1Rail GroupRail Group

The Big Question

Peter Wilkinson, Director, Rail Franchising

2Rail Group

Franchising?

3Rail Group

Public & Private Sector Partnerships Work

Passenger Growth

Passenger Satisfaction

Investment

Safety

4Rail Group

The Evolution of the Process

We want Engagement and Partnership with all participants

Inclusivity – Franchised and Open Access, freight, infrastructure and the industry supply chain

A process that is transparent and simple

Bidding propositions that are Innovative

And it has to be Safe

A future that is Sustainable

5Rail Group

Future Challenges

Capacity Punctuality and performance

Funding, costs and profitability

A more discerning passenger base

New skills and investment in the workforce

Investment in technology and innovation

Sustainability

6Rail Group

Growth and Capacity

Growth in Freight Ebay, amazon.co.uk,

Tesco

Growth in Passengers For many, no other

option More commuters

travelling further Costs of car ownership

and urbanisation

7Rail Group

The need for speed

Speed is not a luxury It should be an essential part of our ambition

and ambition causes innovation

Journey time improvement 125mph should be the basic standard on:

East Coast (140pmh post with IEP) West Coast (135mph with Pendolino) Great Western (140 with IEP) Great Eastern South Western (Bournemouth –

Southampton) Other routes that should touch 125 on key

sections TPE Midland Main Line Thames Valley

8Rail Group

Punctuality and Performance

Rolling Stock Reliability

Infrastructure

External Factors

Weather

Passenger Expectations

9Rail Group

Re-thinking our approach to the Timetable

We need a re-think about the timing of Britain’s railways to benefit existing passengers and attract new markets onto rail, in particular the car-dominated non-Central-London market.

reduced journey times, in many cases on the scale of those anticipated by HS2, from improved connections and new fast long distance expresses timed to maximise the potential of the existing infrastructure

increased frequencies, especially at busier times, without requiring additional trains to be run

an opportunity to take a fresh look at overlooked markets that could be served by rail

greater flexibility to tailor supply to demand, thereby avoiding unnecessary costs by providing, a consistent, regular and symmetric service pattern, seven days a week, from start to finish of service

Improved service recovery opportunities to expand the freight market increased access to the infrastructure for maintenance and

reduced need for disruptive engineering work

This will mean investment in some infrastructure, driven by the requirements of the timetable, to allow cross-platform interchange to take place at stations where the existing track layout does not allow this.

Network Rail and DfT will be working with operators to examine the opportunities that such a re-think might provide and we expect to pilot this through a forthcoming franchise competition.

10Rail Group

Funding Britain’s railways

rail subsidy (2011/12 prices)

Net cost to Government per passenger mile (p)

Ratio of taxpayer to farepayer funding (%)

Long distance 7.3p 25 : 75London and South East 4.8 19 : 81

Regional 31.1 61 : 39

Since privatisation, revenue growth of £2.3 billion in 2011-12 prices (mostly from increased passenger numbers rather than higher fares) has been more than offset by three factors:

• a £1.7 billion increase in train operating costs, which have grown in tandem with the growth of passenger numbers;

• £1.5 billion extra cost associated with funding Network Rail's regulatory asset base, its borrowing to finance capital projects; and

• £0.5 billion in additional rolling stock charges, again reflecting increased demand.

11Rail Group

The rail industry received £1.3bn of “other income” in 2011-12, an increase of 5.1% compared to 2010-11. • Train operators received £0.7bn from car

parking, property rental, catering and other sales.

• Network Rail received £0.6bn from its stations and property portfolio, and charges to freight and open access train operators.

A privatised railway - really?

12Rail Group

Cost and Profitability

Distribution of costs between the taxpayer and farepayer

Change the argument about Premium / Subsidy

Devolution and choices to be faced

Investment and private capital

Trade offs between long term short term “affordability” and long term value for money

13Rail Group

Community, Environment and Sustainability

Sustainability is fundamental to rail’s long term success

Must be embedded throughout the industry: it’s a core requirement not an optional extra.

We want ambitious, innovative proposals in our bids to deliver environmental improvements, support economic growth and bring communities together

There are today over 50 Community Rail Partnerships putting real money, peal people-power and real innovation into rail,

Community Rail Partnerships have re-opened local rail services and transformed long decaying assets into vital community resources

14Rail Group

New solutions

Up until now Where is the passenger? Or the workforce? One (franchising) model fits all No sense of ‘partnership’ Lots of ‘tell’ – little ‘ask’ An air of ‘we know best’ Unable to react to changing markets Have not created conditions for innovation or

investment No sense of ‘local’

Future Passenger must be at the centre of every aspect

of design, the workforce properly supported Less ‘tell’ – more ‘ask’ Contractual relationships fit for the specific railway

circumstances Real innovation properly recognised in bids New alliances and partnerships Localise the railway

15Rail Group

With innovation in mind…

Just suppose:

Instead of measuring arrival times, we measure the efficiency of connections?

Instead of the barriers being shut until your ticket opens them, they are open and only close if you don’t present your ticket

Instead of a map of routes, we have a map of flows – showing where people travel between and all modes – and we planned our railways around this

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What Will Our Legacy Be?

complacency has no part in it

The rest of the world is investing for tomorrow, now.

So should we…

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My Challenge To You

We need a new kind of partnership - at all levels, across all interfaces

Between;

• workforce and passengers

• DfT and the Industry

• Industry and the supply chain

• DfT, Regional and Local Government