At least two weekday trains in each direction will achieve the long-sought ‘Norwich in 90’, presumably following the unspecified infrastructure improvements. Public Performance Measure (PPM) scores are targeted to rise from 89.7% to 92.9% “through a more robust timetable, investment in infrastructure, people and process, and through an alliance with Network Rail”.
And there is the usual station improvement programme (costed at £9.8m), free WiFi on trains and at stations, ticket offers for part-time workers, and automatic ‘delay repay’ for season and advance purchase tickets.
PUTTING PASSENGERS FIRST
“Passenger needs are quite prosaic,” says Transport Focus Chief Executive Anthony Smith. “They want the basics: punctuality is the key driver, then frequency, reliability, getting a seat, better information on delays, value for money.”
The Brown Report thought the National Rail Passenger Survey (NRPS) scores calculated by Transport Focus “should be more closely reflected in franchise commitments and subsequent monitoring of franchise performance”.
The difficulty is that it is much easier to specify inputs than to devise satisfactory ways of measuring and incentivising outputs. Perceptions of train lavatory cleanliness - a constant low score in NPS results - are inevitably subjective. How do you assess how well a train operator copes with a delay? Passenger response may depend on the manner in which train staff make announcements and how well the situation is explained, as well as how accurate the information is or how helpful staff are in providing advice on missed connections.
Brown proposed that: “To ensure franchisees are incentivised to maintain and improve NPS scores, I recommend that attainment of contracted passenger satisfaction levels be a criteria in franchise extension and extending the mechanism included in the Southern franchise to other franchises, which requires the franchisee to invest in agreed ‘passenger dividends’ if it fails to achieve agreed NPS scores.”
Service quality is the key to growth. A driving force behind the ScotRail franchise was Transport Scotland’s Commercial Director, Bill Reeve. He thinks that franchising is problematic - an expensive process with strengths and weaknesses. But he does credit franchising with a “sharpening of pencils”, adding: “If the revenue stream for the bidder is worth having, then the competitive process will force them to think about how to drive up revenue and drive down cost. Given that much of the costs are fixed by track access charges and determined by the Regulator, and rolling stock costs are to a degree determined by the market with little to differentiate between rolling stock bids, much of that focus must be on driving up revenue and improving customer service. That forces people to stop and think about service patterns and attributes.
“The second benefit is that every 5/7/10 years it makes the Government client think about what they want from the railway network. If that process didn’t happen, many rail projects might not be high enough up the priority list to attract investment.
“Franchising draws public attention to new possibilities and levers improvements. Of course it would be better to have a steady rolling programme of train investment and infrastructure enhancements, but would you get them without the franchising process? It acts as a trigger.”
HOW LONG?
Debate over the merits of different franchise lengths has been unending since 1995. At those early privatisation conferences Jim Sherwood, the founder of Orient Express, suggested 50 years… the Treasury thought three. The EU limit is 22½ years (15 years plus a 50% extension under defined criteria), so Brexit will make no difference to the current preferred length of 7-10 years.
The longest franchise has been the 20 years for Chiltern Railways, awarded in February 2002. It was won under Adrian Shooter, who acknowledges: “It is difficult enough to forecast seven years ahead, let alone 20. The bidders will worry that they will lose their shirts, while the Government will be thinking that they may get ripped off with operators making super profits.
“There have, of course, been various attempts to moderate this, by (for example) putting in ‘cap and collar’ schemes limiting the operator’s upside in return for helping out if such external factors as the economy are more adverse than expected. Chiltern has a rather different arrangement which has allowed some negotiation each time a very major investment has been made - one of the Evergreen schemes, for example.
“For all that, I think that the real (but not often stated) reason why franchises have not been longer is that the banks and other financial backers and guarantors of bidders are not interested in improving the railway. They are mistrustful of the Government, with good reason in some cases. Equally, civil servants are mistrustful of these same people. Both are right not to trust the motives of the other, but this has to change.”
There are unlikely to be any further franchises as long as Chiltern’s, yet despite its relatively small size it has proved the value of taking a long view on investment decisions.
The Evergreen projects have been the most ambitious infrastructure projects of any franchise. Shooter says he was fortunate in that “our major shareholder John Laing plc was much more comfortable with infrastructure investment than, for example, bus companies who don’t understand it. It will be interesting to see how the Welsh Government gets on with its plans to get bidders to put forward solutions involving infrastructure. Bidders are teaming up with various contractors.”
