ON THE RIGHT TRACK
As the clamour for more competition between operators grows, Dave Richardson takes a wide-ranging look at the changing landscape of the UK's rail industry
WHATEVER the make-up of the new government, there will be some pressing issues resting in the in-tray of the next rail minister. The outgoing coalition can take credit
for approving a whole raft of infrastructure projects quite apart from the new high- speed line HS2, including electrification of more routes and £5.7billion worth of new investment in the InterCity Express Programme (IEP) to provide new electric and bimodal trains for the East Coast and Great Western routes. But the outgoing government, like its
predecessors, has not moved to inject any significant element of competition among train operators. The franchising system as decreed by the Conservatives on privatisation over 20 years ago gives train operators an effective monopoly on their routes, although on a few routes two or more franchises might overlap. Rail looms large in the Guild of Travel Management Companies’ (GTMC) election manifesto, calling for more Open Access operators to increase competition and service, and a commitment to long- term infrastructure planning. Developments to improve business
travellers’ productivity is another demand, including free wifi connectivity and
42 THE BUSINESS TRAVEL MAGAZINE
adequate working environments on all UK trains, removing mobile 'not-spots' on all major routes, and connecting Heathrow to the existing HS1 high-speed route to the Channel Tunnel, and the new HS2 route to Birmingham and the North. But connecting Heathrow to the high- speed network was rejected before the election, and whether any government has the will to open up the rail network to genuine competition remains to be seen. Grand Central and First Hull Trains, both competing with the new Virgin Trains East Coast franchise, are the only open access operators at present. No new services have been approved by the Office of Rail Regulation (ORR) since Labour was in power in 2010. Now the issue is back on the agenda
with FirstGroup – one of the unsuccessful bidders for the East Coast franchise – proposing a new London-Edinburgh service in direct competition with low- cost airlines, serving Stevenage (in the catchment areas of Stansted and Luton airports), Newcastle and Morpeth (near Newcastle airport). This may not be of primary interest
to business travellers, but FirstGroup promises “one high-quality class of travel on brand new, state of the art rolling
stock”, with services to start in 2018 if the ORR gives it the go ahead. This could become a test case for the
new government. Network capacity is one issue, but if more open access is allowed then the Department for Transport (DfT) would be unable to extract such large premium payments from the incumbent franchise operator. We’re talking big money here – Virgin
Trains East Coast is committed to pay £3.3billion over the course of its franchise up to 2023. But Paul Wait, the GTMC’s chief
executive, rejects this as a reason for not allowing more open access. “We have a privatised rail industry, but not a deregulated one,” he says. “Premium payments may be less, but more people would be encouraged onto the railways and increased business means more in corporation tax. The question of network capacity comes up, but more trains could operate within safety limits.” Hillgate Travel's managing director, Anthony Rissbrook, chairman of the GTMC’s surface travel strategy group, says more competition would force down fares in first class as well as standard, and feels that only first class offers an acceptable working environment.
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