Select Committee on Transport Appendices to the Minutes of Evidence

Memorandum by North East Institute of Logistics and Transport (REN 21)



  1.1  The North East of England is here defined as the area from Immingham to Standedge (the Lancashire and Yorkshire boundary) and north to Berwick on Tweed, including the Settle and Carlisle railway line. The territory is defined in this way because it substantially follows the rail franchise map.

  1.2  In this area there are currently four passenger railway operators—Great North Eastern Railway [GNER], which runs services from London to Leeds, Newcastle, Edinburgh and other Scottish cities; Virgin Cross Country [VXC], which runs long distance services from Scotland, the North East and the North West of England to Birmingham, the South and South West of England and South Wales; Arriva North, [AN] which runs the former Regional Railways services in the area, including Trans-Pennine Express services and the intensive electric services in West Yorkshire Passenger Transport Executive area. These three companies are Train Operating Companies [TOC's] In addition there is the Metro service in Tyne and Wear operated by Tyne and Wear PTE trading as Nexus. [Nexus]. The Metro system owns and operates its own stations and a majority of the infrastructure, as well as owning and operating trains.

  1.3  The performance of these four operators will be considered separately, but it should be noted that in many cases they share track, and the poor performance of one operator can and, frequently does, impact on others.. This is particularly evident between Leeds, York and Newcastle, where the use of the infrastructure is shared by GNER, VXC and AN, as well as by freight services, and also between Newcastle and Sunderland, where the line of route is shared by AN, Nexus and freight services.

  1.4  All four operators use Railtrack infrastructure, although until 2002 the Nexus operated Metro was largely independent of Railtrack,. Now the extension from Pelaw to Sunderland uses Railtrack infrastructure. It is clear from both from the Railtrack National performance task force data, and from the writer's first hand observations that delays and disruption caused by Railtrack's mismanagement of the infrastructure have far exceeded those caused by "in house" failures of the Train Operators. In period 11 of 2001-02 all three operators suffered more from Railtrack delays than from their internal failings, with the % of delay caused by the TOC operators ranging from 21% for GNER to 36% for AN. The four train operators do show their own distinctive patterns of failure cause—for example staffing problems loom large in AN, whereas VXC suffers most badly from delays caused by other train operators.


  2.1  This company operates the former Inter-City East Coast Main Line services, from Kings Cross to Leeds, and to Newcastle, Edinburgh, Glasgow, Aberdeen and Inverness. The routes to Leeds and to Glasgow via Edinburgh and Motherwell are electrified. South of Edinburgh this network is the fastest and most modern railway route in Britain, and was when it was privatised. That said, the route has seen two severe accidents at Hatfield in 2000 and at Potters Bar in 2002 which have been caused by track failures, on a route which under BR control had very good track maintenance.

  2.2  GNER Services are very frequent, and passenger journeys increased substantially until the prolonged period of chaos which followed the Hatfield accident of October 2000. The experience of many travellers, borne out by our own records of journeys made and some study of daily lateness profiles, is that on a day unaffected by significant infrastructure problems GNER runs one of the best privatised services. As a company, its main source of in-house unreliability has been the failure of the class 91 locomotives which haul most of the electric trains. The company is progressively refurbishing these locomotives, and the resulting improvement in reliability is encouraging.

  2.3  The most conspicuous infrastructure failures have been those which caused both the Hatfield derailment and the chaotic speed restriction regime which followed it. However, almost as significant has been the number of "wires down" incidents caused essentially by the ever increasing use of electrification infrastructure which was poorly specified in the first place. As an operator GNER has been poor at service recovery—not least because of the very intensive use of rolling stock which has often prevented a flexible response. That said, the statistics show that GNER's performance before Hatfield was better than that of comparable services run by First Great Western and Virgin Rail, and very much better than those of VXC or ATN. The recent performance of GNER has been hampered by continued infrastructure problems, including the protracted remodelling of Leeds City Station (which also affected AN and VXC) and the derailment at Potters Bar in May 2002. The issue of the refranchising of GNER routes is considered separately.


  3.1  Train services from Scotland and the North East to Birmingham and thence south and west have long been troubled by delays and cancellations. There are two reasons why this is so. The first is that the service thread their way through many complex operating centres such as York, Leeds, Derby and Birmingham, and are frequently delayed at these places. The second is that the services have frequent scheduled stops, which both inhibited the regaining of lost time, except through smarter station working, and also causes engineering stress to the trains used on the route. That said, Virgin's early attempts to "sweat the assets" in order to improve productivity and increase service frequencies tended to exacerbate the inherent problems.

  3.2  The VXC franchise is of long duration, and from 2001 a new generation of diesel trains ("Voyagers" and "Super-Voyagers") have been introduced. VXC has been conspicuously successful in getting these new trains into service, and their performance so far suggests that a substantial improvement in service performance will be achieved by 2003.

  3.3  The performance of the VXC train crews and train equipment has already shown improvement, but the dearth of experienced staff with authority still means that an initial service problem often creates further chaos and an absence of information.


  4.1  AN took over the regional train franchise from MTL in 2000, when that company got into financial difficulties. The Strategic Rail Authority were primarily concerned to ensure that someone took over the franchise, and AN's bid was deemed to be the best expedient. In fact the bid itself was simply far too low to generate the revenue needed to pay staff to maintain the services planned

  4.2  Staff shortages, particularly of drivers, abysmal industrial relations, and the poorly planned and slowly executed reconstruction of Leeds City—the hub of AN's services—have been sufficient to produce a service quality which in a short time has earned this company the BBC's accolade of "Britain's worst train operator", criticism vociferously shared by the local press and their correspondence columns.

  4.3  The fact that many AN rail services are paralleled by Arriva group bus services, has fuelled the suspicion that this company is only too ready to cancel train services and run a bus instead.

  4.4  The failure to recruit and retain staff is the fault of AN and of MTL before it. The problem has recently been exacerbated by a 17% increase in pay to drivers, matched by an offer of 3% to other AN staff, thus widening differentials and causing strikes of TSSA and RMT staff. Given the reluctance of the "white collar" TSSA union to take industrial action, the degree of staff discontent is obvious. Prior to privatisation, train crews could often progress to more interesting and lucrative work by moving from local train operation to longer distance services. Now they can and do switch from one company to another, and this has greatly disadvantaged AN as well as MTL. Many of the projected savings in subsidy from low price franchise bids depended upon the assumption that labour would be as biddable as it was when unemployment was much higher. Today companies must accept that they will have to pay the market rate to staff—a principle which Arriva has already applied to its directors.

  4.5  AN's franchise bid was too low to be practicable. Given that their take-over of the franchise started when some experience of franchise operation had been gained, this was clearly the fault of both Arriva Group and of the SRA. The chaos in the reconstruction of Leeds station, and the more general track problems on the East Coast Main Line and on the Durham Coast route through Hartlepool are largely the responsibility of Railtrack.

  4.6  Train failures, strikes, dirty trains and poorly maintained vehicles have been the everyday experience of many train commuters in the North East, but it is fair to note that similar phases of unreliability—exacerbated by poor train design—were also a feature of British Rail operation of these services.


  5.1  Nexus operate an integrated rapid transit system (The Metro) which replace local BR lines from 1980. In 2002 the system was extended to Sunderland on Railtrack metals shared by AN and freight operators.

  5.2  The Metro system shows a high level of service reliability, though the trend in punctuality is disappointing. That said, the punctuality and reliability is markedly better than that of electric trains in the Leeds area. The level of use of the system has fallen in recent years, in contrast to the Metrolink system in Greater Manchester.

  5.3  Nexus is a consortium of local authorities. The Metro service has not been put out to tender in the in the way that other rail systems (including light rail systems) have been. This is inconsistent, though it is noteworthy that the Nexus corporate structure is similar to that in most conurbations in the EU which run Metro systems, and achieve a higher level of quality than is normal for rail services in the UK. It may be that the working practices and marketing of Metro are not as imaginative as those of the better TOC's, but the advantages of an integrated system of train and track operation are evident. The incidence of anti-social users and vandals on this thinly staffed system has been a cause of reduced travel, delays and cancellations on some parts of this system. Fares on Metro, as on London Underground, have increased much faster than inflation in the past decide. However, the Metro in Tyne and Wear has genuine competition from increasing car ownership and deregulated buses, in contrast to the situation frequently found in London, so the fare increases have affected use by full fare passengers.


  6.1  In the first round of Train Operating Company franchises, the period of franchise (seven years as a rule) was far too short to enable operators to make substantial investments. Trains are typically built for a "book life" of 30 years, and many British trains are more than 40 years old. The lead time from placing an order for rolling stock to the equipment entering full revenue service is often more than five years, so the inadequacy of a 7 year franchise is evident. It is conspicuous that VXC, which gained a 15 year franchise is introducing new generation rolling stock. It is a fortunate accident that GNER have been able to lease trains built for "Eurostar" regional services off the shelf, or they would be suffering an acute shortage of trains with consequent over-crowding

  6.2  In the first round of franchising, the mistake so often evident in Compulsory Competitive tendering applied in the Local Government Act of 1988, of "buying in the cheapest" was often applied, with the result that poor value for money was obtained.

  6.3  The indecision of the SRA and of the DETR and its political masters concerning the next period of franchise for the East Coast Mail Line has been most unfortunate. On paper the Virgin non-compliant "high speed line" bid looked appealing, but both the orthodox bid from Virgin and that from GNER were well constructed. To dither, and then allow GNER a two year extension of franchise was the most unhelpful option possible. It invited planning blight, and the fact that GNER have been able to offer service improvements at all in the two year period has been due to the availability of spare "Eurostar" trains which can be operated between Kings Cross and Leeds. As it is there are no proposals to replace the ageing diesel High Speed Trains which must be used to Aberdeen and Inverness, and which are in fact used on other services on electrified routes. There is an underlying issue here, which is the policy decision required to decide whether or not it is acceptable for both the West Coast Main Line from Euston and the East Coast Main Line from Kings Cross to be held by the same company. This policy decision should be separated from an assessment of the quality of the franchise bids.

  6.4  The decision to split Trans-Pennine services from local services in the North East has some appeal, though it may reduce the scope for shared costs. For example many Trans-Pennine trains now continue as local trains to Sunderland or Metro Centre, which might not happen if the Trans-Pennine services were run by a TOC not responsible for local services. The bidders for this franchise include Arriva, and this prompts an obvious question—does the failure of an operator to deliver promised services during one franchise preclude it from bidding for the next phase, or indeed from franchises elsewhere in Britain?


  7.1  The tendering process has not addressed the most conspicuous difference between passenger rail systems in Britain and those in Japan, France, Germany, and Italy—the absence of any proposals—let alone construction—of new high speed rail routes. Even the suggestion that an equivalent of Shinkansen, Lignes a" grande vitesse, Neubaustrecken and Direttissimi should be constructed between London and Scotland is widely regarded as unworldly. This timid approach to investment in radical infrastructure development needs addressing now

  7.2  TOC franchises should normally be for a 15 year period. This will have the advantage of encouraging a sustained approach to investment in equipment, and marketing. In addition it could encourage a long term view of productivity improvements rather than the "quick fix" approach attempted by some TOC's. Such long term franchises will probably be a pre-requisite for the creation of new high speed routes.

  7.3  A consistent approach to PTE services is needed. An approach where all PTE services including the Nexus Metro system are franchised, but the PTA's should be partners in the franchising process would be one way forward. Another civilised approach would be to accept that civilised public transport in cities is an essential service which is as important as good drainage, and pay for investment by a payroll levy or road congestion charging. New urban rail investment is stronger in Leeds and Newcastle than in most British cities, but urban rail investment still compares badly to most Northern European conurbations.

  7.4  A regime which encourages more intensive use of Railtrack infrastructure without appropriate additional charges to the TOC's will inevitably cause infrastructure problems, as is evident in the competition for paths on double track sections of the East Coast main line. The financial regime needs to change so that a greater element of payment is made for the more intensive use of scarce infrastructure. As a policy approach this use of the market could also be applied to road pricing and the auction of slots at airports. On railways this would be an extension of the market-pricing approach used to charge premium prices at peak times, and to sell spare capacity cheaply on the basis of marginal cost pricing.

  7.5  A sophisticated model for "supplier appraisal" of companies tendering needs to be developed. However it must be recognised that service specifications are very much more difficult to devise (and implement in a robust way) than are equipment specifications. On-going dialogue between operators, Railtrack and the SRA is therefore essential, and this dialogue can only develop if there is a reasonable period of organisational stability.

  7.6  "Soft" quality issues such as recruitment, communication and systems of service recovery need to be considered as part of franchise bids, as well as "hard" issues like timetables and new trains, and tender documentation and specification could profitably encourage this approach.

David Stewart-David FCIT FILT

Policy Officer Tyne Tees Institute of Logistics and Transport

May 2002

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