Posted 17th September 2018 | 6 Comments

Major railway review ‘could be announced this week’

Transport secretary Chris Grayling

Transport secretary Chris Grayling is set to announce a major review

TRANSPORT secretary Chris Grayling is set to announce a major review of railway organisation, including the structure of franchises, later this week.

But although the review, which is said to have the support of the Prime Minister, is supposed to be the most fundamental reappraisal of how the railway is organised since privatisation more than 20 years ago, some sources are voicing doubts about how fundamental it can be without opening the door to a form of renationalisation.

The Department for Transport has been under great pressure over its management of railways during the past few years.

Its position has been jeopardised by several problems, including serious disruption on a number of key routes caused by industrial action over changes to the traditional role of the guard. Southern was the first to feel the impact of the disputes in 2016, but strikes are continuing this month on Northern and South Western Railway, although new peace talks are set to begin on Wednesday between Northern and the RMT.

Mr Grayling’s position has been weakened still further by the collapse of the Virgin Trains East Coast franchise, which ended in June, costing the majority shareholder Stagecoach Group some £200 million. A report published by the Commons Transport Committee last week placed some of the blame for this on the Department for Transport.

The DfT has also been under fire after the radically new timetables introduced on 20 May on Govia Thameslink Railway and Northern proved to be unworkable. The effect was so severe that most of December’s timetable changes are being put on hold. These range from the promised 24tph Thameslink service through central London to the introduction of a half-hourly service on the Cornish main line between Plymouth and Penzance, for which signalling upgrades have been completed.

The franchising timetable remains in disarray, with award and starting dates continuing to slip. The start of the West Coast Partnership, originally intended to begin as the successor to the present Virgin Trains/Stagecoach contract in April this year, has been postponed by up to 12 months, while although the winner of the next South Eastern franchise should have been announced in August the decision has been delayed until November. The present Southeastern franchise, meanwhile, has been extended again to April 2019. The story has taken a further twist in the past 24 hours, with unconfirmed reports that the three shortlisted contenders, Abellio, Stagecoach and incumbent Govia, have been asked to submit their bids for Southeastern again.

Other misfortunes include fresh problems with Intercity Expresses, which were procured from Hitachi by the Department for Transport for the East Coast and Great Western main lines. It emerged a few days ago that the trains emit disruptive frequencies in electric mode, which are affecting signals and other safety-critical equipment on the East Coast route, where they have yet to enter passenger service. Both Hitachi and Network Rail are said to be working on a solution, although Hitachi has claimed the cause is old lineside equipment, while Network Rail said the problems would be cured by making changes to the trains themselves.

More recently still, a GWR Class 802 running in diesel mode failed just north of Exeter on Thursday, stranding 400 passengers for five hours and disrupting other services.

There has been no shortage of critics. After the news of electrical problems on the new East Coast ‘Azuma’ sets broke last week, Labour’s transport spokesman Andy McDonald said: ‘The procurement of the new East Coast trains has been, yet another, incompetently managed Department for Transport project which has cost taxpayers hundreds of millions of pounds. Once again, the secretary of state has failed to ensure that the different parts of the rail industry work together to deliver new infrastructure and services. This chaos cannot and must not continue. Only Labour’s model of public ownership can deliver the structure rail needs to flourish.’

Reader Comments:

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

  • david c smith, Bletchley

    Whoever in the end (hopefully) makes the decisions abut any restructuring, I hope they keep in mind
    (a) a need to liberate the TOC's from DfT micromanagement in order to be able to innovate, invest and be enterprising.
    (b) a need for effective accountability not via central government.
    (c) taking into account that passenger operations are diverse, with different categorities needing different structures, in particular effective competition for some , and local democracy for others.
    (d) looking at experience abroad, especially with respect to organisation of infrastructure ( Sweden in particular, with its "horizontal integration").

  • Tiff Lynch, Bexleyheath

    And there we were, thinking that the Brown report had sorted the franchise issue - or did we? Franchising is broken; there's huge uncertainty around both future performance of the economy/passenger growth and, often, whether Network Rail has delivered the required kit.
    DfT have got franchise specs so tied up (micro-management style) that they only allow for enterprising enhancements at the margin. Meanwhile, there's still the complication of those open access operators muddying the franchising waters with their niche add-ons causing unhelpful skewing in train path allocation, as well as impacting on franchise TOC revenues.
    A 'sensible' way forward would be to accept that franchises are just management contracts by another name. Keep them that way, but invite bidders to add the cost of investment in new infrastructure required (which retains a kind of PFI option for enhancement projects). And, if necessary, go for minimum ten year contracts if that unlocks the required infrastructure investment.
    That would de-risk franchise bidding on both sides, reducing costs. And provide a funding stream for all those small/medium enhancements (some with very good BCRs) that we all know are needed.
    Also, allow a public sector operation option, if only as operator of last resort.
    Add a cherry on top and there it is. :)

  • Martin, Haywards Heath

    I think the reason why passenger numbers are plateauing is very simple: pricing people of the railway rather than pricing them on is working. so that demand is managed/reduced.. The other is all he timetabling issues with northern and GTR is putting people off. I am sure the DDo strikes don't help either. The only common theme here is the train operating companies so isn't clear who to blame? Or have I missed something?


  • John B, London

    Time to move those deckchairs again (having learnt nothing from McNulty & Brown). Never mind that passenger numbers are falling like a stone (more than 2% in the SE) and that TOCs are willfully breaching franchise terms (NR, Southern & Govia) without so much as a slap on the wrist from the govt. On the contrary, hopeless Grayling is propping up failing franchises for fear that there's possibly worse to come.

    Funny times when a Labour govt is the best way forward to the current mess.

  • Tony Pearce, Reading

    Is the real 'Elephant in the Room' the fact that passenger numbers now seem to have plateaued with very little room for Train Operators to increase numbers and profits ? If they can't see a way to make money they won't bid.
    [Too much Daily Wail, Tony. Passenger numbers are down (particularly season ticket holders) on those franchises which have suffered from disruption. Numbers are up elsewhere. But the total effect is to flatten out the national rise because L&SE is so influential.--Ed.]

  • Andrew Gwilt , Basildon Essex

    Or what about Trenitalia. They could take over the Southeastern franchise because they once bidded to take over if Govia loses the franchise and Trenitalia to manage the Southeastern franchise that serves Southeast London, all of Kent and some parts of East Sussex. And operates the Southeastern Highspeed domestic services in & out of St. Pancras International to Canterbury, Ashford International, Ebbsfleet International, Gravesend, Rochester, Dover, Folkestone and Margate.
    [Nothing about Trenitalia. They are not shortlisted. The only way they could become involved (assuming they have any wish to do so) would be by scrapping the present SE competition and starting again. We are not at that stage yet.--Ed.]