the performance of First
North Western, despite severe funding shortages, and improvements
have been recognised by stakeholders, including Greater Manchester
PTE.
13.3 All franchise commitments have been delivered, except
late delivery of class 175s, an example of an industry-wide problem
blighting the introduction of new trains.
13.4 First wants to play a larger role in the North's
rail network. Its joint bid with Keolis for Trans Pennine Express
will deliver short- and long-term improvements including an attractive
package of investment in new trains and upgraded stations. We
will be enthusiastic and ambitious bidders for the Northern Rail
franchise.
13.5 Our bus operations are a strong advantage in creating
seamless travel.
13.6 Backed by the experience of running Croydon Tramlink,
First is bidding to operate Manchester Metrolink and Leeds Super
Tram.
May 2002
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