Derek Bibb Consultation Questions The answer boxes will expand as you type. Procuring rail passenger services 1. What are the merits of offering the ScotRail franchise as a dual focus franchise and what services should be covered by the economic rail element, and what by the social rail element? Q1 comments: The experience of East Coast franchise is interesting as it is in effect an arms length company owned by the UK Government. It has been successful at running a route where other operating companies have failed. Further the profits have gone back into Government coffers. There are practices of the East Coast operator especially in upgrading fares which are very unsatisfactory and from the users' point of view is probably a less friendly company than First Scotrail. Nevertheless it is an interesting model. It would be good not to lose the profits from the operation – this gives the possibility of them being ploughed back into the rail industry, This would be especially attractive where substantial slices of public money rae going into subsidising routes The idea of having some sort of mutual or community based operating company is interesting. 2. What should be the length of the contract for future franchises, and what factors lead you to this view? Q2 comments: 3. What risk support mechanism should be reflected within the franchise? Q3 comments: 4. What, if any, profit share mechanism should apply within the franchise? Q4 comments: See question 1 5. Under what terms should third parties be involved in the operation of passenger rail services? Q5 comments: See question 1 6. What is the best way to structure and incentivise the achievement of outcome measures whilst ensuring value for money? Q6 comments: 7. What level of performance bond and/or parent company guarantees are appropriate? Q7 comments: I believe that it is important to establish a viable measure of performance. While Public Performance Measure has, I think, been used universally by the rail industry it is doubtful whether it has any real meaning. According to the Rail Regulator PPM is the percentage of franchised passenger trains arriving at their destination, having made all booked calls, and within a specified lateness margin (typically five or ten minutes for some long-distance services). In theory at least it would be possible for a train to be late at a significant number of stations on the journey but still be regarded by PPM as having performed well by arriving at the final station on time or within the allowed margin. I do not know of any instances in Scotland but certainly elsewhere train companies have made very generous time allowances for the final leg of the journey (eg London trains into Liverpool Lime Street) thereby giving a false measure of their reliability. A 10 minute margin is quite significant if you are hoping to travel by a connecting service. The way in which Performance is measured needs review. 8. What sanctions should be used to ensure the franchisee fulfils its franchise commitments? Q8 comments: It is important in any programme of sanctions where public money has been paid for services which are in the event not delivered for any reason should be repaid or withheld in full as the case may be. Achieving reliability, performance and service quality 9. Under the franchise, should we incentivise good performance or only penalise poor performance? Q9 comments: 10. Should the performance regime be aligned with actual routes or service groups, or should there be one system for the whole of Scotland? Q10 comments: It is fundamental that trains are reliable and run to time. It seems to me that this is important whatever the route, inter-city, suburban or rural 11. How can we make the performance regime more aligned with passenger issues? Q11 comments: 12. What should the balance be between journey times and performance? Q12 comments: 13. Is a Service Quality Incentive Regime required? And if so should it cover all aspects of stations and service delivery, or just those being managed through the franchise? Q13 comments: 14. What other mechanisms could be used for assessing train and station quality? Q14 comments: Scottish train services 15. Can better use be made of existing train capacity, such as increasing the permitted standing time beyond the limit of 10 minutes or increasing the capacity limit? What is an acceptable limit for standing times on rail services? Q15 comments: I believe that great caution should be exercised here. The plain fact is that the operating companies have a better return if the the trains having standing passengers. Further the passengers have in fact paid for a seat. This becomes especially important when considering people with a disability. People are good about giving up seats in this circumstance but nevertheless this cannot be relied upon 16. Should the number of services making use of interchange stations (both rail to rail and rail to other modes) be increased to reduce the number of direct services? What would be the opportunities and challenges of this? Q16 comments:See Answer 29. Also better connections between trains and buses would enable people to make more use of public transport. 17. Should Government direct aspects of service provision such as frequency and journey time, or would these be better determined by the franchisee based on customer demand? Q17 comments: 18. What level of contract specification should we use the for the next ScotRail franchise? Q18 comments: One of the very worrying things is how the winter of 2010/2011 demonstrated that the Scottish railway system is not sufficiently prepared for the harsh weather conditions. Of especial concern is the fact that a significant proportion of the rolling stock was unable to cope with the weather conditions. It appeared that ice built up under the trains and that damage was caused when ice which had been built up under the train fell and bounced back causing damage to the train. A solution was found in creating skirts so that trains which were not in sheds could still be defrosted. Clearly those who dreamt up this strategy are to be congratulated. However all this had to be done in the on the hoof so to speak. Scotland does have harsh weather conditions and the problem with rolling stock had been completely unforeseen and what is more rolling stock which made up a significant part of the fleet had no proven capacity to operate under the harsh weather conditions. While it would unreasonable to expect a near perfect service in harsh weather nevertheless the expectation should be built-in to any franchise that the operating company should have equipment including rolling stock which can cope with bad weather. This is especially important when the bad conditions last more than a few days. 19. How should the contract incentivise the franchisee to be innovative in the provision of services? Q19 comments: Scottish rail fares 20. What should be the rationale for, and purpose of, our fares policy? Q20 comments: 21. What fares should be regulated by government and what should be set on a commercial basis? Do your recommendations change by geographic area (the Strathclyde area example), or by type of journey (for example suburban or intercity)? Q21 comments: It should be always born in mind that the fares in Britain are some of the most expensive in Europe. In Germany, where on the whole prices are higher, rail fares are much cheaper. It is certain that this situation is as a direct consequence of the way in the rail industry in Britain is structured. It should further be borne in mind that taking the cost of running a car to be somewhere in the region of 50p/mile (see AA's figures at http://www.theaa.com/allaboutcars/advice/advice_rcosts_petrol_table.jsp ) then for a family of four a car very often works out cheaper than travelling by train. If fares are raised to pay for improvements in the industry then this should be seen for what it is: an investment by the passenger and the passenger should get a financial return on their investment just like other investor. One way in which this could be done would be when profits are distributed is for a proportion of the profits reflecting the investment made through higher fares to be returned to the passenger by reducing the fares. 22. How should we achieve a balance between the taxpayer subsidy and passenger revenue contributions in funding the Scottish rail network? At what rate should fares be increased, and how feasible would it be to apply higher increases to Sections of the network which have recently been enhanced? Q22 comments: See 21 23. What should the difference be between peak and off-peak fares? Will this help encourage people to switch to travelling in the off-peak? Q23 comments: Scottish stations 24. How should we determine what rail stations are required and where, including whether a station should be closed? Q24 comments: Certainly it is wrong to create a principle, for example there should be no stations within less than a mile of each other, and then simply apply the principle without regard to the circumstances (eg urban or rural lines) . Beeching created a set of criteria which could applied to discover whether a line was viable or not. Many lines which met his criteria but some how missed his axe are now thriving or providing an important service. What is more services like those on the Argyle Line which did fall under the Beeching Axe have been brought back into use. What rather needs to be done is to be done is to look at individual cases and ask the question does this line serve the local community.