Investing in the railway - Transport Contents

5  Rolling stock

40. A repeated theme of the evidence we received was the lack of a clear answer to the simple question: who is responsible for ensuring that there are trains available to run on new and electrified lines? DfT official Roger Jones told us that "there would be no point in Government investing very substantial sums of money in electrifying the railway and then not seeing electric rolling stock there".[136] This appears to have been exactly what has happened on the Todmorden Curve (which will reduce journey times between Blackburn, Burnley and Manchester), and on the Liverpool to Manchester electrification, where there is likely to be a year between the completion of the electrification of the line and the operation of a full electric service, due to a shortage of rolling stock.[137] As a result of this experience, David Brown, representing Rail North, told us that a theme of the Department for Transport's electrification programme is that "the infrastructure is there, but there is a shortage of rolling stock to provide train services across the infrastructure".[138] Mr Brown was clear that the only way to gain the economic benefits of investing in infrastructure was to ensure that there would be running additional, longer or electric trains on the new or upgraded lines.[139] Leeds City Region and North Yorkshire County Council warned that there was a "real risk that the railway infrastructure in 2019 may be electrified and upgraded, but the service patterns and rolling stock running on it will not correspond to the needs and expectations of passengers wishing to use it."[140] Malcolm Brown, Chief Executive Officer of Angel Trains, called for more "joined-up thinking" from the rolling stock operating companies, train operating companies and Network Rail, building on a long-term strategy from Government to "align investment in the infrastructure with both new train procurement and the refurbishment of trains".[141] Pteg argued that the fact that decisions on rolling stock and decisions on infrastructure were "often made by separate people at distinct points of time" was "an important weakness" in the rail network.[142]

41. An additional factor has been the length of franchises, which does not always match the length of leases of rolling stock. Paul Francis, Managing Director at the rolling stock operating company, Porterbrook, told us of new investors who wanted to purchase more rolling stock, but instead were having to be told to wait until the franchise was re-let.[143] This lack of alignment has been a particular problem in the last two years, following the decision to issue short-term "direct awards", extending the life of a franchise, during the suspension of the franchising process following the failed competition for the Intercity West Coast Line.[144] This was demonstrated in March 2014 when it was announced that nine Class 170 Turbostar trains in the TransPennine Express fleet would be transferred to Chiltern Railways. The lease of the rolling stock had been aligned with the franchise, until a direct award extended the franchise from April 2015 to February 2016. As the lease had been due to end at the end of the franchise in April 2015, the rolling stock operating company, Porterbrook, signed a contract with Chiltern Railways to lease the trains on a long-term basis. The short-term direct award to TransPennine Express left concerns that the transfer of trains to Chiltern Railways would leave a shortage of trains on the line. There was confusion among who was ultimately responsible for preventing this from occurring. Nick Donovan, Managing Director of TransPennine Express, told The Times in October that "the Department for Transport should have intervened" in the case, noting that a shortage of replacement trains could result in services no longer being able to run.[145] The Secretary of State stated that the Department for Transport could not "unreasonably withhold consent" for Chiltern Railways to lease the stock for use on the soon to be introduced Bicester to Oxford services.[146] Paul Francis, Managing Director of Porterbrook, told us, however, that the Department had been involved in all the discussions around the transfer of the fleet and that the physical transfer of the trains will not happen "until the DFT and the operator have agreed that it is the appropriate thing to do".[147] This would be, he suggested, "maybe 2016", when other diesel trains have been cascaded to the region.[148] Mr Francis sought to clarify further:

    TransPennine Express has the right to continue to operate and sub-lease those vehicles on that particular line until such time as Chiltern and the Department for Transport decide that it is no longer an appropriate thing to do.[149]

42. When asked directly whether there would be a repeat of the rolling stock transfer from TransPennine Express to Chiltern Railways, Clare Moriarty emphasised that while the Department worked very closely with the industry, and was "watching like a hawk" for potential problems, the rolling stock was owned by the rolling stock operating companies and leased to the train operating companies.[150] Ms Moriarty added that it was "very difficult" for the DfT to give a categorical assurance on the issue as it did not have direct control over the parties involved.[151] The Secretary of State told Parliament in January 2015 that the Department has "reached agreement" for new rolling stock on routes in the North of England, to maintain services following the transfer of TransPennine Express trains to Chiltern Railways, and also add an unspecified number of new carriages on other routes.[152] The Rail Minister, Claire Perry, has stated that the average age of the carriages which form part of this "new rolling stock" is 22 years old, and that the £20 million cost will be borne by the Department".[153]

43. The TransPennine Express/Chiltern Railways issue was in part due to a shortage of diesel rolling stock. David Brown of Rail North used the Northern and TransPennine Express franchises as an example, noting that there would be a shortage of 220 carriages over the franchise, if services were maintained at their current level.[154] To achieve the economic benefits promised by the new infrastructure, some 460 additional carriages would be required.[155] Mr Brown warned that this meant that bidders able to offer a long-term lease for rolling stock would be more likely to secure the trains.[156] Councillor Shaw reported that TransPennine Express passengers were having to use "antiquated" diesel trains because there simply were not enough carriages for operators to use.[157] The Department accepted that there was "currently" a shortage of diesel trains, which we heard would last until 2016/17, when electrification was due to result in a surplus (we were warned that delays to electrification would then prolong the shortage of diesels).[158] Until electrification of lines resulted in the cascading of trains, the Department stated that it would work with the rail industry to "manage the short-term issues".[159]

44. While the cascading of trains was seen as the answer to rolling stock shortages, witnesses questioned the very principle of cascading older trains from the South East to other parts of the country, following the delivery of brand new rolling stock to the South East. Rail North noted that "most of the diesel units concerned are aged and in many cases of poor quality".[160] Mr Brown suggested that "constantly being at the end of a cascade to take trains that are fairly old from elsewhere into the North is not the best way of making the most of electrification".[161] Paul Francis of Porterbrook argued that extending the life of diesel trains by redeploying them in other parts of the country gave the network a "more economically attractive service".[162] It was, he said, a decision for the Department when they set the specification for a franchise, and for the train operating companies bidding for a franchise, to assess whether a franchise would get new or cascaded rolling stock.[163] The Secretary of State said that "part of the job" of the franchising team in the Department was to "press" the train operating companies on the issue of rolling stock.[164] Mr Francis was clear: as a commercial business his interest was to ensure his rolling stock "is deployed wherever it can be deployed most effectively".[165]

45. We heard that the responsibility for ensuring the rolling stock is available appears to be divided. The Secretary of State answer failed to clarify this point:

    Well, at the end of the day, it is between the Office of Rail Regulation and the Secretary of State, and when the tracks are ready as far as Network Rail is concerned […] The Secretary of State, ultimately, takes a lead in what is happening in the rail industry.[166]

The ORR told us that "rolling stock procurement is a matter for Government".[167]

46. The rolling stock operating company involved in the proposed transfer of trains for the TransPennine Express franchise to Chiltern Railways sought to reassure us when he told us that the trains would stay with TransPennine Express until Chiltern Railways and the Department decided to transfer them. This has only blurred the lines of accountability, as the Department was keen to stress that the factors involved in this case were outside its control, before announcing that it had worked with the franchisees to resolve the situation. We welcome the Department's commitment to making sure there will not be a shortfall of trains on the TransPennine Express line but we expect current capacity and schedules to be maintained. The Department must continue to accept responsibility for rolling stock, and ensuring that there are sufficient trains to operate timetabled services.

47. The TransPennine Express/Chiltern Railways transfer of rolling stock has been symptomatic of a fundamental weakness in the way rolling stock is leased and managed. This has also been demonstrated during the electrification programme, where a disconnect between the funding of new or enhanced infrastructure and the procurement of rolling stock risks leaving passengers stranded with no trains running on newly electrified lines. The Department must take responsibility for aligning infrastructure, franchises and rolling stock procurement. This is necessary so that uncertainty can be reduced for industry and investment made rather than deferred.

Pacer trains

48. Paul Francis, Managing Director of Porterbrook, was keen to stress that the UK had "one of the youngest train fleets in Europe".[168] The rolling stock operating companies set out the average and oldest age of the trains they lease on the UK network:[169]
ROSCO Average age Oldest trains & location
Angel19 years 29 years. Wales and North of England
EversholtAround 19 years 40+ years. Govia Great Northern line.
Porterbrook17 years 40 years. Midland Mainline and Great Western.

This did not allay the concerns we heard about the quality of rolling stock on the rail network. In particular, witnesses called for the replacement of the "Pacer" trains used in the North and South-West of England, and in Wales. The Pacer trains were built between 1985 and 1987 at "relatively low-cost", and were intended only for short-term use.[170] They are unpopular with many passengers and do not comply with accessibility regulations due to come into force in 2020—Persons of Reduced Mobility Technical Specification for Interoperability (PRM).[171]

49. In the Autumn Statement the Chancellor of the Exchequer said that by tendering for the new Northern and TransPennine Express franchises the Government would be "replacing the ancient and unpopular pacer carriages with new and modern trains".[172] The Green Book—which sets out the details of the Autumn Statement—stated, however that while the franchises will "include new rolling stock fit for the 21st century" they will "encourage" but not require "bidders to replace the outdated pacer trains with modern, better quality trains; [and] bring all the trains that remain up to modern standards".[173] It also stated that the Invitations to Tender will specify upgrades including "modern trains in order to phase out the outdated Pacer trains".[174] No details have been given for taking the Pacers out of service in the South West or Wales. In evidence the Secretary of State refused to give a date for when the Pacers would be taken out of service, stating:

    If I give you a specific date, you will then for ever be holding me to account to say it was not that particular date.[175]

Instead, the Secretary of State could only say that he hoped the Pacers had had their day.[176]

50. Malcolm Brown, Chief Executive Officer, Angel Trains, told us that Pacers were still running because there was not a replacement for them.[177] The Long-Term Rolling Stock Strategy produced by the rolling stock operating companies, Network Rail and the train operating companies stated that no new diesel trains would be required to be built in CP5 or CP6 if electrification continued.[178] We heard that there was "no manufacturer of trains, either in or outside the UK, who will commit to building a new, low-cost DMU [diesel multiple unit] for the UK market", as they believe that electrification will result in a surplus of diesel trains.[179] Paul Francis accepted that this was not a satisfactory situation for passengers.[180] Mary Kenny, Chief Executive Officer, Eversholt Rail, told us that the company were sounding out manufacturers to see if there is a specification for a DMU which it could invest in, and have a manufacturer prepared to build.[181] Porterbrook is spending £800,000 to demonstrate that a Pacer train can be modified to comply with PRM regulations to provide a "back-stop", in case of any delays with electrification.[182] In 2011 the ORR reported concerns about the safety of "the ongoing use of Pacers beyond their intended design life".[183] Mr Brown told us, as far as he was concerned Pacers were safe but because of the views of passengers and operators, Angel Trains are not planning to refurbish their Pacers, and plan instead to retire them in 2019.[184] Mr Brown noted, however, that delays to electrification would require him to "re-evaluate" his position.[185]

51. By refusing to give a date for when the Pacer trains will be taken out of service and simply saying that he "hopes" they have had their day, the Secretary of State has suggested that he does not have the powers to ensure a decent quality of train for passengers in the North and South West of England or in Wales. Alternatively, his admission that he would not like to be held to account for the Pacers' withdrawal suggests that he does have these powers, but is unwilling to match his rhetoric with action. We find it concerning that the rolling stock operating company Porterbrook is prepared to spend £800,000 refurbishing the Pacer to extend its use on our network. It is unacceptable that Pacer trains—built in the mid-1980s and of questionable safety—are still in use on busy rail lines. We recommend the Secretary of State uses his franchise specification powers to require the removal of Pacer trains from the rail network by 2020 at the latest.

52. The cascading of train carriages out of the South East may provide the most efficient way for the rolling stock operating companies to manage their rolling stock. It is concerning that the Department has chosen to order brand new trains for passengers in London and the South East, while expecting passengers in the rest of the country to be content with reconditioned older trains—cast-offs from more prosperous areas.

136   Q74 Back

137   Merseytravel (IRW0030) para 7 Back

138   Q214 Back

139   Q222 Back

140   North Yorkshire County Council (IRW0039), Leeds City Region (IRW0017) para 5 Back

141   Qq317, 318 Back

142   pteg (IRW0036) Back

143   Q354 Back

144   Q321 Back

145   "Signals of decline mount for rail route", The Times, 20 October 2014 Back

146   Transport Committee, Publications 2013-14 Session, Letter from Patrick McLoughlin, Secretary of State for Transport to Mrs Louise Ellman MP, Chair, Transport Committee, 2 April 2014 Back

147   Q327 Back

148   Qq 325-328 Back

149   Q346 Back

150   Qq70, 76 Back

151   Q76 Back

152   HC Deb, 8 January 2015, HCWS175 Back

153   HC Deb, 13 January 2015, 220238; HC Deb, 13 January 2015, 220240 Back

154   Q221 Back

155   Q221 Back

156   Q226 Back

157   Q230 Back

158   Q373 Back

159   Department for Transport (IRW0020) Back

160   Rail North (IRW0016) para 29 Back

161   Q219 Back

162   Q332 Back

163   Qq 332-333 Back

164   Q519 Back

165   Q335 Back

166   Qq 505-506 Back

167   Office of Rail Regulation (IRW0024) Back

168   Q384 Back

169   Qq360-366 Back

170   Porterbrook Leasing Company Limited (IRW0061); South Yorkshire Passenger Transport Executive (IRW0009) Back

171   The Institution of Engineering and Technology (IRW0031) para 27; Peninsula Rail Task Force (IRW0027) para 27; NECTAR (IRW0023) para 2.i; Porterbrook Leasing Company Limited (IRW0061); Rail North (IRW0016) para 30; TravelWatch NorthWest (IRW0007) para 10 Back

172   HM Treasury, Chancellor George Osborne's Autumn Statement 2014 speech, 2 December 2014, accessed 15 January 2014 Back

173   HM Treasury, Autumn Statement 2014, Cm 8961, December 2014, p 50 Back

174   HM Treasury, Autumn Statement 2014, Cm 8961, December 2014, p 86 Back

175   Q509 Back

176   Q507 Back

177   Q368 Back

178   Angel Trains, Long-term Passenger Rolling Stock Strategy for the Rail Industry (February 2014), p 19 Back

179   Q347 Back

180   Q348 Back

181   Q350 Back

182   Q376 Back

183   Office of Rail Regulation, Health and Safety Report 2011 (July 2011) , p 4 Back

184   Qq 368, 380 Back

185   Qq 381-382 Back

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© Parliamentary copyright 2015
Prepared 23 January 2015