Fares rethink signalled in government’s McNulty response
by Katie Silvester
The practice of raising rail fares above the rate of inflation is to end soon, says transport secretary Justine Greening in a new command paper – Reforming Our Railways: Putting the Customer First. ‘We recognise passengers’ serious concern
about rail fares and the impact of higher than expected inflation on family budgets,’ the report says. It commits to first reducing, and then ending above inflation on regulated fares. New types of fares will attempt to spread
demand during the morning and evening peaks, by differentiating between the busiest and least busy parts of the peak, which could see fares for some services rise (see comment opposite). A separate review of fares and ticketing will be undertaken by the DfT. The government’s long-awaited command
paper sets out its response to the McNulty report, which identified inefficiencies in Britain’s railways and recommends that 30 per cent is shaved off the cost of running the railways by 2018-19. Launching the report, Greening said:
‘Inefficiency and waste in the railways is costing hard-pressed farepayers and taxpayers £3.5bn- a-year and I will no longer allow them to be lumbered with this unnecessary burden.
‘We are setting out a roadmap for action
alongside the industry to root out inefficiency, so we can deliver real value-for-money that ends inflation-busting fare rises once and for all.’ Franchises will be let for longer, says the
report, to encourage greater levels of investment. The process of creating closer alliances between Network Rail and train operators will continue. The report says: ‘Government welcomes the direction of the study’s recommendation and considers greater alignment of incentives for efficiency between Network Rail and train operators to be the most pressing reform necessary to drive down costs for rail industry. ‘Government is committed to exploring the full menu of options for promoting greater alignment, including options to place responsibility for train operations and infrastructure management in an area in the same hands.’
The command paper recognises rail freight’s
‘strategic importance’ to the economy and the environment, pledging to continue its mode shift revenue support scheme, which offers subsidies to enable rail operators to compete with road where they would not be able to compete in a completely commercial setting. However, there is no definite commitment to the expansion of the strategic freight network
– the government will merely ‘consider’ more investment. Freight operators are already concerned
about the impact that the new alliances between Network Rail and passenger operators could have on them. With Network Rail alone controlling the tracks, it was seen as an impartial third party. But with passenger operators having more input into signalling and timetabling, freight operators worry that they will be disadvantaged. Chris MacRae, the Freight Transport Association’s rail freight policy manager, said: ‘Whilst reducing the costs of the railways is good for all of us, we must prevent freight ever becoming a second class customer if we are to maintain the growth in the logistics industry’s use of rail.’ The report will also bring disappointment for open access operators and potential new entrants, as it states that opportunities will not be expanding beyond the routes that are already used by open-access operators. The paper says that the government does not
support ‘an increase in open access competition’. It adds, by way of explanation: ‘Where franchise bidders perceive a risk of open access competition undercutting them on costs they are likely to offer much lower bids.’
FirstGroup shortlisted for three franchises
The shortlist of bidders for the next round of franchising has been announced. The four bidders to have pre-qualified for the First Great Western franchise are FirstGroup, Arriva, National Express and Stagecoach. The Invitation to Tender will be
issued in May, with the winner announced in December and the new franchise contract beginning in April 2013. The companies that will be
invited to tender for the Essex Thameside franchise, currently C2C, are Abellio, FirstGroup, MTR and National Express. The new franchise will begin
in May 2013, with the winners announced in January of that year. The Invitation to Tender will be issued in June 2012. Five companies have been shortlisted for Thameslink: Abellio, FirstGroup, Govia, MTR and
Stagecoach. The winner will be announced in May 2013, with the new franchise starting from September 2013. The Invitation to Tender for Essex Thameside will go out in October 2012. The Great Western and Essex
Thameside contracts will run for 15 years, while Thameslink will be for a minimum of seven years, with the possibility of a two-year extension. Rail minister Theresa Villiers
said: ‘Our reformed approach to franchising will give more flexibility to train operators on how they configure services and run their business, within a framework set by the franchise agreement, which will protect key outcomes for the passenger, the taxpayer and the economy. ‘We welcome the strong interest
shown in these three competitions by the rail industry. A vibrant and competitive market for franchises is an important part of our strategy.’
APRIL 2012 PAGE 5
First Great Western HSTs line up at Paddington
www.shutterstock.com/Chris Jenner
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