Examination of Witnesses (Questions 20-39)
MR INGEMAR
LUNDIN
3 NOVEMBER 2004
Q20 Clive Efford: Mr Donohoe asked you
about how you had been successful in increasing the number of
people using your rail services. Is that due to economic expansion
so that there are more people using the trains or has it been
due to people moving to areas so that they can make use of your
services? Is it due to people being attracted to certain areas
because of the improved transport services that you are providing?
Mr Lundin: Yes. Taking the average,
not just my service in my county, it has been a possibility for
people to live here and work there. Our main group of passengers
is students who go to universities and high schools. Before, they
lived in the city where they had the university. Today they can
use the daily service.
Q21 Clive Efford: What has been the impact
of your improved services on car use?
Mr Lundin: I am not sure if it
has been a big impact in the long distance service. It is a good
idea for us to test it. It is also a question of which lines and
that we have enough departures to be interesting for people. I
have the feeling that if we are to be interesting for a commuter
service we must have in Sweden a level of departure that is at
least one departure per hour or even more.
Q22 Clive Efford: Do you have problems
of congestion on rail, particularly competing with high speed
services going over greater distances using the same lines as
perhaps slower, local services?
Mr Lundin: Not so much on these
lines, no. We also try to get somewhat quicker ourselves so we
should not be in the way of the high speed service.
Q23 Clive Efford: Do they use the same
track?
Mr Lundin: Yes, most of the lines
are regional tracks. It is only one of the six lines that I refer
to that is on the main line. The freight service is quite big
in Sweden. We decide when and where we should use the track.
Q24 Clive Efford: Do freight trains share
the same tracks as your regional services?
Mr Lundin: Yes.
Q25 Clive Efford: Does that cause a congestion
problem?
Mr Lundin: Yes, in certain areas.
The freight service also has high demand to be on time. That is
a problem for us.
Q26 Miss McIntosh: If I could make my
declaration of interest, in addition to being half Danish I also
have an interest in First Group and I am currently undertaking
a placement with the Industry in Parliament Trust with Network
Rail. We are very privileged to have you before the Committee
today. You are very welcome here. You say that the marketing has
quite a large role in increasing the passenger uptake. Would you
show the Committee what form the marketing takes?
Mr Lundin: Marketing is to make
it clear to people that what has been there all the time has changed.
It is always the problem that the train has a long tradition and
people perhaps remember the days when you used to have to go to
school or something like that. Now we have new trains it is part
of the marketing and it is much more comfortable on board the
trains. We also use some marketing to tell people that using this
regional service means you get a higher service at a lower cost.
It is low cost if you go a long distance. If you use the regional
service, it is cheaper than the high speed services. All our fare
system which includes a discount card is available on the train,
on the same routes as on the bus service. With the same ticket
you can use the train and then transfer to a bus.
Q27 Miss McIntosh: Is it marketed as
being 10 journeys for the price of so many? Do you market it as
an integrated service with complete cross-over between modes of
transport so that it is cheaper if you buy so many tickets?
Mr Lundin: Yes. In general, our
fare system is such that we are trying to get customers to come
on to our service. That is why we have about 70% on average cost
cover for our authority. It means the decision makers are prepared
to give that treatment to public transport in our county. It means
30% of the total cost of the bus and train service altogether.
As it is a net contract, it is also very important that we have
handed over a lot of responsibility for the fare system to the
operator. The operator gives to the net contract a lower price
but keeps the income from his on board tickets and those are usually
the long distance tickets. The operator also has some flexibility
and benefits for the passengers. For example, you can go
everywhere in this area for 100 Swedish krone on a Saturday. A
lot of that is the operator's marketing.
Q28 Miss McIntosh: How do most of your
customers buy their tickets? Do they buy them in person on the
day of travel? Do they purchase in advance over the phone or on
the internet? What is the most usual type of purchase?
Mr Lundin: On board the train
and that is a situation which is better in the UK than in Sweden.
Most of our stations do not have ticket office. I am very impressed
not only by your investments. I have seen British trains for 20
years and I am impressed to see the improvements.
Q29 Chairman: Are you sure you have been
travelling on British trains?
Mr Lundin: Yes. We can learn a
lot. We sell our tickets through the train crew and the train
crew also sell our magnetic cards.
Q30 Miss McIntosh: The cheap fares?
Mr Lundin: Yes.
Q31 Miss McIntosh: Could you explain
to the Committee what is the role of the Passenger Transport Executive
in your regional system?
Mr Lundin: What is a Passenger
Transport Executive?
Q32 Chairman: Miss McIntosh was not here
when you were talking about county involvement. In this country,
a local authority would be involved in what we call the Passenger
Transport Executive but what you are saying to us is the county
will have control of economics. It will negotiate a franchise
with a personal operator and there is a degree of flexibility
in fixing fares that will enable the operator to decide what they
want to do. Is that right?
Mr Lundin: Yes. That was a change
some years ago. It was a demand from the state to give us a subsidy
that it should be a net contract in that case.
Miss McIntosh: Do you believe that the
operator should have the final say in setting the fare, operating
the service and the involvement of the local authority? Are you
happy with the situation currently?
Chairman: Is the final arbiter the local
authority? That is what Miss McIntosh is asking.
Q33 Miss McIntosh: No. Do you believe
that the operator has sufficient control at the moment?
Mr Lundin: Yes, I believe the
operator has sufficient control during this five year contract
period. It is a very short period. The price for us is that we
have the responsibility to own the vehicles. It is not operational
leasing; it is financial leasing. We have bought trains to get
private operators because no operator, not even the huge European
companies, could take the risk of a five year contract to lease
their own trains.
Q34 Chairman: I am sure you realise we
have a magnificent mess where the state does not own the rolling
stock. The person who does own the rolling stock makes an enormous
amount of money and the operating companies lease from them. You
implied earlier on that you put conductors on your trains. When
it was owned by Swedish Railways, did they have no conductors
on the train and then you put conductors on the train? Is that
what happened?
Mr Lundin: Let us start before
1985. That era there was a subsidy that went to the state railway.
They have rules from the beginning, not written rules but they
had always been there. For example, it should be a conductor and
a driver and it should be a person at the station who coupled
together part of the train. Then we had a private operator starting
in 1990 who said, "We wish to do it in another way."
It was possible for them to have single operator trains and the
driver also could couple together parts of trains. It was much
cheaper that way and that was a benefit for us.
Q35 Chairman: Did you put the conductors
back onto the trains?
Mr Lundin: Yes. Now we have conductors
back in service. We have made investments in bigger trains, shorter
travelling times and that means that the driver could not sell
the tickets so therefore we have to have a train crew on board.
That means we are declining the rate of cost coverage to about
45% or something like that today. We will reach about 50%, I guess,
when we have filled the gap for our ticketing system. Before we
had old trains with no capital cost at all. That means that was
higher cost coverage before, almost 70%. We used that in the first
step to refurbish those trains. You cannot have it all the time.
Sooner or later, you must think of the future and make investments.
Q36 Ian Lucas: Are local rail lines separately
designated from the conventional rail network in Sweden?
Mr Lundin: Not today. It was in
plans before they divided into the national network and the regional
network. You get investment subsidy from different sources. Today,
it is put all together.
Q37 Ian Lucas: You have the same safety
standards, for example, on your network as on the main network?
Mr Lundin: Yes, and not only on
the network. The company we have must have the same security level
as big companies. They must have managers that are responsible
for security on board the trains.
Q38 Ian Lucas: Are most of your passengers
commuters or tourists? What is the main area?
Mr Lundin: Very few of them are
tourists. That might be a problem for us because we are not so
touristic. We send our inhabitants to the coast in the summer
time. I have no figures but about two thirds are commuters. We
see them daily. One third are long distance travellers who travel
less often but it is a large number of people.
Q39 Ian Lucas: Do you think that one
of the reasons for the fact that people are travelling longer
distances now to go to work is because of your service?
Mr Lundin: Yes, and especially
going to university and school.
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