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Intercity Passenger Rail Standing Committee on Rail Transportation Denver, Colorado September 2014 2 Institutional challenges and opportunities for competitive contracting in Intercity Passenger Rail. Tim Buxton FirstGroup International Business Development Director 3 FirstGroup the leading transport operator in Europe and North America • 2.5 billion passengers a year • Revenues of more than $11 billion (2014) • Approximately 117,000 employees 4 FirstGroup Vision To provide solutions for an increasingly congested world... keeping people moving and communities prospering. 5 FirstStudent 6 FirstTransit 7 Greyhound 8 FirstBus (UK & Ireland) 9 FirstRail (UK & Scandinavia) 10 UK Rail 2013/14 • Currently the largest rail operator in the UK with approximately a quarter of the country’s passenger rail network • Over 13,500 members of staff employed across four major heavy rail franchises, operating one long-distance open access network • Operator of London’s only tram network • More than 330m annual passengers on commuter, Intercity, Regional, Sleeper, Long Distance and Light Rail trains • Intercity passenger rail operations between Denmark and Sweden in a JV with Danish State Railways (DSB) 11 Awards 2013/14 • UK Rail Business of the Year • UK Train Operator of the Year • European Intercity Operator of the Year • Outstanding Contribution to Railway Industry 12 Liberalisation of the UK Rail Market • Railway Act 1993 Moving away from a nationalised industry to a privately-run and publicly-accountable railway • Introduction of the Franchising Model Private train companies compete to win and run passenger rail services (usually 7-10 years with extension periods) • Strong partnership between public and private sectors Delivering sustainable growth • Generating more revenues Helping to reduce public subsidies and net direct government support to train operating companies • Reducing commercial risk Borne by the operator with greater incentives to grow revenues and reduce costs 13 More InterCity Trains Number of trains per day ScotRail Glasgow to Edinburgh First TransPennine Express Leeds to Manchester First Great Western Cardiff to London First Great Western Bristol to London SOURCE: ATOC 14 Net Government support to TOCS Reduced from £1.4 billion to £81million in a decade 2001- 02 £1.4bn 2011-12 £81m SOURCE: ATOC 15 Surplus Generated by Train Operators Money to Government to reinvest in rail 1997-98 2011-12 Train company operating profits 1997-98 2011-12 £100 Million £100 Million SOURCE: ATOC Growth & Prosperity 16 FirstGroup Intercity Services 17 First TransPennine Express Intercity Service • Dedicated Intercity service linking key cities and major towns in the North West of England since 2003 • 300 services daily to 105 stations • 70,000 customers daily • Services running 24 hours a day 18 First TransPennine Express On-time performance: percentage of trains arriving on time (2003-2014) 100 80 60 40 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Percentage of trains arriving on time Trendline SOURCE: FTPE 19 First Hull Trains Intercity Service • Open access Intercity service linking London and Hull, North East of England, since 2000 • 7 weekday services and 5 weekend services to 9 stations • 735,000 customers annually • Free Wi-Fi throughout with complimentary at-seat catering in First Class 20 First Hull Trains National Rail Passenger Survey 2014 100 90 96 97 90 80 86 83 70 72 60 66 50 55 40 30 20 10 0 Overall Satisfaction Punctuality / Reliability Sufficient Room to Sit Value for Money First Hull Trains Intercity Average SOURCE: Passenger Focus 21 First GreatWestern Intercity Service • Franchised Intercity service linking London to Western England and Wales since 1998 • One of the largest and the most complex rail network in the UK • 9,000 services calling at 276 stations, serving 1.5 million passengers every week • The only UK rail company to operate High-Speed Intercity, Commuter, Regional, and Sleeper services 22 First Great Western Growth in passenger journeys and fewer complaints (2006-2013) 120 181 200 95.6 97.3 180 100 151 90.5 160 83.8 83.9 140 80 130 181 181 120 60 110 97 100 87 80 40 86 77 70 60 20 40 20 Passenger Journeys (million) 0 0 Complaints per 100,000 Journeys 2006-07 2007-08 2008-09 2010-11 2011-12 2012-13 2013-14 Passenger Journeys (million) Complaints per 100,000 Journeys SOURCE: ATOC 23 Innovation & Growth FirstGroup UK Rail & UK Bus • Leveraging our bus network and capabilities for increased rail ridership – developing a feeder system • Integration of all modes of transport – seamless end-to-end journeys (e.g. RailAir connecting Reading Station to Heathrow Airport) • Value-added services to increase customer experience (e.g. RailFly – partnership between FGW and Singapore Airlines) • Proven experience in lengthening life of assets • Extensive special event management experience (e.g. Henley Regatta, Glastonbury Music Festival, Ryder Cup) Government supporttothe railindustry Summary £ Billions 0 1 2 3 4 5 6 7 8 1982-83 Net SubsidytoTOCs 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 Payment toNationalRail 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 Passenger Journeys 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11 2011-12 0 200 400 600 800 1,000 1,200 1,400 1,600 SOURCE: KPMG Million journeys per annum per journeys Million 24 25 Successes of UK Intercity Rail Privatisation • Record numbers of passengers, reversing a downward trend, with the longest sustained growth in history • Significant improvements in performance, punctuality and service frequency between major cities • Improvements in safety and passenger approval ratings • Operators are generating more revenues, helping to reduce public subsidies and sustain investment while earning modest operating margins • Record levels of satisfaction, while the network is managed more intensively and the average price per mile paid by passengers has remained almost flat 26 Institutional challenges and opportunities for competitive contracting in Intercity Passenger Rail. Tim Buxton FirstGroup International Business Development Director.
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