High Speed Rail - Transport Committee Contents

Further written evidence from 51M (HSR 109A)


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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Prepared 8 November 2011