Examination of Witnesses (Questions 1-19)
MR INGEMAR
LUNDIN
3 NOVEMBER 2004
Q1 Chairman: Good afternoon, Mr Lundin.
Can I begin by warmly welcoming you here and apologising.
I understand that your morning has been a bit eventful. I am very
sorry that you should have lost your case and I apologise on behalf
of London if not on behalf of the United Kingdom. We are enormously
grateful to you for giving evidence to us today because we think
what you have to say to us is going to be very important. May
I begin by asking you to tell us your name and your official title
and then perhaps you have something to say before we go to questions.
Mr Lundin: I am
very happy to be here in London. I had some illustrations in my
bag but you will get those later. I am managing director for a
public transport authority in Sweden, in Jonkoping. It is
quite a rural area with a regional centre of about 105,000 inhabitants
and I have been responsible for the rail service since 1985. I
have been managing director for 24 years. During that time, we
have been the first place in Sweden to have a private operator
in early 1990. That is the reason why we have visitors from the
Ministry of Transport in the UK, to see if it could be possible
to have private operators. Today we come to you and look at your
railway system.
Q2 Chairman: How much does the railway
network in Jönköping cost?
Mr Lundin: It is a net contract
that we have. That was one of the figures in the papers so perhaps
I could come back on that.
Q3 Chairman: What proportion is covered
by fares?
Mr Lundin: Yes. The costs are
per kilometre, approximately £4 per kilometre. From there
it is our cost. As it is a net contract, that means that the operator
has the income, the fares. From our point of view, the relation
between income and cost is about 45% in the present system but
it is very important also to illustrate that, by this new system,
we have invested about 320 million Swedish krone in new rolling
stock. You have to divide it by 13 to have it in pounds.
Q4 Chairman: Was that just the rolling
stock?
Mr Lundin: Yes. Before that we
had old trains with no capital cost and no train crew on board,
just the driver. At that time, it cost about £2 per kilometre
so it has been twice as much cost for us to use this system but
still we have a new fleet which means that we have twice as many
seats on board trains.
Q5 Chairman: Did the subsidy come from
the central government or from the local government?
Mr Lundin: Most of the taxpayers'
money goes to the local or regional level. That means our owner
puts in this money and also makes the decision about buying the
new rolling stock. Our owner is the county council and its 13
municipalities.
Q6 Chairman: They decided to spend the
320 million Swedish krone?
Mr Lundin: Yes, as an investment
in the future. They have also been responsible for decisions about
running the old trains before at lower cost. The county council's
main expense is for health care. 95% of their budget is for health
care and 2% for public transport. That means that they are giving
some priority between public transport and health care.
Q7 Chairman: Was there any central government
subsidy?
Mr Lundin: There is a central
government subsidy which is about one third of the costs for these
rural railway.
Q8 Chairman: When you say "costs"
are we talking about operational costs or capital costs?
Mr Lundin: Gross costs, including
capital costs, in what we are giving to operators. A fee for using
the rail, for example, is included in the £4 per kilometre.
Q9 Chairman: How do you get the funding
to reopen lines? I understand that you have not just been running
the existing railway but you have opened up some more lines that
had been closed. Is that right?
Mr Lundin: In a way, yes. It is
more that we have taken over responsibility for the state railways.
There was a Transport Act in 1988 in which the public transport
authorities handed over the responsibility for all regional service,
including rural service. Many of those lines had a rail service
before but it was a long distance rail service. We had to open
up a lot of new stations for this service.
Q10 Chairman: In effect, the rails were
there, the service was there but it was only long distance. What
you did was start to run a local service?
Mr Lundin: Yes. We started with
two branch lines in 1985 with approximately 250,000 passengers
a year. Today, we are running six lines with approximately 900,000
passengers. The goal is to have 1.4 million passengers when the
present contract runs out in 2007. We have a five year contract.
Q11 Chairman: Do you know what proportion
of your population had access to a railway line before you reopened
all the local services?
Mr Lundin: Not exactly. The present
situation is that our county is a forest county with a lot of
people living in villages and small towns. Access by foot to the
railway station is a distance of two kilometres. More than 60%
of the inhabitants in our county have less than two kilometres
distance to a railway station. That is also a result of reopening
a lot of old stations. For example we have two or three stations
in the big cities when, from the beginning, there was just the
one station. All 13 municipalities in the county have railway
stations. That is as a result of the decision that we made in
the early 1980s. There was a discussion on closing railways because
there were very few passengers on the local railways. In our view,
the local railways were part of a bigger network. This year, we
have prolonged the service. In the beginning it was a service
with 35 kilometres. It is now a service with 120 kilometres with
the same trains. We are running direct, regional trains.
Q12 Chairman: If I said to you what is
the one thing that you think has made it possible for you to get
more passengers, what would you say?
Mr Lundin: We used the old trains
before. The train was the same so it was not because of that.
We made it much easier to use those trains. One of the success
stories was that we could go all the way to an inner city. Before,
it was to go a short way to a junction; then out on a platform
with cold weather and things like that, with delayed trains with
a lot of people on board. It is much more comfortable to have
one train all the way.
Q13 Chairman: Did you find problems with
integrating your local trains with the long distance trains? If
you took over rail that had been running long distance services,
did you have a problem integrating your local ones?
Mr Lundin: No. We have two main
responsibilities. One is for the passenger to get to work and
school. That is the regional transport. We also have responsibility
for long distance and that means the same train comes to the junction
where people can transfer, as you have in Britain. Perhaps you
have even a better system. We have a system where you can buy
a ticket all the way and that fare goes to the line operator.
Our contract is for competition for track service, but we also
have competition on-track because it is a high speed service and
we still also have a regional service. For people who can afford
have an hour extra travelling time, they could pay half the price
by using the regional service. We have permission to use all the
railways in our county but we also can get acceptance to run over
one country border.
Q14 Mr Donohoe: In terms of the increased
numbers that you have achieved, is that because you have opened
new stations or have you worked out where the additional numbers
have come from? Is it from existing stations? Where have the increases
from 750,000 to 900,000 come from?
Mr Lundin: The big step in the
beginning was that we opened up more lines from 250 to 500 or
600,000 passengers. A big part of the success is that we nowadays
have a longer service, particularly in Sweden where there are
a lot of car users. We have 500 cars per 1,000 inhabitants which
means we have to be more competitive. We compete better on longer
distances with railway. Shorter distances are more for buses.
We could run for perhaps one hour with a train and make it much
more cost effective for the passengers. As we have the longer
service, we have new passengers and also in Sweden one hour is
a very interesting time limit because it is the limit that you
afford for public transport, for a car user, to go to work.
Q15 Mr Donohoe: Have you done any surveying
on that aspect? Do you know if there has been a shift from being
in a car to rail?
Mr Lundin: We have done a lot
of surveys about times which are accepted from the passengers'
point of view. It seems travelling time from 30 or 40 minutes
does not affect them. When you come to one hour, you come close
to a limit. You do not tend to work so far away from home. You
find another solution or perhaps you move. It has been a goal
for the county council to have an enlarging by using rail. The
rail system is the only system that could expand by higher speed.
Q16 Mr Donohoe: Do buses compete with
rail?
Mr Lundin: No. That is the reason
we are responsible for the bus and rail service. We have had the
bus service from 1981 and the rail service we started responsibility
for from 1985. The bus service is not on long distance. In the
area we are responsible for we use buses for feeder lines and
city transport and rural areas without rail. We give priority
to the railway.
Q17 Mr Donohoe: You control the buses?
I thought buses in Sweden had gone private.
Mr Lundin: The bus system is going
on a gross contract with private operators. I think that is the
way you have it in London Transport.
Q18 Chairman: Yes, it is franchising.
Mr Lundin: Yes.
Q19 Clive Efford: Have you been able
to produce any statistics on modal shift from car to your rail
services?
Mr Lundin: No. It is a problem
that we have increases in the numbers of people who are commuting
to work. When we started in the early eighties, it was quite seldom
that people travelled more than half an hour to come to work but
today it is normal to take an hour.
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