Select Committee on Transport Appendices to the Minutes of Evidence

Memorandum by GNER (REN 35)



  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.


10 June 2002

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