01.01.07
Interview With Ian Yeowart
Ian Yeowart, managing director, Grand Central Railway Company, talks to RTM in the run up to the launch of its new service in May
How do you justify to passengers your decision to postpone services by five months?
It’s been a difficult time, we know that. However, we’ve accessed our own rolling stock when it became clear that sub-leasing didn’t prove possible. Following that we made the right decision, and the professional decision, to launch in May. This decision does bring a lot of positives. For example, our train crews want to feel part of the launch, and this would not have been possible had we launched in December. We’ve also been really impressed by the flexibility shown by the rolling stock companies. We can’t speak highly enough of them.
If it’s the right decision to launch in May, are you implying you got the decision wrong initially?
No, not at all. It’s the right decision now because of the delays inherent in the leasing process and the delays caused by the challenge to the ORR’s decision to allow Grand Central to operate. Sub-leasing now makes no commercial sense, but when we planned to launch in December, there was no buying option open to us, but there is now and we’ve taken it.
I firmly believe we’ve taken the correct options throughout the process, especially given the complications. We’ve been held up by various parties throughout the process. We actually made our initial application in February 2005, expecting a December 2005 launch, not December 2006! But we didn’t get a decision for nearly a year, when it shouldn’t have taken that long, and during the time lag various types of rolling stock became unavailable.
Is this all a bit of a botch job? After all, you initially planned to run services from Newcastle to Manchester…
That’s a ridiculous view. How many companies bid for franchises and don’t win first time? I think you’ll find the number’s almost 100%. The facts show this is the most complicated area of the railways to get involved in. With hindsight it is clear we did make errors in our original application, but the second proposal shows that we’ve learned from our mistakes.
Personally I don’t see tenacity and persistence as flaws. If we all packed up after we failed first time we’d probably still be living in mud huts.
Buy surely this delay has taken the gloss off what has been an excellent year for you…
I’m not sure excellent is the right words - it’s been a very difficult year for us. The decision of the ORR came in January 2006, but couldn’t be ratified until August. People tried to sabotage the decision, and we didn’t expect the attack on our application to be so ill-timed, ill-considered and vitriolic. That created a delay which everybody is aware was not our fault. We’re railwaymen within this company and we just want to get on with running trains.
Do you think these delays, and the excuses you are providing, are an ominous sign of things to come?
Not at all. I don’t see any excuses. Everybody is aware of the delays that have been caused to us – that is factual and well documented. We’re not expecting more delays, and no one could deny the reasons behind the May start are genuine and reasonable.
What are you going to do to make the delay up to passengers when you eventually do launch train services?
We’re going to compensate them by giving them a train service they’ve waited 50 years for. We’re a purely commercial operation, unlike most franchises. We can’t fall back on handouts and special conditions from the Government. The only way we’re going to prosper is by listening to passengers and delivering for them. We’ve already listened to passengers regarding the simplification of tickets, and we’ll listen again in future.
People in areas of the north east, and ultimately places like Bradford, will have their own service. Passengers and stakeholders recognise that the delays, and the court process which preceded them, were entirely out of our control.
Surely the least your passengers deserve is brand new trains?
Rolling stock always comes second hand. Every franchise which took over from British Rail got second hand rolling stock. The rolling stock will be re-engineered and refurbished, and will be at least the equal of anything operating on the ECML. You also seem to be of the view that a pure commercial service operates under the same type of protections that a franchised service does – Grand Central will prosper by delighting its passengers, and no other way!
How can you prove your trains will be “as good as anything currently running on the East Coast Mainline?”
The HSTs are proven and their reliability has improved markedly. Even so, the trains will be rebuilt and retested to ensure maximum quality. We’re a small company, so from a passenger point of view, delivery is absolutely paramount for us. We can’t go cap in hand and renegotiate our terms. The ultimate test is the passengers’ feedback, but with more legroom, comfortable seats and a fair pricing policy, I think we’re justified in our comments!
You intend to stand entirely on your own two feet, free of Government handouts. Surely this will result in higher fares for passengers?
Our tickets will be around 40% cheaper than the average, and in some cases they will be as much as two thirds cheaper. Our maximum single fare from York to London is £34 – that’s a massive difference compared to the £85 usual price. It’s very hard for us to provide anything better than that. We’ve said we’ll be transparent, and the fares advertised are what people will pay.
If we’re going to attract passengers, we can’t afford to price them out. Other operators will no doubt compete with us. That’s the way the commercial world operates, and is what market competition is all about.
We’ve also ensured we have the ability to “strengthen” trains in the future with additional carriages should the need arise.
Won’t you also be offering refunds to those forced to stand on your trains?
Although we can’t guarantee we’ll always have enough seats, we recognise that if we haven’t got enough, we haven’t delivered. In that situation, Grand Central ticket holders will only be required to pay 50% of the advertised fare for the journey. We regard adequate seating as particularly important.
So how are you going to make money?
The ORR has conducted a detailed evaluation of our business plan, and Arup has also scrutinised it. The ORR has decided that, on balance, we’re offering the best use of facilities on our networks. We’ve learned a lot from being unsuccessful first time, and addressing the areas where the ORR thought we were weak initially. Our returns are over a period of time, and we’re investing our money in the belief we’ll get a return.
But where are you going to make money?
We’re working on the margins as an open access operator. We can’t appear at King’s Cross at peak time, for example. So we go for volume and quality. Hull Trains’ market is approximately a third the size of ours, and they’ve been successful and well done to them.
We have good arrangements in place and the operational cost of our rolling stock will, overall, be comparable with anything else on the network.
A number of rival train operating firms have struggled to maintain punctuality on their lines. How will you ensure punctuality?
As long as our trains are in good operational condition, and part of our maintenance programme will ensure that happens, punctuality should take care of itself. The aspects of punctuality that are in our control, we’ll manage. Punctuality is in everyone’s interest.
You’ve identified safety, passenger satisfaction, value for money and accessibility of travel as being the key elements of your service. These are prerequisites for any rail operator. What are you going to do to distinguish yourselves and stand out from the crowd?
We’re small and focused, so that helps. Go on Hull Trains to see the differences a small operator can make. Attention to detail and ownership from the workforce are two crucial advantages. We believe the people who deliver our service day in, day out are the ones who should make the key decisions regarding passengers and make their own decisions at source. We’re appointing exceptional people at present.
If you’re a franchise, you’re operating what someone else has specified. Because we’re open access, we’re operating what we’ve specified. But we’ve only got six trains a day and it’s vital we get them right.
Have you invested in any particularly exciting technology for your trains?
HSTs are not full of microchips, but we will be spend over £6m upgrading our power cars and trailer cars. The power car has to be reliable and the trailer car has to be comfortable. Although we won’t carry wi-fi to start with, we’ll guarantee power for people’s computers and comfortable seating with lots of leg room.
Do you plan to extend your route in the future? At the moment it seems to constitute only eight stops.
We’ve got a known ambition to run an extra train to Sunderland and we have an outstanding application to run regular services to Bradford which is awaiting the outcome of the East Coast Route utilisation strategy (RUS). The Bradford Service Group is on standby awaiting the RUS. There is also an aspiration to run services into west Yorkshire from the West Coast Main Line, but that will require new rolling stock so it’s probably about three to four years away.
Will you be upgrading any stations along your route? The north east of England has hardly been a hive of station refurbishment in recent years!
We’re looking at doing something at Eaglescliff, which is managed by Northern, a company with whom we enjoy an excellent relationship. We’re looking to expand the car park and improve the staffing of the station to provide new ticket facilities and a waiting area.
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