Posted 18th October 2010 | 3 Comments

Stagecoach urges radical reforms to rail franchising

Stagecoach operates the East Midlands Trains and South West Trains franchises, and also has a 49 per cent interest in Virgin West Coast

Stagecoach operates the East Midlands Trains and South West Trains franchises, and also has a 49 per cent interest in Virgin West Coast

STAGECOACH Group founder Brian Souter has entered the fray in the debate over future rail franchises, by urging much greater reforms. His call comes as the government is poised to publish the McNulty ‘value for money’ rail report. Mr Souter, who started his transport career as a bus conductor and now heads a major group, said ‘tinkering around the edges’ would not be enough.

The Stagecoach proposals include trials of ‘vertical integration’, in which the operator is also responsible for track maintenance and train regulation, removing an ‘artificial split’ between track and train that is ‘inefficient and not in the best interests of passengers’.

Vertical integration was normal in Britain until privatisation in the 1990s, which included the creation of Railtrack (now Network Rail) to take over network operation and maintenance.

Stagecoach said it had developed a ‘low cost’ model for future franchises, having already removed 25 per cent of ‘controllable’ costs from its own franchises since 2008.

Mr Souter explained: “We are at a crucial crossroads for the rail network. We have a once in a generation opportunity to deliver real change that will benefit both passengers and taxpayers.

“But we must not take the easy option of tinkering around the edges – we need radical reform. Our proposals ensure that customer, safety and shareholder interests are brought together as the focus of a new model. These interests have never been properly aligned in the past.

“We believe this is the only way to deliver a safer, more efficient and more reliable railway in the long-term. Stagecoach has successfully delivered change before and we could do it again. Our plans would unlock the investment and innovation of commercial operators, provide value for money, and deliver better services to the millions of people who rely on our railways every day.”

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • KEV SMITH, northampton, uk

    It worked when BR was sectorised and worked before nationalisation - then privatisation cocked it up - it did work, but does anyone remember the Railway Clearing House? That's what they were created for!

  • Prestwick, Harlow, UK

    The problem is how exactly does an operator like Cross Country fit into multiple zones such as Virgin West Coast, First Great Western and SW Trains or Grand Central fit into East Coast and Hull Trains?

    I don't think Souter has thought this through, all he's done is looked at the report and thought "wow! This would be great for East Midlands and South West Trains!" without thinking about the impact on anybody else.

    Best place to experiment is to try and talk the Scottish Executive into putting Scotrail and SPT into one vertical silo, removing all Network Rail control and seeing what happens...but then we got into enough trouble causing fury in Scotland because of endless meddling in the 1980s.

  • David, Reading

    It is more important for franchises to include investment such as rail re-openings. Any WCML franchise bid should include trains restored to Keswick and wires to Blackpool.

    All of the ATOC 20+ re-openings should be included within franchise renewals. The new lines could be the frontier of the return to vertical integration by creating a market for it locally, then expanding the idea.