back in public ownership, or, as the RMT puts it, leaving the public sector to “pick up the pieces”. The Department for Transport (DfT) lays down very specific rules and requirements for franchise bidders, weighing up the interests of passengers with value-for-money for the taxpayer, who still subsidises most operators. A DfT spokesman categorically denies that franchises go to the highest bidder, explaining: “When bids come in they are assigned a code so that when we assess them, we don’t know whose bid we are assessing. Even the minister doesn’t know until the process is complete.” Business travellers have a vested interest in who runs franchises and how they are chosen, especially on main intercity routes as operated by Virgin. The government is now offering longer franchises to encourage train operators to invest, and two more major routes are up for grabs in the next 18 months, with several others to follow (see panel, p88). The Great Western franchise, currently run by First Group, will be awarded for 15 years from July 2013, while in December next year a new operator of East Coast will take over with a 12-year deal.
MASSIVE INVESTMENT Renewal of major franchises comes, despite the recession, at a time of massive investment in the rail network – claimed by David Cameron to be “the biggest modernisation of railways since
the Victorian era”. About £9 billion will be spent by 2019, mainly on further electrification, including the Great Western route from London to Bristol/Swansea (as well as a direct link to Heathrow); and the Midland route from London to Sheffield. The east-west Crossrail scheme under central London is under construction, while the new HS2 high-speed route from London to Birmingham will not open until 2026 and is not part of the £9 billion. The taxpayer will fund most of these schemes, as fares across the board will rise by Retail Prices Index (RPI)+3 per cent in 2013 and
This will be “the biggest modernisation of railways since the Victorian era”
2014, returning to RPI+1 per cent in 2015. The greater efficiency of electric trains, with 600 new carriages coming on-line from 2017, will also help. So what do business travellers and their managers want from the rail network of the future? Punctuality is not now a major problem, with quarterly surveys showing a high level of satisfaction, but value-for-money is a growing concern. Buyers also want to see the ticketing process streamlined, with better onboard services and better information when things go wrong. Capita Business Travel is one of the leading TMCs for rail, and is working on a manifesto for the rail industry to address the challenges that all operators have in common. Head of rail product, Raj Sachdave,
says now that the booking process works well, the debate has moved on to ticketing and adding value to fares. “It is good to see a requirement for smart card ticketing to be built into new franchise specifications, but the minimum required to fulfil these specifications is very low,” he says, adding: “With advance booking now well established, corporates are focusing on other elements of cost in the rail journey. They would like to claw things back, such as station car parking, use of wifi on board trains, and food and beverage purchases.” Capita Business Travel’s Interactive Campaign Manager – which includes benefits such as discounted food and beverage in some rail purchases – has proved a success. Sachdave urges train operators to be more innovative, as with East Coast’s Scottish Executive Package that includes parking, and Chiltern’s Business Zone on selected London-Birmingham trains. Tony Berry, HRG director of industry and fare distribution, adds: “Business travellers want fast, frequent and on-time services, better stations and better onboard services, and the £9 billion set aside for infrastructure improvements will help enormously. Improvements to ticketing are high on the list as we need to move away from paper tickets, and people are used to mobile technology when travelling by air. Booking confirmations should flow through to a smartphone, which can then be used to access ticket barriers.”
BIG CHALLENGES 86
Thetrainline.com is at the forefront of technological innovation, but sales and distribution director Adrian Watts says the rail industry faces a big challenge getting ready for smart technology. Smart cards or smart phones will not just help passengers, he says, but also help train operators predict and cope with patterns of demand. “Moves to new ticket fulfilment methods will be a major requirement of new franchises, and better yield management will follow,” he says. “We are also looking at delivering season tickets as this is part of the ‘smart’ process, and we already have a number of corporate accounts issuing season tickets on paper.” Supplier of reservations technology
to travel management companies (TMCs) Evolvi is less enthusiastic about ticketing developments and the time taken to introduce them.