Select Committee on Transport Appendices to the Minutes of Evidence

Memorandum by the Strategic Rail Authority (REN 41)



  1.  The purpose of this paper is to assist the Committee in its inquiry into "Rail Services in the North of England", announced by Press Notice 65 of Session 2001-02 (dated 9 May 2002). The Statutory purposes of the Strategic Rail Authority are set out in the Transport Act 2000, and are:

    —  to promote the use of the railway network for the carriage of passengers and goods;

    —  to secure the development of the railway network; and

    —  to contribute to the development of an integrated system of transport of passengers and goods.

  2.  The Authority's Strategic Plan, published in January, set out a programme designed to achieve the key targets set out in the Government's 10 Year Plan for Transport, viz:

    —  to increase rail use in Great Britain (measured in passenger kilometres) from 2000 levels by 50% by 2010, with investment in infrastructure and capacity, while at the same time securing improvements in punctuality, reliability and safety;

    —  to reduce overcrowding in London to meet the Authority's standards by 2010;

    —  a significant increase in rail freight's share of the freight market by 2010. The Government believes it ought to be possible to increase market share resulting in an increase of up to 80% in rail freight by 2010.

  3.  In response to the decline in punctuality and reliability of rail services since the publication of the 10 Year Plan, the Directions and Guidance issued to the Authority on 11 April 2002 added an equal primary objective—to work with the rail industry to achieve substantial, lasting improvements in performance.

  4.  An extensive network of passenger and freight services operate in the north of England, provided by GNER, Virgin West Coast and Virgin Cross Country (Strategic Routes), First North Western, ARRIVA Trains Northern and ARRIVA Trains Merseyside (regional networks)—with services also provided by Wales & Borders and Central Trains, and freight trains run by EWS, Freightliner, DRS and GB Railfreight.

  5.  The remainder of this paper addresses the specific concerns raised by the Committee in its Press Notice.

  Whether the existing franchisees provide satisfactory services, particularly in relation to safety, punctuality, reliability, comfort and frequency of services.


  6.  Responsibility for the safe operation of the railway lies with the duty holders, principally Railtrack and the train operating companies. The Health and Safety Executive (HSE) is the body charged with preparing a safety strategy for the industry, bringing regulations forward, approving new works, accepting safety cases and enforcing legislation. It is therefore for the safety authorities to determine whether licence-holders are operating safely.

  7.  There is a statutory duty on the Authority when exercising its functions to have regard to the need to protect all persons from dangers arising from the operation of railways, including, in particular, by taking into account any advice given by the HSE. The Authority has a Memorandum of Understanding with the HSE.


Current Performance

  8.  The latest Public Performance Measure (PPM) figures, published by the Authority on 6 June 2002, are shown in the table below for each franchise operating in the north of England. All operators in the North of England achieved more trains running on time in the period January to March 2002 (ie Q4) than in the preceding period, October to December 2001 (ie Q3).


Regional Operators
ARRIVA TrainsMerseyside (ATM)
ARRIVA TrainsNorthern (ATN)
First North Western

Long Distance Operators
Virgin West Coast
Virgin Cross Country

  Source: National Rail Trends, SRA, June 2002

  9.  The PPM combines figures for punctuality and reliability into a single performance measure, and measures the performance of individual trains against their planned timetable. A train's performance is recorded by the automated monitoring system that logs performance—usually using the signalling equipment. The figures for Regional Operators show the percentage of trains arriving at their destination within five minutes of timetabled arrival, and for Long Distance Operators, the percentage arriving at their destination within 10 minutes of timetabled arrival. Performance across the network overall improved from 71.3% in the period October to December 2001 to 80.9% in the period January to March 2002. The performance of Regional Operators improved from 74.1% to 81.2% in that period.

  10.  Passenger complaints per 100,000 journeys decreased overall by 20% compared to the same period last year (October 2000—March 2001). That period last year covered the immediate aftermath of the Hatfield accident.

  11.  Passenger kilometres across the network over the year as a whole were up by 2% and increased by 6% between January and March 2001 and January and March 2002. Passenger journeys for the year remained virtually unchanged. Over the year as a whole, freight moved increased by 9%.

  12.  A fares price index has been introduced for the first time. It tracks the average change in rail fares and provides year on year comparisons from January 1999 to January 2002. The index covers around 90% of all fares—some special promotions and tickets which include other transport modes or entrance to tourist attractions are excluded. Results for the year to January 2002 show that on average, ticket prices for Regional Operators rose by 2%, and 5.1% on the Long Distance/high speed routes. Around 40% of the revenue covered by the index is generated by regulated fares, for which maximum price increases are controlled by the Authority. For the year to January 2002, these fares showed an increase of 0.1%. The inflation rate during the period from January 2001 to January 2002 was 1.3%.


  13.  The Regional Railways North East (name subsequently changed to Northern Spirit) franchise commenced on 2 March 1997, under MTL Rail Limited as franchisee. In February 2000, ARRIVA plc acquired the franchise, as part of the acquisition of MTL Services plc. The franchise was loss making, but ARRIVA agreed to operate it on existing terms until 18 February 2001. In February 2001 the Authority, in consultation with the local PTEs, reached agreement with ARRIVA for an extension of up to two years, with the option to terminate at an earlier date. The franchise operator—ARRIVA Trains Northern—is contracted to provide services until February 2003.

  14.  Following extensive service disruption involving cancellation of around 1,000 trains a week (9,000 services are operated by ARRIVA Trains Northern) the Authority took enforcement action on 25 October 2001. After consultation, a penalty of £2 million was imposed on ARRIVA Trains Northern on 25 March 2002, along with an order requiring additional drivers to be recruited, and threatening further fines of up to £5,000 per driver per calendar month where the company did not meet recruitment targets set by the Authority. The order required that such drivers should be newly trained, and not recruited from other operators. The penalty and any subsequent fines are payable by deduction from the company's franchise payments from the Authority.


  15.  The Authority has introduced the Rail Performance Fund (RPF), with £400 million available over 10 years. This is an early example of working with the industry to improve performance. The fund will provide finance for performance improvement projects that cannot be funded commercially by the private sector and third parties alone. This fund will also be used to accelerate the implementation of performance improvement projects. Schemes where preliminary interest in RPF co-funding has already been expressed include modifications to enhance rolling stock and IT systems, plus additional and upgraded infrastructure. This funding will complement other existing and successful schemes: Rail Passenger Partnership (RPP) and Freight Facilities Grant (FFG).

  16.  The Authority is also working closely with the Industry's National Task Force (the senior cross-industry forum on delivery and performance) to bring various performance initiatives together. Besides the Rail Performance Fund, these include improved rolling stock reliability, optimised route strategies, robust timetables, improved franchises, developing industry skills, possessions productivity, benchmarking and spreading best practice, a National fleet reliability improvement programme, and an infrastructure improvement programme. Closer co-operation is being secured by the development of "Virtual Boards" which bring together on a zonal basis, Railtrack, train operators and maintenance contractors to resolve performance-related problems.



  17.  The Authority's franchise replacement programme has involved a re-structuring of the passenger rail franchise map in the north of England, to allow for the creation of the new Northern and Trans-Pennine franchises.

  18.  The Authority has started work on the specification for the new Northern franchise, aiming to provide a better pattern of regional and local services for passengers in the north of England. The PTEs have determined their specifications, in accordance with their rights under the Railways Act 1993. The franchise has been structured by the Authority to provide a focus on urban and rural services serving the whole of the north of England, including the major population centres of Liverpool, Manchester, Sheffield, York, Leeds and Newcastle.

  19.  Six parties have been pre-qualified as bidders for the Northern franchise (viz: ARRIVA Trains Limited, Connex Transport UK Limited, FirstGroup plc jointly with Keolis SA, GB Railways Group Plc, National Express Group PLC, Serco Ltd). Once the specification work is completed, these parties will be given sixty days to prepare detailed proposals against the core specification, during which time the Authority will consult statutory stakeholders. A shortlist of companies will then be selected, by the Authority, to submit their best and final offers. From these a preferred bidder will be selected, with whom a new franchise agreement will be signed.

  20.  The Authority is moving forward concurrently with the new Trans-Pennine Express franchise to develop existing inter-urban services currently included within the ARRIVA Trains Northern and First North Western franchises. Given the close relationship of the constituent services, it is planned to start the Trans-Pennine Express franchise at the same time as the Northern franchise.

  21  The decision to have two franchises was made on the basis that there are two distinct markets—local, urban-focused services including five "business units", four of which include PTEs; and longer-distance, more commercial services across the Pennines—and these would be better managed for the benefit of their passengers through a separate franchise for each. It was specifically to avoid the risk of local services becoming the "poor relation" within a large franchise of mixed services, as well as to encourage development of longer-distance services, that the current approach was adopted. The objective for the Northern franchise, as much as for the Trans-Pennine Express franchise, will be to obtain well-performing good-quality services for passengers.

  22.  The franchise term of the independent Trans-Pennine Express franchise will be eight years. This will provide time for the new business to establish itself and provide options for possible combination in 2011-12 when it expires.

  23.  On 14 May the Authority and Merseytravel Passenger Transport Executive (PTE) pre-qualified six parties as bidders for the new Merseyrail Electrics Agreement (viz: ARRIVA Trains Limited, Connex Transport UK Limited, Serco Limited, TRANSDEV plc jointly with RATP International, NS/Dutch Railways and Keolis SA), to operate local passenger rail services following the expiry of the current Arriva Trains Merseyside franchise in February 2003. A Parliamentary Order is being taken forward to exempt Merseyrail Electrics services from the Authority's franchise responsibilities, allowing Merseytravel to let the services as a local concession.

  24.  A two year extension to the Great North Eastern Railway (GNER) franchise was agreed in January, providing some £100 million of addition investment in improved services, facilities for passengers and rolling stock. Virgin Cross Country and Virgin West Coast franchises are long-term franchises, which expire in 2012, and there are no plans to change these franchises but they will need to be reviewed in the light of the outcome of the West Coast Upgrade review (see paragraph 44).

The "new" franchise:

  25.  In December 2001 the SRA launched the new franchise proposition—15 years with review points of broadly five and 10 years when continuation will be confirmed based on an assessment of historic and planned performance.

  Whether the plans for investment in the rail network in the region meet the needs of additional network capacity and other improvements.

  26.  Major investment must be directed where it is likely to be most effective in addressing the Government's 10 Year Plan key targets, and the Strategic Plan sets out a programme designed to realise this goal. About 70% of all journeys nationally are made on the London and South East network. Train operators south of the River Thames between them carry nearly 40% of all rail journeys nationally. The emphasis of the major infrastructure projects in the Strategic Plan is on London and the South East, reflecting the primary objectives of the Government's 10 Year Plan, which the Authority is pursuing in accordance with the Directions and Guidance from the Secretary of State.

  27.  Nevertheless, the Strategic Plan contains a number of national initiatives that will benefit the north of England, including

    —  the introduction of Train Protection and Warning Systems (TPWS);

    —  a freight company neutral revenue support scheme to be introduced in 2002 for intermodal and "less than train-load" markets;

    —  freight facilities grant; Incremental Outputs Statements for track, signalling and stations;

    —  the establishment of a National Rail Academy;

    —  the Rail Passenger Partnership fund;

    —  the Rail Performance Fund;

    —  proposals for a National Test Track to prove new rolling stock;

    —  and a programme of improvements to station access for passengers with disabilities.

  28.  There are 49 ARRIVA Trains Northern stations and 108 First North Western stations eligible for upgrading to provide modern facilities under the Authority's Incremental Outputs Statement programme. Additionally, there will be an upgrade of Preston station; the completion of station improvements at Manchester Piccadilly; £30 million investment by Virgin West Coast in improving reliability, quality of passenger experience and maintenance provision; major improvements to stations in Cumbria, and at Ashton-under-Lyne; installation of CCTV will be installed at seven First North Western stations; and the centralised monitoring of CCTV in the Merseytravel area.


  29.  The extension of ATN's franchise to February 2003 brought a commitment to procure eighteen additional vehicles, and a further eight coaches were secured through RPP funding for Leeds metro trains. The fleet of new class 333 electric trains is now being expanded to four coach combinations (with associated platform lengthening, where required).

  30.  RPP funding is being provided to improve passenger information at stations between Hexham and Carlisle.

  31.  The Authority is funding 462 additional cycle parking spaces at 21 railway stations throughout the Tees Valley area.


  32.  Service enhancements between Blackburn to Manchester are being funded by the RPP.

  33.  Modifications to First North Western class 323, 142 and 150 trains will enable staff to improve on-train customer care and revenue protection.


  34.  The TOC is committed to introduce an additional three-car train from autumn 2001 and a second from summer 2002. The Authority and Merseytravel are considering a proposal to recast the Passenger Service Requirement to improve overall performance.

  35.  Negotiations are underway with Angel Trains, Merseytravel and ATM regarding the refurbishment of the class 507/508 trains currently operated by ATM.


  36.  Thirty-four four-car CrossCountry Voyager trains are to replace all loco-hauled services by May 2002. Progressive introduction of new trains will deliver extra services and greater reliability. A total of 53 nine-car, 140 mph, tilting Pendolino Virgin West Coast trains are being constructed by Alstom. Testing of the new Pendolino trains on the West Coast Main Line has begun between Carlisle and Carnforth, with 42 Pendolino trains curently planned to be in service by May 2003, serving London, Manchester, Preston and Liverpool. Bombardier five-car Super Voyager tilting trains are to be introduced by Virgin West Coast between London, Chester and Holyhead in the medium term.

  37.  CrossCountry service frequencies will be increased from Winter 2002 timetable on core routes to approximately double the present frequencies, with standard "clock-face" timetables and shorter journey times. Virgin West Coast frequencies are expected to improve to two trains per hour between London and Manchester.


  38.  The two year extension of the Great North Eastern Railway franchise is providing for:

    —  a planned 11 additional services between London and Leeds (introduced at the beginning of June),

    —  £10 million for station and passenger information improvements;

    —  better facilities for disabled passengers;

    —  improved performance, compensation and customer satisfaction regimes;

    —  and a minimum £16 million contribution from GNER to infrastructure improvements;

    —  more than £50 million is being committed by GNER to rolling stock, including the leasing of two additional train sets and six new recovery locomotives, refurbishment of all passenger carriages and the lengthening of the diesel High Speed Trains, expected to provide an additional 70 seats per train by the end of 2003; and

    —  the investment package includes £20 million to improve the reliability of the electric locomotives.


  39.  The Authority has created a Freight Small Schemes Fund, which will provide £300 million over 10 years, to secure small and medium sized freight infrastructure schemes which would be particularly valuable improvements to the network, and can be delivered quickly, within a fixed annual budget.

  40.  The Authority intends to develop and implement:

    —  an increase in the availability of freight paths in the order of 30% to and from ports at Immingham, Grimsby and Killingholme;

    —  incremental improvements to capacity, speed and route availability for freight trains on the Hope Valley line between Sheffield and Manchester;

    —  gauge clearance to W10 or W12 on the North TransPennine route between Leeds and Manchester, including connections to ports and terminals, permitting higher box sizes to be moved; and

    —  development of freight diversionary routes around central Manchester.

  41.  Improvements on the capacity-constrained Hope Valley line will provide more freight paths, faster transits and greater reliability of both freight and passenger services. Subject to further detailed work, diversion of freight away from central Manchester will deliver additional capacity and free-up paths for passenger services on central Manchester corridors.

  42.  The East Coast Main Line upgrade will yield significant benefits for freight traffic in the North East and includes feasibility studies to handler longer (775 metre) trains and larger (9'6" containers and 2.6 metre wide) European intermodal units with an enlarged structure gauge. Plans are also being developed to create additional paths for freight trains on the North East/South West route, the core section of which is Doncaster to Bristol.

  43.  The South Humberside Main Line currently handles approximately 20% of all UK rail freight tonnage. Improved capacity and speeds will consequently benefit a wide range of freight customers. Improvements at Doncaster will also take place to accommodate longer freight trains.


  44.  West Coast Main Line infrastructure upgrade and renewal works were designed to deliver increased capacity, higher line speeds, improved reliability and performance. Railtrack and Bechtel have completed a thorough review of the deliver of the West Coast Route Modernisation project. This review will now form a foundation for the on-going discussions with the Strategic Rail Authority and the passenger and freight train operators on implementing the project. These discussions will ultimately determine the outputs for the project in terms of services provided, and the overall cost and timescales for completing the upgrade.

  45.  The Authority plans to lead a Joint Venture company that will deliver an upgrade of passenger and freight capacity on the East Coast Main Line. Improvements being developed include:

    —  longer trains and platforms;

    —  development of alternative freight lines to provide increased and segregated capacity between:

      —  Peterborough and Doncaster via Lincoln;

      —  Doncaster and York;

      —  Northallerton and Ferryhill via Teeside;

      —  Newcastle and Edinburgh, through provision of freight loops;

    —  new bridge to take East-West services, which currently cross the East Coast Main Line by a flat junction at Newark, over the ECML; removing this flat junction would improve capacity and remove operational complexity;

    —  capacity improvement works at Doncaster, Shaftholme, York, Newcastle and other locations.

  46.  The completion of the £285 million "Leeds First" project, comprising re-signalling, additional track and platform capacity, a new station roof, customer information systems and a new footbridge with lifts and escalators.

  47.  The Authority, in partnership with Railtrack, Greater Manchester PTE, Manchester International Airport, and the Highways Agency, has completed the Greater Manchester Strategic Rail Study, which sets out a strategy for the development of the rail network in Greater Manchester over the next 20 years. The first key building block, the creation of the Trans Pennine Express franchise, is currently underway. The partners in the study will need to consider how best to take forward long term options, including the expansion of light rail on the heavy rail network.

  48.  The SRA is also involved with Manchester Airport and Greater Manchester PTE in the Manchester Ground Transport Interchange Project. This scheme will increase rail capacity at Manchester Airport station (third platform), and make it an interchange hub for rail, bus, air, and light rail transport links.

  49.  A list of Incremental Output Track and Signalling schemes in the north of England is attached as Appendix One.

The Influence of Rail Services on the Economic and Social Development of the Region

  50.  While the Authority's primary focus must be on delivering the 10 Year Plan outcomes, the strategic development of the railway will be affected by demographic, social and other changes taking place over the longer term.

  51.  The Directions and Guidance require that:

    —  the Authority ensures that its strategies, investments (including in passenger franchises) and other expenditures have regard to their economic, social and environmental impacts;

    —  the Authority must secure investment for the wider development of the railway network for both passengers and freight;

    —  the Authority to exercise its functions in the way best calculated to protect the interests of users of railway services and to contribute to the achievement of sustainable development;

    —  the Authority should use the most effective and innovative means to introduce capital support into the industry, address market failures and maximise the capacity to raise private capital by including a range of funding mechanisms;

    —  the Authority should give particular encouragement to schemes which support the Government's integrated transport policy and broader sustainable development;

    —  where a scheme appears to the Authority to secure significant wider economic, social or environmental benefits, but is not viable on commercial grounds alone, the Authority should consider whether direct public financial support for such a scheme would be justified, or whether it could be facilitated through the development of arrangements for sharing risk between the public and private sectors; and

    —  the Authority should also consider whether, and if so to what extent, it would be appropriate for it to make a funding contribution to support passenger rail services which are sponsored by local authorities and were approved by the then Department of Transport prior to the award of first round franchises.

  52.  The Rail Passenger Partnership fund (RPP) is driven by proposals from local stakeholders, and reflects genuine local requirements. It has proved to be a particularly effective way of stimulating improved integration with other forms of public transport, and bringing about significant improvements in railway services. A commitment of £53 million has been made to over 50 schemes in the last three years on new stations, higher frequency services (such as between Sheffield and Hull), new services, car parks and park and ride facilities.

  53.  The RPP was re-launched in January 2002 with funding of £400 million over 10 ten years, and there are now 140 expressions of interest, some of which will be developed for RPP submission. Since the re-launch, the volume of applications and the speed of consideration and approval have improved substantially. The Authority has been able to provide a decision on formal bids submitted for RPP funding within four to six weeks of the bid submission.

  54.  One method the Authority is adopting to achieve significant improvements in services, and contributing to the economic and social development of the north of England is through the franchise replacement process. In particular, the development of improved inter-urban services (the key driver for the creation of the Transpennine Express franchise), improvements to cross-country services, and improving the connections with London remain important elements of this contribution. In examining proposals for new (or replacement) franchises, the Authority is bound to consider the wider social and economic benefits, including from road de-congestion and the environmental impact of proposals.

  55.  The major upgrade work on the West Coast Main Line and the East Coast Main Line will improve transport links to the north of England from London. Capacity on the West Coast Main Line is key to achieving the growth targets in the Government's 10 Year Plan.

  56.  The Authority is represented on the Steering Groups of the multi-modal studies, which address regional issues. Which outputs from these studies might be taken forward and how they will be funded is under discussion with the Department for Transport (DfT). The Authority will, however, for example, be investigating the Business Case for a western link to Manchester Airport, which was a recommendation from the Manchester area multi-modal study.

  57.  The Authority's "Planning Criteria" recognise that changes to rail services may bring economic benefits to a locality or region, particularly if combined with other measures in a coherent overall strategy. These benefits do not always create a sustainable increase in employment or income at a national level and appraisal methodology is not sufficiently robust to enable these benefits to be monetised.

  58.  A Business Case should note, therefore, whether and how a rail proposal is potentially beneficial for a designated regeneration area (eg Assisted Area); and whether there are significant developments within or adjacent to the regeneration area which are likely to be dependent on the rail proposal proceeding (eg where planning permission is conditional upon rail access). The Authority is keen to encourage joint sponsorship for projects with significant regeneration benefits, where these meet the wider regional objectives of other sponsoring bodies. Several RPP schemes have been jointly funded on this basis.

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