Return to Archive -by date - by topic - 2003.
More money is flowing into the main line railway than at any time we can remember. Yet for all the Government's munificence, the news from the railway continues to get worse.
In the latest issue of the Strategic Rail Authority's National rail Trends covering the quarter July-September the news is not good
After their climb from the trough of the last recession, passenger journeys are on a plateau. Passenger revenue was down 1% on the same quarter a year ago, although up 1% on the previous quarter. Year on year, freight tonnage was down by 11% and tonne kilometres by 5.5%.
As for performance, overall, just under 80% of passenger trains were arriving on time, with the Regional train operating companies marginally the best performers. Not surprisingly the TOCs have been getting in their apologies first.
Great Western was handing out goody bags, including a half bottle of wine, with a letter of apology from Director Elaine Holt in which she confessed that while she would like to tellcustomers things would get better ‘unfortunately I cannot'. ‘The many difficulties experienced in the Great Western Zone will not be solved in the short term' she added candidly.
Connex sent all its season ticket holders an entertainment voucher for £15, together with a similarly abject letter from Managing Director Olivier Brousse. As we went to press came the news that despite around £400million in subsidy since the franchise was awarded and a buoyant economy Connex now needed £58million to see it through the current year.
Yet another franchise owner had got their sums wrong. And while the fall in London employment is now hitting the commuter TOCs in the farebox, up to now conditions have been in the operator's favour.
With a string of TOCs having to be rescued, and rumours of more to come, it is not surprising that the declining subsidy negotiated by the Office of Passenger Rail Francishing has turned sharply upward. Yet, as you can read in this issue, the SRA is asking bidders for replacement franchises to put forward subsidy profiles based on cost reductions of 10% and 20%.
Whether anyone will bid on this basis is debatable. If they do it could well turn out to be a case of the winners envying the losers. Only line closures are ruled out, which means economies can come only from fewer staff and fewer trains.
This is an indication of the cost crisis facing the railway. And all credit to SRA Chairman Richard Bowker for spelling out the crisis unambiguously.
His blunt warning was misunderstood by some of the media which interpreted his speech to the Rail passengers Council as saying that the railways are broke – to quote the London Evening Standard. Not so.
The railway is ankle deep in money as never before, unfortunately, because of cost inflation, this bonanza isn't enough to pay for the projects in the SRA's Strategic Plan. On top of which a number of unexpected demands on the SRA's budget have emerged, not least the £1billion – at the last estimate - for the Southern Region power supply upgrade.
So, rather like some grounded vessel in the days of sail, the SRA is busy throwing things over-board to lighten ship. And as the guns go over the side Captain Bowker and Lieutenant Steer can only hope that once the ship is floated and underway again, it won't be too enfeebled to fight.
Thus expect nothing new, and perhaps some projects overtly cut back in the 2003 Strategic Plan expected this month. Richard Bowker has made it clear that if costs cant be reduced schemes will be deferred and projects that go ahead will have the scope reduced. As an example he instanced dropping capacity for growth from the Southern Region power network.
Where the money is going has yet to be determined with any rigour. Anecdotal evidence from experienced railway managers suggests that Network Rail is getting from its possessions only 40-50% of the work British Rail achieved.
Another estimate says that for every pound given to its contractors Network Rail sees 40 pence worth of concrete and steel in the ground. Compare this with new trains where a new electric multiple unit is up to 40% cheaper than the BR equivalent.
Hopefully the Rail Regulators Interim Review of Network Rail's track access charges will expose the cost structure of the maintenance contractors and the efficiencies of possessions. Certainly, we would not expect Network Rail's expectations of more money to be fulfilled.
If today's infrastructure costs are real then the railway is doomed to rapid decline. Consider the recently announced plans for road investment. It is hard to deny that the £2.5billion allocated to widening motorways and turning the A 303 into a dual carriageway from Basingstoke to Exeter is better value for money from the taxpayer's point of view than £10billion spent on renewing the West Coast Main Line for 125mile/h.
Even worse, when you can cruise down the A303 in the comfort of your own car, reliably putting 50 or 60 miles into each hour and running door to door, will you really use the Waterloo-Exeter train service.
So we greet the new year in an apocalyptic mood. Of course the railway has been there before. Shortly after Richard Bowker's RPC speech an elder statesman of the industry remarked to us that he now appreciated the trap his then boss BR Chief Executive John Welsby was in when the economy last turned down.
But then Welsby had a machine, skilled in spending effectively when the good times rolled and protecting the mother railway when the Treasury retrenched. At Network Rail Chief Executive John Armitt and his Deputy Iain Coucher face an enormously testing time. And they will only succeed if they attack the root of the cost crisis rather than imposing cuts all round. They and the SRA have to get into the habit of telling people who come in with ludicrous prices to go away and get real.
Is there naught for our comfort? Well in the east the sky is brightening. If Railtrack can get the New Maintenance Policy – effectively bringing the direction and management of maintenance and renewal in house – up and running costs should start to come down. If SRA can let the region wide Anglia Super Service Delivery Unit to a management of all the talents, operation could improve.
And then they could be brought together to create functioning railway again.
With that small vision we wish all readers a happy new year.