Memorandum by GNER (REN 35)
RAIL SERVICES IN THE NORTH OF ENGLAND
1. INTRODUCTION
2. GNER welcomes the opportunity to respond
to this consultation and looks forward to providing oral evidence
on 19 June and, more informally, during the Committee's planned
visit to York on 4 July.
3. GNER started operations in April 1996
after securing an initial seven-year franchise to operate high-speed,
long-distance passenger services on the East Coast Main Line between
London Kings Cross, the East Midlands, Yorkshire, the North East
of England and Scotland.
4. GNER's route covers 920 miles of track
and the company is the principal passenger operator on the East
Coast Main Line, a North-South transport corridor of national
strategic importance, linking communities between the capital
cities of Edinburgh and London. GNER carries more than 14 million
passengers a year.
5. In so far as its services tie in to the
area covered by this Inquiry, GNER assumes this relates to the
regions of Yorkshire and Humberside and the North East of England.
6. GNER is thus not exclusively a Northern
train operator, although the company's full name—Great North
Eastern Railway—reflects its close and proud association
with the North. GNER has its headquarters and national training
academy in York and its telesales and inquiry centre is located
in Newcastle. It employs over 1,600 people in the North out of
a total workforce of 3,100 and serves 18 stations in the area,
seven of which are managed by GNER (Doncaster, Wakefield Westgate,
York, Darlington, Durham, Newcastle and Berwick).
7. Approximately 20% of GNER's revenue comes
from connecting traffic from other operators, most of it in the
North. In turn, GNER's services provide important onward connection
opportunities and valuable revenue for other train operating companies
(TOCs).
8. In January 2002 GNER was awarded a two-year
franchise extension to April 2005, as part of a £100 million
investment agreement with the Strategic Rail Authority (SRA).
GNER has not received a Government grant since April 2001.
9. GNER's response to the particular points
covered by the Inquiry is as follows:
10. Whether existing franchisees provide
satisfactory services, particularly in relation to safety, punctuality,
reliability, comfort and the frequency of services;
11. GNER has consistently been rated as
the best long-distance TOC in Britain, as evidenced in the SRA's
six monthly National Passenger Surveys (NPS), and has always out-scored
the industry average on all the parameters measured. In the latest
NPS GNER achieved a 84% overall satisfaction score, despite an
unsatisfactory train performance.
12. The company has won numerous national
rail awards for the quality of its management, customer service,
stations, catering and marketing. Doncaster was voted Britain's
Best Station in 2000. A MORI poll conducted by the Institute of
Directors recognised GNER as the leading train operator in the
UK. Letters of praise from passengers have increased by 600% since
1997.
13. Safety—is paramount and part of
good management practice. Its importance is embedded in the company
culture.
14. GNER has had the misfortune, through
no fault of its own, to experience the horrific consequences of
safety failures at close quarters with the Hatfield (a railway
infrastructure failing) and Great Heck tragedies (a road accident
with freak and tragic consequences on the railway), in addition
to the disruption and pain caused as a result of the Potters Bar
accident. This has redoubled GNER's efforts to support Railtrack's
focus on ensuring that contracted maintenance supervision and
controls are as safeguarded and stringent as possible.
15. Despite the awful human cost and the
impression created by widespread media treatment of such tragedies,
rail travel remains the safest form of land transport.
16. GNER has a good safety record, but is
not complacent. Initiatives and recent progress have included:
— regular internal reporting of safety-critical
scenarios to raise awareness and learn lessons;
— CIRAS, the confidential reporting
system—GNER was one of the first TOCs to join, prior to
the national rollout;
— the introduction last year of safety
literature for passengers, which is displayed on-train and at-stations
to provide advice on evacuation procedures and on-board safety
features;
— the fitment of the Train Protection
and Warning System (TPWS+, an enhanced variant which can halt
trains travelling at speeds in excess of 75 mph). GNER is on schedule
to fit the system on all its locomotives by summer 2003 and Railtrack
has already installed equipment on more than half the ECML;
— intensive one-day evacuation training
for all 900 on-train staff;
— a reduction in Signals Passed at
Danger (Spads), due partly to improved signal sighting and the
use of defensive driving techniques; and
— regular safety reports discussed
at Director level and an annual Safety Conference for cross-functional
teams.
17. The strength of GNER's safety processes
has been recognised by a RoSPA Gold Award this year, at the company's
first attempt, and the achievement of Level 7 status in the International
Safety Rating Scheme (ISRS), an independent international safety
benchmark which places GNER amongst the best in the transport
sector worldwide. GNER is the only UK TOC (apart from Eurostar)
to have achieved Level 7 and has risen from Level 3 since 1996,
demonstrating an improved safety culture.
18. Punctuality/Reliability—GNER's
recent train performance has been poor, although in most months
it is comparable to or better than that of domestic airlines from
airports such as Leeds Bradford or Newcastle to London. At present
GNER's Anglo-Scottish services are being delayed due to speed
restrictions at Dolphinstone, south of Edinburgh.
19. The two-year franchise extension set
new targets to be achieved, otherwise heavy financial penalties
will be incurred. It also allowed for enhanced compensation for
passengers if services run late.
20. As part of its £100 million investment
over the next three years, GNER (with train manufacturers and
other rail partners) is working hard to improve the reliability
of its rolling stock. The Class 91 programme has already reduced
delay minutes due to failed locomotives from 43,000 minutes delay
in 1998 to 29,000 minutes in 2000, and further progress is being
made. In addition, improved reliability is already resulting from
a major re-engineering programme of the HST power cars at Doncaster.
21. Concerted efforts to improve GNER's
own performance includes a programme to ensure the prompt and
efficient despatch of busy trains from busy stations.
22. GNER is also seeking to make further
improvements via the SRA's Performance Fund.
23. GNER's main role is to run trains safely,
reliably and on-time and to look after passengers if things go
wrong. The company is not in the business of apportioning blame
publicly. However, it is a matter of fact that, since starting
services in 1996, 27% of delays to GNER services have been GNER-related
and 73% have been due to infrastructure or other TOCs.
24. GNER has stated in a previous Inquiry
that train performance is dogged by long-established problems
on the ECML such as lack of sufficient track capacity, a paucity
of diversionary routes and an insufficiently robust overhead power
supply. This national transport corridor is so full and busy that
even a relatively short or minor closure during peak hours causes
serious disruption for prolonged periods. No amount of extra rolling
stock, contingency planning, improved communications or customer
care will solve the problem if the track or overhead line damage
is on a section of two-track railway and there is no diversionary
route available (approx 75% of the ECML is two-track).
25. A significant part of the solution lies
with the ECML upgrade, scheduled in the SRA's Strategic Plan for
completion by 2010, although final design and costings are unknown
at this stage.
26. Comfort—GNER strongly advocates
the creation of a high-quality railway in addition to a safe,
efficient and reliable one. Passenger comfort is crucial, especially
on long journeys.
27. As part of a £30 million investment,
GNER is redesigning and refitting its entire fleet of electric
Mk IV coaches to the standard of new trains. This is to a high
specification to increase passenger comfort.
28. The on-train environment is constrained
at peak times due to overcrowding, particularly on early evening
weekday departures out of Kings Cross. GNER has taken several
steps to increase seating capacity where possible, including:
the lease of three trains from Eurostar (UK) Ltd from this summer
to create 11 extra services between London and Leeds; and a high
fleet utilisation. GNER is also committed to lengthening all nine
HST diesel trains by one coach—the equivalent of a whole
extra train. However, the real solution to creating extra seating
capacity is to be able to order new trains under a longer franchise
(see 45).
29. GNER welcomes the introduction of new
rolling stock by other operators, which should help to raise service
standards across the industry. It is particularly important for
connecting passengers that high standards of comfort become more
consistently applied. The quality of integration (whether from
train, bus, car, taxi, bike of foot) is as important as the intermodal
interface itself.
30. Comfort at GNER stations has been improved
with new passenger lounges and new customer-friendly travel centres
at some locations. his is being extended as part of a new £10
million station modernisation programme.
31. Track quality is regularly monitored,
but GNER believes more can be done by Railtrack to improve "ride
quality", particularly on the northern part of the route.
A "ride mon" device is attached to a single GNER HST
to assess the smoothness of the ride and to spot potential track
defects. GNER hopes that Railtrack will install further such devices
on other GNER trains.
32. Frequency of service—The number
of services run by GNER rose by 25% in its first four years to
125 a day and GNER attracted 30% more passengers. The increase
in services was achieved by operating the highest fleet utilisation
of any mainline fleet in Europe. But, in retrospect, it was perhaps
too stretching and train performance at the time suffered as a
result.
33. From the Summer 2002 timetable, reflecting
a loss in rolling stock due to the Hatfield and Great Heck tragedies
but off-set by the lease of an additional train from Eurostar,
GNER will be operating 124 services every weekday. This includes
the most frequent service ever on the Leeds-London route, the
largest long-distance rail market in the UK, with 11 extra services
(6,000 additional seats) a day. This initiative has been warmly
welcomed by the West Yorkshire business and civic community.
34. Eighty-three per cent of GNER passengers
are either satisfied or very satisfied with the frequency of trains,
according to the latest SRA National Passenger Survey.
35. Improving Service through a strong Vision
and Values. GNER has invested heavily in improving service standards
and adopts a value-added approach to gaining extra custom. For
example, since 1996, the company has recruited 550 extra on-train
staff to provide a more personal, attentive service. It now employs
more customer-facing staff than ever and trains them for longer.
Its high service standards (but always room for improvement) are
the result of the quality of its people, the way they are trained
and developed and a strong commitment to customer care and continuous
improvement.
36. GNER has also worked hard to develop
a close and co-operative approach to industrial relations. Two
ground-breaking Partnership Agreements have been signed with the
trade unions to foster a more inclusive, honest and open relationship,
based on consensus not conflict. These have been applauded by
the TUC.
37. The company's management, its people
and its service have successfully emerged from one of the most
testing scenarios faced by any UK company in recent times (two
awful tragedies within the space of four months and a prolonged,
if ultimately abortive and unsuccessful, hostile take-over bid).
Many passengers and industry observers commented on the care and
professionalism that continued to be shown by GNER during this
period.
38. Plans for investment in the rail network
in the region and whether they meet the needs of additional network
capacity and other improvements;
39. GNER's two-year franchise extension
to April 2005 heralded a £100 million investment package
over three years—five times more than the contractual commitment
over the seven years proposed in GNER's original franchise. This
new investment covers the repair and refurbishment of rolling
stock, longer HSTs, extra services and a station improvement programme,
including enhanced security, extra car parking and cycle spaces,
better passenger information and easier ticket purchase.
40. GNER's agreement also includes a unique
profit share arrangement with the SRA whereby any profits generated
beyond a specified return on sales are specifically reinvested
into the ECML, further to improve reliability and quality for
passengers.
41. The short-term franchise deal undoubtedly
brings a number of quick wins for passengers, particularly in
terms of a more reliable and comfortable railway.
42. It does not, however, create a significantly
bigger railway in terms of enhanced capacity. Regrettably, under
the two-year extension to 2005 it was not possible to procure
manufacturing and private finance support for new rolling stock,
even by using Section 54 powers. At the time of the negotiations,
the earliest new trains could be delivered was 2006 ie beyond
the franchise expiry date and, as train manufacturers do not get
paid until the trains are delivered, there was an understandable
reluctance on their part to commit to new trains when there was
no certainty that the incumbent franchisee would be present either
to test or take delivery of the new stock.
43. The Midland Mainline two-year extension
has been held up by some as an example of how such a short-term
franchise extension could bring new train orders. However, the
important difference with the GNER position is that the MML franchise
was extended in 2002 to 2008, providing six years security of
tenure in which to take delivery of and operate new trains. GNER's
new franchise from 2002 was for three years.
44. As indicated in its evidence to an earlier
Inquiry, GNER believes that long-term franchises are the key to
unlocking the long-term investment required to enable Britain
to create a railway of which it can be proud. GNER remains firmly
committed to its long-term vision of "creating the UK's ultimate
travel experience".
45. Nonetheless, in the short term, for
a number of pragmatic reasons, the company has been examining
with the SRA plans to extend its franchise by three further years
to 2008 to enable the purchase and delivery of up to 12 new trains,
as well as considering other passenger benefits which could be
delivered earlier than a long-term competition would allow. The
new trains would provide much-needed extra seating capacity. Furthermore,
GNER has to return its three leased Eurostar sets by April 2007
at the latest.
46. A new fleet of GNER trains could be
diesel-powered with a "go anywhere" capability, although
future fleet options are still being assessed. As part of an extension
to 2008, the delivery of new trains in 2006-07 could act as a
precursor to the replacement of the current fleet of diesel HSTs
which are coming to the end of their economic life.
47. A three-year extension to 2008, which
is within the Secretary of State's powers, would also allow more
time for post "Railtrack in Administration" issues to
be resolved and for the ECML upgrade to be progressed, whilst
also dovetailing with the SRA's desire to rationalise the franchise
map by reducing the number of franchisees and to exploit geographical
and operational synergies as neighbouring franchises come up for
expiry.
48. Indeed GNER supports SRA proposals to
rationalise the number of franchises out of London termini, believing
that this will bring capacity and performance benefits and help
to raise the industry's skills base.
49. Plans to create extra ECML track capacity
should include the needs of long-distance through passenger traffic
between London, Yorkshire, the North East and Scotland, as well
as any regional passenger and freight priorities.
50. As part of its 20-year franchise plans
GNER was invited to submit proposals for a Special Purpose Vehicle
(SPV) partnership to fund, manage and deliver the ECML upgrade.
This is now a SRA-led project, but as the principal tenant on
the route GNER has not, as yet, been privy to any revised or detailed
plans so is unable to judge whether the necessary capacity enhancements
are being proposed by the SRA. Should it be required, GNER's planned
partnership with construction giants Fluor and Hochtief remains
firmly in place to assist in the delivery of the much-needed modernisation
of this flagship route.
51. Separately, GNER supports the concept
of a new North-South high-speed line between London and Scotland,
if the SRA's feasibility study determines that there is a business
case for such a complex and sizeable scheme. Indeed GNER has expressed
an interest in being the principal passenger operator. Such a
line may prove to offer a solution to possible, much longer term
capacity constraints between London and Scotland and the SRA is
considering possible route options. It could also defer the need
for extra runways in the South East. However, a new high-speed
line is unlikely ever to be built until 2015 at the earliest,
and it should not be allowed to delay urgent progress on the essential
and long-awaited ECML upgrade.
52. The influence of rail services on the
economic and social development of the region.
53. As stated earlier, GNER is a major employer
in the North with a workforce of more than 1,600. Its operations
also safeguard the jobs of thousands of other people in a diverse
range of partner organisations—from bakers in Hexham to
sandwich makers in Peterlee and from regional breweries to train
manufacturers such as Bombardier in Doncaster and Wakefield.
54. GNER's fast and frequent services provide
a crucial economic and social cohesiveness between Northern communities,
as well as a vital connection with Scotland and with London, where
about 80% of GNER services start or finish. In short, GNER's services,
and the stations it manages, are important and attractive gateways
both to the North and within the North.
55. Although GNER is predominantly a long-distance
train operator for business and leisure travellers, its fast,
frequent and high quality services have, almost by default, attracted
a small but significant volume of commuters in the travel-to-work
areas of Doncaster-Wakefield-Leeds and York-Darlington-Durham-Newcastle.
(However, most of GNER's commuter base travels on the southern
part of the route between Doncaster, Retford, Newark, Grantham,
Peterborough, Stevenage and London).
56. GNER believes that the trend for more
people to commute to London across longer distances will continue,
due to two main factors: high London house prices which are predicted
to rise faster than in other parts of the UK; and the relatively
low cost of commuting where season ticket prices are pegged to
RPI minus 1%.
57. GNER has achieved a broadly 60% share
of the Newcastle-London travel market and 80% on the Leeds-London
route, versus domestic airlines.
58. Since starting its original franchise
GNER has managed, despite limited fleet resources, to add two
new destinations to its route map, thereby opening up new markets.
Skipton, in the Aire Valley, received its first direct service
to London for 22 years in 1998 and Selby its first since 1980
in 2000.
59. With the benefit of a three-year extension
to 2008, GNER's new trains could be extended to serve diverse
new markets, ranging from the rural catchment area of Lincoln
to the industrial hinterland of Middlesbrough in Teesside, as
well as adding further frequencies to existing markets. Furthermore,
work could begin on the development of modern out-of-town "parkway"
stations, such as that proposed by GNER for the M1/M18 catchment
of South Yorkshire, near the former mining area of Rossington.
This further investment would create hundreds of new jobs (and
protect many more), reduce road congestion and associated pollution,
strengthen North-South links and enhance the North's appeal to
inward investors.
60. The value of the ECML and GNER's services
to the North of England became most starkly apparent after the
Hatfield tragedy in October 2000, when the plethora of speed restrictions
and lengthy journey times, coupled with severe flooding, disconnected
the North from the capital. Commercial opportunities were missed
and regional competitiveness was adversely affected, as the alternative
of domestic air travel could not cope with the extra demand placed
upon it. (As soon as rail journeys became more reliable, however,
the business market began to return, although leisure rail travel
took longer to recover and was subsequently also hampered by foot
and mouth and the effect of 11 September).
61. More recently, GNER has contributed
to a study, commissioned by Yorkshire Forward (the regional development
agency) and undertaken by consultants Halcrow, which examined
the value of the ECML to the Yorkshire and Humberside region.
Published on 29 May 2002 (to coincide with GNER's boost in Leeds-London
services), the report revealed that the ECML currently supports
more than 11,000 jobs in the region—including 8,500 in tourism—and
generates £100 million a year for the regional economy.
62. The study showed that one third of businesses
surveyed use the ECML every weekday, mainly because the rail journey
from the region to London typically saves two hours travelling
time when compared to the same road journey, "a saving which
is valued very highly by the private sector." Businesses
viewed the two-hour journey to London as a real competitive advantage,
with 35% of respondents saying that good accessibility and communications
encouraged them to stay in the region. However, a third of respondents
highlighted reliability and half the frequency or level of service
as areas for improvement.
63. The Yorkshire Forward report also strongly
advocated the case for upgrading the ECML, estimating that 2,000
extra jobs could be created as a result, with 500 of these being
inYorkshire and Humberside. The upgrade could also generate a
20% increase in the volume of overseas investment, creating a
further 380 jobs a year. Together, the impacts are estimated to
be worth at least an extra £20 million to the region's economy.
64. GNER enjoys a close working relationship
with its many stakeholder organisations in the region, many of
whom have been very supportive of the company's attempts to bring
about further improvements for passengers. The company also plays
an active role in supporting cultural, sporting and artistic endeavour
in the region through a vibrant sponsorship programme.
65In addition to the numbers of GNER staff employed
in the North, an important consequence of having its headquarters
in York is the presence in the region of a large and specialist
pool of senior talent and management expertise, which is widely
respected within the industry.
66. Yorkshire is often used as a test bed
for innovation and in the important area of people management
GNER has developed unique management development partnerships
with York University and the Open University. More than 100 managers
have either achieved, or are on their way to achieving, Diplomas
or Certificates in Management. In addition, as part of a national
pilot training scheme, GNER drivers were amongst the first to
achieve S/NVQs, following accreditation at York College and Clackmannan
College in Edinburgh. The company was also the first TOC to achieve
the latest national standards in Investor in People, following
accreditation in Yorkshire.
GNER
10 June 2002
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