IN last month’s column I referred to the withholding of an announcement about £300 million investment in the Tyne & Wear Metro system, which proudly proclaims to be “the best performing rail operator in the UK last year”.
Shortly after Railnews went to press, an announcement was finally forthcoming from the Department for Transport – not by rail minister Tom Harris, but by Rosie Winterton, Minister of State for Transport with responsibility for regional policies.
She announced approval of “almost” £300 million for the “iconic” Metro system – owned and operated by Nexus, the Tyne & Wear Passenger Transport Executive (PTE) – to “upgrade this service and ensure smoother running trains, better stations, better services and better pro-vision of information to customers”.
As ever, the punchline was tucked away at the end of the DfT’s press release – in Note 2, actually, of the ‘Notes to Editors’ – which stated the announcement “means that Nexus can commence the procurement of an operating franchise”.
In other words, the Government has approved plans to update the Metro, not all at once, but in stages, on condition that its operations are privatised.
The existing fleet of 90 Metro trains will undergo refurbishment, starting in 2010, but their replacement will not begin until 2019 (when they will be 40 years old!).
The good news appears to be that responsibility for Metro’s infrastructure will remain with Nexus and the existing management team will be allowed to bid, against expected stiff competition, to continue operating the system.
This is a far cry from British Rail being disallowed from bidding for any passenger franchises when privatisation began in 1994/5, and from the privatisation later imposed on London Underground – whereby the operations remained with Transport for London, but management of all infrastructure and trains was contracted to two private consortia (although the largest of these, Metronet, went bust last year and its responsibilities have now been taken back by Transport for London).
Now, however, the Tyne & Wear Metro may become something of a litmus paper test for the future structure of rail infrastructure ownership and operations, since much has been said (including in this column) about the possibilities of returning to some form of ‘vertical organisation’ in Britain’s railways.
The fact is that Tyne & Wear Metro, opened in 1980, is currently the only railway in England that remains with a vertical organisation structure, and is owned and operated within the public sector.
When I took a look at the Metro earlier this year, I observed it was a very impressive operation, even though most of its assets were coming up to 30 years old (compared with the franchised TOCs, whose rolling stock had an average age of only 14.89 years this spring).
Among the Metro’s outstanding features is that it operates no less than 86 of its 90 trains in each peak period (equal to 95.5 per cent availability), providing three-minute headways on all routes through Newcastle-upon-Tyne.
Punctuality figures show that Metro out-performed its National Rail rivals, with 96.72 per cent of trains ‘on time’ so far this calendar year – measured as within three minutes of scheduled time at 17 monitoring points – and 95.57 per cent ‘on time’ in 2007/8.
The latter figure is slightly better than last year’s best on the national network – c2c’s 95.5 per cent within five minutes of right time – but there is some difference between a linear service such as London-Southend, running with a new fleet of Electrostars, and a network of services running with a fleet of 30-year-old trains.
Moreover, Metro’s annual season ticket prices actually fell in the past two years, even though two-thirds of Nexus’s costs were met through the fare box (approximately the proportion the Government wants to achieve through TOC re-franchising, which seems always to result in significant fare increases).
Maybe, Nexus Metro’s vertical organisation structure has been significant in achieving this level of performance, and in controlling costs. And now this is about to be tested.
So much interest is expected from rail industry companies in the Tyne & Wear concession that Nexus is laying on a presentation at Newcastle’s St James Park football ground on 9 September to give details of its Metro modernisation programme – which it puts at £350 million, unlike DfT’s “almost £300 million”.
Bernard Garner, Nexus’ director general, says: “This is one of the most significant rail projects outside London and offers big opportunities for the industry – most of all in winning the seven-to-nine year operations concessions.
“We are openly market-testing a unique business model in a way that hasn’t been since the very first round of rail franchises. This is a business which is currently still in the public sector.”
All of this will be watched with interest, if not concern, by Mersey-travel – Merseyside’s PTE – which controls Merseyrail (94.3 per cent ‘on time’ in 2007) under a 25-year concession let to Serco-NedRail.
When it took over, Merseytravel wanted control of the infrastructure around Liverpool and the Wirral, believing a £30 million saving could be achieved. But Network Rail would not agree.
Now Merseytravel is up in arms because plans to spend £20 million on safety improvements at Liverpool Central and James Street stations have been excluded by the Office of Rail Regulation in its draft determination of Network Rail’s budget for the next five years.
The decision to provide funding for the Liverpool schemes hinges on passenger number predictions, and Merseytravel insists ORR has underestimated growth on the rail network everywhere except London.
By comparison, Tyne & Wear Metro does not have to worry about the ORR.
No wonder Nexus expects more than 100 companies to be interested in bidding for its concession.