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Fears for Effects on Freight After Dft's Franchising Fiasco

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Fears for Effects on Freight After Dft's Franchising Fiasco Rail Freight Group News October 2012 news 96 www.rfg.org.uk October 2012 INSIDE: Fears for effects on freight P.01 - 04 RAIL FREIGHT after DfT’s franchising fiasco NEWS New questions raised over reform after WCML mistakes P.05 competition is run for an interim RFG OPINION franchise agreement. This interim agreement, which will be open to any bidders, will then run until the P.06 - 08 new long-term West Coast fran- RFG EVENTS chise is ready to commence. The Transport Secretary has also ordered two independent P.09 reviews to be undertaken urgently: GUEST ARTICLES the first into what went wrong with the West Coast competition and the lessons to be learned; the second P.10 into the wider DfT rail franchise pro- POLICY UPDATE gramme. On 3 October, Transport Secre- Thameside and Thameslink fran- The first independent review is tary Patrick McLoughlin MP, chises has also been sus- an urgent examination into the P.11 & 12 threw passenger franchising into pended. The flaws uncovered re- lessons to be learned from the WESTMINSTER a state of disarray when he an- late to the way that the procure- Department’s handling of this COLUMN nounced that the competition to ment was conducted by the competition. Conducted by inde- run trains on the West Coast Department of Transport (DfT), pendent advisers and overseen Main Line (WCML) had been and relates particularly to the by Centrica chief executive Sam P.13 cancelled. The decision, which way that the risk, and financial Laidlaw and former Pricewater- SPONSORS came following the discovery of protection required in the bids houseCoopers strategy chair- significant technical flaws in the was calculated. Three officials man Ed Smith, both DfT non- PAGE way the franchise process was have been suspended while an executive directors. This review conducted, means that the hand- investigation takes place. The will look as soon as possible at P.14 over to First Group, expected on DfT has subsequently an- what happened and what went EUROPEAN 9 December, will no longer take nounced its intention to negoti- wrong, with a view to delivering place. Furthermore, bidding on ate a short-term contract exten- an initial report by the end of UPDATE the Great Western, Essex sion with Virgin Trains, while a October. Continued on page 2. ment of the open access approach implemented by Eurotunnel. I am Prima II loco tests through Tunnel very pleased that our close cooperation with Alstom is opening up new avenues for freight whilst at the same time significantly reducing Eurotunnel has successfully completed initial tests with the Alstom CO2 emission”. Prima II locomotive through the Channel Tunnel. The tests on 29 - 30 Henri Poupart-Lafarge, Chairman of Alstom Transport, added: “We September focused on checking the compatibility with the Tunnel’s are very pleased with the results of these tests which open up new systems and compliance with safety standards. The Prima II, set to a and promising perspectives for European rail freight and are proof of standard configuration and hauling wagons with a total weight of 950 Alstom's active support for the sector.” • tonnes, entered the Tunnel via the French portal at 22:20 before con- ducting a series of traction, brake and pantograph tests. Exiting the Tunnel at Folkestone, at 03:00, the train then departed for a second series of tests on the return journey to France, ending at 06:00. Eurotunnel said it hoped to further develop stan- dard rail freight services that do not necessarily need to use the Class 92 locomotives. The Prima II can operate on all the European freight corridors and is compatible with both ERTMS and ETCS systems, using four different power supplies. Jacques Gounon, Chairman and CEO of Groupe Eurotunnel, said: “Gaining authorisation for new rolling stock is an essential part in the develop- 1 Rail Freight Group News October 2012 Chairman’s Comment: Tony Berkeley email your comments to: [email protected] This is RDG’s moment – can they grab graphic charges and scarcity charges, both critically important to freight. it? The current crisis in franchising offers a big opportunity for RDG - but also a big challenge. There will be a need for clear reasoned argu- The Rail Delivery Group (RDG) was founded on the ments on the role of the private sector in providing passenger ser- back of the McNulty study and has been up and running vices, the different models which might be investigated and of course for around a year now. The Group, chaired by First the detailed construction of future franchises or whatever they may Group Chief Executive Tim O’ Toole, has representa- be. The constituent members of RDG represent the current franchise tives from all the major rail owning groups, including for freight DB operators, including Government owned Directly Operated Railways, Schenker and Freightliner. Its aim is to provide a guiding mind for the but also represent open access passenger operators and freight. development of the UK rail industry, but in particular to lead and co- Who better to understand the situation, and the options for reform. ordinate cross industry workstreams to drive efficiency and reduce RDG’s input into the Brown review, to the political debate and to Gov- costs. ernment will be vital. There is no doubt that in the last year, RDG and its numerous sub Yet its strengths, if misplayed, could also be its weakness. Consen- groups have been busy addressing some of the key issues. The sus may well be hard to reach, and the on-going hiatus will be a ma- minutes of its meetings, available on the website at http:// jor distraction for those who actually run businesses reliant on fran- raildeliverygroup.org/Home.aspx give some indication of the work chises. The notes of the first meeting since the start of this debacle underway. Recently, ORR have concluded on proposals which put give some clues to the difficulties faced, noting that ‘RDG should RDG onto a formal basis, with a fixed constitution and permanent identify where there was common ground between the owning staff. groups’. How easy will this be in practice? Yet RDG has thus far been light on outputs, and for those not inti- This is a critical test for RDG, and its credibility in the industry. Can it mately involved in the work, it can be difficult to see the extent of its rise to the challenge? influence. Communication outside of the parties involved has been limited, and there are no reports, or progress updates available for RFG News is happy to publish comments, opinions and letters. general consumption. This is a shame, because RDG has been in- Please email comments to [email protected]. creasingly influential ; - for example its input on the future of access charges appears to be helpfully shaping emerging thinking on geo- continued from page1. my department in the way it quality assurance. its approach, particularly on risk managed the process. “I am determined to identify and evaluation, and simplify the The second independent re- “A detailed examination by my exactly what went wrong and process while delivering better view will be undertaken by Eu- officials into what happened why, and to put these things value for money and improved rostar chairman Richard has revealed these flaws and right so that we never find our- services. Franchising private Brown CBE, and examine the means it is no longer possible selves in this position again.” companies to run train services wider rail franchising pro- to award a new franchise on Rutman has subsequently writ- has delivered for passengers, gramme. It will look in detail at the basis of the competition ten to Justine Greening to taxpayers and the country, with whether changes are needed that was held. apologise over the errors rail travel more popular now than to the way risk is assessed “I have ordered two independ- which were made whilst she at any time since the 1920s and and to the bidding and evalua- ent reviews to look urgently was Secretary of State. He re- near record levels of satisfaction tion processes, and at how to and thoroughly into the matter mains in post. and punctuality. With the right get the other franchise compe- so that we know what exactly There has been widespread framework in place for franchis- titions back on track as soon happened and how we can comment on the situation po- ing, train companies will continue as possible. This will report make sure our rail franchise litically and across the indus- to deliver these results.” back by the end of December. programme is fit for purpose.” try. ATOC said that “It is in eve- At this stage, it is unclear what McLoughlin said: “I have had DfT permanent secretary ryone’s interests that the Depart- any implications for rail freight to cancel the competition for Philip Rutnam said: “The er- ment for Transport (DfT) solves are. the running of the West Coast rors exposed by our investiga- the significant flaws in its overall franchise because of deeply tion are deeply concerning. franchising process as a matter of For RFG comment, please see page regrettable and completely un- They show a lack of good urgency. There is an opportunity 5 and also the Westminster Column acceptable mistakes made by process and a lack of proper here for the DfT to look again at on pages 11 and 12. Network Rail to re-use £25m Peugeot car plant at Ryton for its National Delivery Service Network Rail has announced plans to open a new 300,000sq ft national distribution centre on the site of the former Peugeot plant at Ryton in the West Midlands.
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