Fares, rail policy and DfT news

06.12.16

Grayling to reveal plans for fully privatised railway line

Under proposals drawn up by transport secretary Chris Grayling, the new route between Oxford and Cambridge will not be developed by Network Rail but instead by a new East West Rail organisation, who will also operate train services on the line.

In his keynote address at Conservative think tank Policy Exchange this evening, Grayling is expected to outline the plans for the fully privatised line, which are said to “put the passenger at the heart of delivery” by delivering Britain’s first integrated rail operation since the 1990s.

“It would be no exaggeration to say that the railways of this country are crucial to its economic future … Without them our economy would grind to a halt,” the secretary of state is expected to say in his speech.

“Our railways need to adapt and change in order to be able to cope with the growth that they have already experienced and that which lies ahead. We need a railway which is sustainable in all senses of the word.

“And that means a series of changes to deliver the best possible passenger experience for the future …. it means a change to the way the industry works in order to make sure it can meet the needs of passengers.”

Funding to revive the Oxford to Cambridge line, which was axed following cuts in the 1960s, was announced in chancellor Phillip Hammond’s Autumn Statement last month as the route is a key part of the government’s growth strategy for the corridor.

In the meantime, Grayling will also seek for Network Rail and TOCs to work closer together in the passenger interest, proposing that ‘vertical integration’ – giving operators responsibility for maintaining their section of the track – is built into the upcoming South Eastern and East Midlands franchises.

He wants each rail franchise to be run by joint management teams, including representatives from both the TOC and Network Rail.

“I believe it will mean they run better on a day-to-day basis … Our railway is much better run by one joined-up team of people. They don’t have to work for the same company. They do have to work in the same team,” Grayling will say.

Privatisation of Britain’s railway infrastructure has not been seen in Britain since the privately-owned Railtrack, which managed the tracks from 1994 to 2002.

However, with Railtrack’s reign associated with fatal train crashes, unions have said that they will fiercely oppose the proposed changes. The RMT union has pledged to picket Grayling’s speech, which will take place during their current round of strikes over Southern’s plans to introduce driver-only operated (DOO) trains.

“The idea that what Britain’s railways need is more privatisation is ludicrous,” RMT’s general secretary Mick Cash said. “The introduction of the profit motive into infrastructure raises again the spectre of Hatfield and Potters Bar, and the other grotesque failures that led to the creation of Network Rail.”

The general secretary of the train drivers’ union Aslef, Mick Whelan, agreed in worrying about returning profit to Britain’s railway infrastructure, calling the time of Railtrack “one of the darkest times in the history of Britain’s railways”.

“What [Grayling] is proposing is a desperate, half-baked reform that will only add another layer of unnecessary complexity to the rail industry,” he added.

The news follows the trend of several recent attempts to privatise Network Rail’s portfolio, such as a desire to sell off parts of its major stations, potentially decentralise specific routes, and sell electrical power assets – although this plan was scrapped in September.

Network Rail ‘strongly welcomes’ integration plans

Mark Carne, chief executive of Network Rail, strongly welcomed the government’s integration plans, noting that the proposals will build on the alliances already created after Network Rail devolved route services into local route-based businesses.

“We strongly welcome these plans to bring up more joined up working within the industry. We have already devolved Network Rail into route-based businesses closer to customers, and the proposals announced today will build on the alliances we have created between these route businesses and train operators,” Carne said.

He added that the infrastructure owner already believes that it should have better incentives to work with operators, hence why Network Rail’s performance incentives are now aligned around jointly-agreed targets with TOCs.

“Network Rail’s published transformation plan is moving us to being a public sector body that acts like a private business, with a clear focus on what customers want,” Carne noted.

With regards to the announcement of East West Rail, he said: “Competition must be at the heart of any organisation that wants to behave like a private sector business. Competition breeds efficiency and innovation and will further encourage our own teams to push aside the barriers holding them back.

“That is also why I announced last month that Professor Peter Hansford will chair an independent review into the barriers to competition in all elements of delivering rail engineering projects.”

Paul Plummer, chief executive of the Rail Delivery Group, added that everyone in the railway wants to transform services for customers, including better reliability.

“The secretary of state is setting out a positive vision that we can all support, and one that together we want to make work,” he argued. “We need to ensure that every part of our railway is more joined-up and working closer together – one railway pulling in the same direction.

“Effectively-managed teams focussed on the same objectives will resolve problems and make progress more quickly.”

(c. PA Images)

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Comments

Terryk   06/12/2016 at 12:58

Can you imagine if Virgin got a maintenance contract how much they would try to cut costs to the bone. Ask current workers of Virgin how well they are treated and their conditions of work. Bad idea, must have continuity all over the railway to maintain standards and share experiences of faults etc. Private Companies do not speak to each other due to commercial pressures.

Hugh Harvie   06/12/2016 at 13:12

What's next? letting combined maintenance and renewal contracts to utilise labour and reduce costs. Sounds like going back to the way it was and should have been after privatisation.

Andrew G   06/12/2016 at 20:41

Do you think that Chris Grayling is actually doing the right thing to privatise our railway lines in the UK? I gotta bad feeling about this but if it works then it will benefit the ways to improve our railways in the UK.

Huguenot   06/12/2016 at 20:41

I agree, this is really risky. It might work on a self-contained line, which EWR will mostly be, but only if given to a responsible organisation like Chiltern Railways (hint, hint) and for a reasonably long franchise such that it would be prepared to make the necessary investment.

Pedr   07/12/2016 at 00:20

There are some small railways in the UK which either avoided nationalisation or have been bought from British Rail and its successors. They seem to run satisfactorily, managing both stock and track. One has been running since 1836 and claims to be the oldest railway company in the world.

Lee   07/12/2016 at 09:48

Grayling wants NR and the TOC's to vertically integrate 'to deliver the best possible passenger experience for the future'. It will be interesting to see how freight TOC's and their customers will benefit from these proposals.

Lutz   08/12/2016 at 12:30

This is not privatisation, but it is a step in the right direction. So far, the main changes just give the operator(s) a say in the maintenance regime. However, I do agree that NR will need to be broken-up and moved back into the private sector; it has no valid reason for being a public sector organisation.

Graham   09/12/2016 at 13:20

British Rail was a truly integrated system that was far more able to cope with any problem that arose. All that has happened since the railways became silly little private companies. The only people who have benefited from this mess are the lawyers and accountants who have made millions out of the taxpayer.

Jak Jaye   10/12/2016 at 09:49

Spot on Graham! BR was far from perfect but was 100% better then the bunch of Cowboys that are paid millions by us the tax payers to line their pockets and as for the lawyers wasn't it old Will Shakespeare who wrote'The first thing we do is kill all the lawyers'?

Keith   20/12/2016 at 16:58

Sounds wonderful & a brave new vision, like high speed 1 - oh hang on that was a private company that built & operated the line, then became part of Network Rail in order to provide the correct level of maintenance & route management & to allow other operators access Here we go again !!

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