Further written evidence from 51M (HSR
109A)
MCNULTY
REPORT
Further to our recent submission to the Committee,
the publication on 19 May of "Realising the Potential of
GB Rail",[75]
Sir Roy McNulty's report into value for money in the rail industry,
raises a number of new and important issues in relation to the
case for High Speed Rail which we believe the Committee should
consider in forming its view.
The study was set up to investigate why the costs
of the rail industry in Britain are significantly higher than
for comparable European networks. The report confirms that the
efficiency gap could be as high as 40%. One of the key conclusions
was that an important factor is the lower level of train utilisation
in this country, with on average fewer passengers using each train.[76]
The report therefore recommends that there should be much better
use of existing capacity:
"There should be a move away from 'predict
and provide' to 'predict, manage and provide', with a much greater
focus on making better use of existing system capacity."[77]
The study also identified a bias in the planning
system towards capital expenditure.[78]
This is illustrated by the Network Rail "Route Utilisation
Strategy" process which captures the plans and aspirations
for using key parts of the rail network from existing and potential
users. However, rather than prioritising these on the basis of
economic value, the process tends to look for physical solutions
which enable all the aspirations to be met, in effect, "predict
and provide", an approach which was dropped for the road
network some years ago, and has now also been implicitly dropped
for airport capacity in the South East.
These issues are brought together in recommendation
6.3.7:
"The Study considers that industry, together
with the ORR and the DfT, should review incentives and responsibilities
for the efficient management of capacity. There needs to be at
least as much focus on train utilisation (the number of passenger
km per train km) as there is on track utilisation (the number
of train km per main track km). Existing approaches appear to
focus much more on track utilisation and the provision of train
paths, but whilst that is important, the unit costs of carrying
passengers are influenced heavily by train utilisation, which
does not appear to be a primary focus for any organisation within
the present system."
We believe the approach we advocate through the development
of our "Optimised Alternative" is entirely consistent
with Sir Roy McNulty's recommendations. We have identified low
risk, low cost approaches which increase capacity on the existing
network on an incremental basis as and when it is clear that additional
capacity is needed. This is principally achieved through increasing
standard class capacity on each train, directly improving train
utilisation; our proposals give a potential increase in standard
class capacity on the West Coast Main Line of 211% over the 2008
base used by DfT in its evaluation of HS2—over three times
the base capacity. Our approach would also significantly improve
the industry's financial performance.
In contrast, the proposed HS2 project is a clear
and dramatic example of the failures that he has identified. Even
on DfT's own optimistic evaluation, the project would have a net
cost to the taxpayer of £17 billion over 60 years.
June 2011
75 http://www.dft.gov.uk/pgr/rail/strategyfinance/valueformoney/realising-the-potential-of-gb-rail/pdf/realising-the-potential-of-gb-rail-summary.pdf
Back
76
Executive Summary, paragraph 4; also section 2.3.4, figure 2.12 Back
77
Executive Summary, paragraph 23 Back
78
Section 4.4 Back
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