The Department for Transport must feel like a rabbit in the headlights. The East Midlands franchise award limped through, but has since been legally challenged, initially by Stagecoach, then also by Arriva. The award of the new South Eastern franchise has been repeatedly postponed, and the West Coast Partnership award is drifting too. The pensions issue looks to be pretty intractable, with the RMT union threatening a national strike ballot. Apparently Abellio was the only franchise bidder prepared to swallow the pensions risk, although its willingness to do so in future franchise bids must be in doubt – it’s ironic that East Midlands employee pensions are potentially guaranteed by the Dutch government!
All the franchises awarded in the last few years seem to be in serious financial trouble. FirstGroup has already made massive provisions for losses: £106 million for TransPennine Express and £102 million for its share of South Western, in each case ‘the maximum unavoidable loss under the franchise agreement’, after which the company will presumably hand the keys back.
Abellio has discovered that the protection offered by the linkage to central London employment for Greater Anglia no longer works, apparently because increasing numbers of its commuters no longer travel daily, and Northern is seeking financial cover for the impact of the delays to Manchester – Preston electrification.
National Express withdrew from the British franchise market in 2017, selling its last franchise, c2c, to Trenitalia.Dean Finch, its Chief Executive, has reportedly said to his Board that they should shoot him if he recommends bidding for rail franchises in this country. Stagecoach has now followed suit, reflecting that company’s anger at DfT’s handling of recent competitions. I would guess that DfT delayed telling Stagecoach that it was disqualified from East Midlands and West Coast until the last minute to retain competitive pressure on other bidders – a short-term fix that does nothing to engender trust in the future. FirstGroup also appears unlikely to bid again.
In the midst of this crumbling edifice, the only happy franchises are those working under direct awards. Great Western is the clearest example; it is profitable, and its Managing Director, Mark Hopwood, is in the happy position of being able to get on with the job, including surprising initiatives such as operation of short formation HSTs in the West of England and the introduction of tri-mode multiple-units on the North Downs line. Great Western is also taking over operation of Heathrow Express, albeit under contract to Heathrow Airport Ltd, and, having suffered for years through the traumatic Great Western electrification project, will at long last introduce a new timetable in December with an impressive step change in both frequencies and journey times.
Open access is also increasingly threatening the stability and value of franchises. Grand Central is planning to launch its Blackpool – Euston services in spring next year. Virgin, Stagecoach, SNCF (French Railways) and Alstom, whose consortium bid for the West Coast Partnership was disqualified, are applying to the Office of Rail and Road for access rights to run 12 Liverpool – Euston services each way from May 2021. If these rights are granted, and given the precedent of the ORR’s agreement to First Group’s Edinburgh – King’s Cross services this seems quite likely, the Virgin services will bite chunks out of the revenues of the West Coast franchise. As the trains are also going to stop at Tamworth and Lichfield, London Northwestern’s Trent Valley service will be hammered too.
So, what does Chris Grayling or his successor do next? Conventional franchise competitions, descendants of the original process set up in 1996, look to be dead in the water. In the short term, I guess the government continues to muddle through, continuing with direct agreements to keep existing franchises going, and hoping that the Williams Review comes up with a magic solution. The East Coast partnership is impossibly complex and almost certainly a non-starter, so LNER will stay in the public sector for the time being, potentially joined by other franchises as and when existing operators hand the keys back.
Much of this has been lost in the deafening noise of Brexit, so hasn’t really hit the media yet. But at some point, the National Audit Office and the Public Accounts Committee will have a field day.
Like Great Western, CrossCountry is operating under a direct award agreement, although disappointingly this hasn’t resulted in clear action to tackle the systemic overcrowding on its services. Most trains are still only four or five cars and are generally overcrowded at some stage during each trip. Sheffield and Leeds, for example, both have lots of overcrowded peak services today, but TransPennine Express and Northern are in the process of introducing new units, with significant extra capacity. In contrast, Voyagers will continue to run packed to the gunwales at peak times, with no current plans for alleviating this. When the Midland main line gets its new stock, perhaps the Meridians can continue to earn their keep on CrossCountry?
The Conwy Valley line from Llandudno Junction to Blaenau Ffestiniog was closed on 15 February because of flood damage.At the time of writing, it is expected to reopen ‘during July, ahead of the Eisteddfod in Llanwrst’. This line has regular infrastructure problems, mostly from flooding, and, quite understandably, Network Rail doesn’t perhaps give it quite the same priority as restoring the sea wall at Dawlish.
The service is a one-train operation, with six trains each way, although I suspect there are rarely any passengers on the 05.30 from Llandudno Junction, and precious few on its return working at 06.24 from Blaenau Ffestiniog. While there are only penny numbers of passengers in the winter, in summer some of the trains are reasonably busy, in part with people connecting with the Ffestiniog Railway at Blaenau. But taking into account the recurring significant infrastructure costs, all-in this must have the highest cost per passenger anywhere in Britain by a long way. Or can anyone nominate another candidate?
By the time you read this, the UK will have a new prime minister. Even if only some of the tax cuts now promised by both candidates come to pass, with the Chancellor insisting none are funded and that a ‘no deal’ Brexit could cost nearly £100 billion, you can be sure that one way or another the Treasury will be on the hunt for more Departmental savings before the year is out, from which the Department for Transport, if indeed it continues to exist, will not be able to emerge unscathed.
Inevitably, the spotlight will fall on the DfT’s most expensive project: High Speed 2. The eastern Phase 2b branch of the currently-proposed HS2 ‘Y’ from Birmingham through the East Midlands to Sheffield and Leeds (see map on p46) seems the most at risk. This is partly because it is further into the future so cancellation would have less impact (but also therefore produce fewer immediate savings). And partly because the business case is said to be weaker, and partly because there are many in the north who, while they support the concept and its eventual construction, see the need for Northern Powerhouse Rail linking Leeds to Manchester across the Pennines via Bradford as a much greater priority. They argue that, if HS2 trains from Leeds must in any case reach London via Birmingham and HS2 Phase One, then doing so via a new NPR joining HS2 Phase 2a somewhere south of Manchester Airport is not geographically such a daft idea, and would potentially deliver NPR earlier. Others however fear that delaying construction of the 100-mile eastern arm through the East Midlands would risk it never happening at all.
But that might not worry those to the east of the East Coast main line or those to the north of York. For the former, particularly those in Lincolnshire, setting off some 70 miles west to reach the nearest station on HS2’s eastern arm is a non-starter, while for those further north, the improvement to be gained by diverting from York to Leeds and then Birmingham to reach London via Old Oak Common is much more marginal. Many in both camps would prefer to see selective improvement of the East Coast main line to high-speed standards German-style, rather than an entirely new end-to-end line.
But what is Plan B if HS2, or even just the eastern branch, is cancelled? To the south, East West Rail is gearing up for new services, in the capital the London Assembly is protecting the path of Crossrail 2, and newly-inspired Wales is pushing ahead with over 100 miles of new electrification and planning lots of other goodies. But in the north of England, once the new trains now at last beginning to appear on TransPennine and Northern are all in service, there is nothing, save perhaps some already 35 years old ex-London and South East electric multiple-units repurposed to run on hydrogen, to look forward to. It seems very unlikely that money saved by not building HS2 would be available to anything like the same level for alternative rail projects.
Meanwhile, as political debate continues to surround HS2, Northern Powerhouse Rail and the general deficiency of rail going forward in the north, nobody seems to be objecting much to proposals for the third runway at Heathrow, despite the little-reported undertaking from outgoing Prime Minister Theresa May that the UK will reduce its greenhouse gas emissions to net zero by 2050, meaning that in addition to rail and road needing to be all-electric, flights – and particularly domestic flights – would also need to be curtailed.
Logic suggests that Mrs May’s carbon reduction aspiration should boost the case for high-speed rail at the expense of more airport capacity, yet the proposals for Heathrow flatly contradict this target, proposing a 50% increase in flights by the same year, including a commitment to providing flights to ‘all domestic destinations’. Presumably those pushing the third runway know of somebody somewhere who, unbeknownst to the rest of us, is building a carbon neutral, electrically-propelled jumbo jet!
Heathrow’s proposals include demolishing the entire village of Longford and a sizeable part of adjacent Harmondsworth, over 750 homes in all. That puts HS2’s much-publicised proposed demolition of a small housing estate near Doncaster somewhat in the shade! Then there is the proposal at Heathrow to provide the biggest car parks in the world for 53,000 vehicles, rather at odds with the desire to dissuade passengers from using cars to reach the airport by imposing a congestion charge of up to £15.
But they might have to use their cars anyway, because to increase the percentage of public transport use will require the construction of two new rail links – one from the Great Western at Slough and the other from the South Western around Staines – neither of which is yet remotely near being agreed, funded or authorised and certainly would not be available in readiness for the proposed completion of the third runway in 2026. Passengers will have to continue to rely on the Elizabeth Line trains which will eventually reach the airport, the Heathrow Express and an improved Piccadilly Line from 2024.
The proposals are vehemently opposed by thousands of residents, several local authorities and current London Mayor Sadiq Khan as an ‘environmental disaster’. That’s a similar label to that used by objectors to HS2, so why are we not hearing the same level of criticism and debate? You will recall that Mr Khan’s predecessor, one Boris Johnson, favoured a new airport in the Thames estuary and pledged to lie down in front of the bulldozers to prevent Heathrow from expanding – but then failed to vote against it in Parliament as MP for Uxbridge and South Ruislip, a constituency not a million miles from Heathrow.
Which project, if cancelled, would be most damaging to an environmentally aware post-Brexit Britain? Despite some of its critics, HS2 generally has good environmental credentials but relies on public funding. Heathrow, despite desperately trying, is far less acceptable environmentally. It is claimed that expansion will be privately funded, although the £14 billion price tag seems to refer only to the construction of the new runway and associated works. It is not clear how those two apparently vital but as yet far from agreed new Western and Southern Rail links will be funded. Given the Government’s already poor record on climate change, any contribution from the public purse should be unthinkable.
For years the Department for Transport has been telling us all that Pacers will be gone by 31 December 2019 as disability legislation takes effect. It was decreed in the new Northern franchise, and Rail Minister Andrew Jones has repeated this undertaking to Parliament on several occasions. As recently as mid-June he told me ‘we expect Northern to remove all Pacers from the Network by the end of the year’. But a fortnight later, at the launch of Northern’s new (and very nice!) CAF-built Class 331 electric trains, it became clear that because of late deliveries and the time needed for acceptance, not all the 101 two- and three-car diesel and three- and four-car electric trains are likely to be available for traffic by the December deadline.Northern was non-committal about what might happen then, but didn’t deny that the company might again be short of stock in early 2020 if all Pacers were withdrawn as planned. Finally, in a written answer on 12 July, Lords Transport Minister Baroness Vere admitted that ‘due to delays in manufacturing of new trains, a small number of Pacers may continue on the network into the beginning of the new year to ensure a stable service for passengers’.
Neither DfT nor Northern wants to admit publicly the possibility, but can expect some major opprobrium if a stock shortage proves to be real and prolonged, leading to more of the cancellations and short-formed workings prevalent in 2018 from which Northern is only now recovering. Inevitably there would then be questions as to why some of the many perfectly usable trains now in store or going off-lease could not be used in the interim. Yet another example of the way in which the post-privatisation fragmentation of the rail industry now works against the interests of its customers!
