Yes it has all been a bit quiet hasn’t it? There hasn’t been much time for modelling of late with plenty of other stuff to do. Half term saw MiniMe 1 build both the Lego bucket wheel excavator and Bugatti Chiron with me relegated to pieces-getter – Lego seems to think you need to be a teenager to do them but I’ve got a 6yo who loves his Technic, and the bigger the better.
Work wise, the world is a bit topsy-turvy thanks to Chris Grayling’s jerky knee. Our usual work streams (franchising) have been a bit dry so we’ve been looking elsewhere. My main strength is strategy so I’m doing a fair amount on rolling stock and discontinuous electrification currently.
However, with all the mayhem going on I thought I would join some dots up for you all on how and why we are where we are, and what will happen next (no one knows!)
Franchising – when the railway world changed in the years 1994-1996, there were quite a number of franchises. The list below might give you a twinge of nostalgia (maybe not!). These got reduced in number, some faster than others (such as Island Line being absorbed into South Western), while others have split off (such as Caledonian Sleeper being split from ScotRail).
You may also like this little table demonstrating how much the Govt pays for your ticket compared to how much you pay. Note that East Coast is currently the only one paying a premium back to the Government and also note the eye watering £100 the Govt subsidises every sleeper ticket by!
However, the franchising system has on the main remained fairly constant, and was not in itself a reason for the pause to carry out the Williams Rail Review, had a reasonable, and realistic approach to the competition been taken. The review was announced when it was, I believe, for one simple reason: Cross Country. The Cross Country franchise competition was about to begin and plenty of industry sources were telling us that only Arriva (the incumbent) and Stagecoach had expressed interest. All the others had already publicly, or privately, said they weren’t interested.
Unfortunately, wind back a few months, and the Govt had decided to strip Virgin of East Coast (instead of running it under a management contract which is what many in the industry thought would have been a good idea). The Govt had done this because the reason Virgin couldn’t keep to its commitments is because it had overbid based on a timeline list published by the DfT of infrastructure improvements that Network Rail were supposed to do, despite the fact that most people in the industry knew they couldn’t be delivered in the times stated. Inevitably, Network Rail didn’t, which meant Virgin couldn’t, and the only way the Govt could deflect the attention of their failings through Network Rail was to direct it back onto Virgin by stripping the franchise off them – remember this “failure” cost Virgin East Coast £200m and didn’t cost the taxpayer anything. .
Virgin East Coast was actually 90% Stagecoach and 10% Virgin. When an operator is stripped of its franchise, the owning group loses its “passport” to bid for franchises. This meant Stagecoach no longer could bid. The passport issuing committee meets every quarter so there was an opportunity for Stagecoach to get a new passport before the Cross Country franchise bid went live.
Unfortunately (again) industry sources tell us that one of the committee was still on maternity leave so the passport couldn’t be issued which meant Stagecoach couldn’t bid so the Govt was approaching a cliff edge of having to say they didn’t have enough bidders to run a competition for Cross Country. So to avoid having to admit a c0ck up, Mr Grayling paused franchising and launched the Williams Rail Review.
So here we are, mid review. One thing we have all been sure that the review would say is that vertical integration might be a good thing. I mean it worked from the start of the railways until 1994 so it makes sense. Having the people who look after the track, signal the trains, and run the trains all in the same camp makes a modicum of sense.
An argument against it has been the idea that breaking up Network Rail means a lack of joined up thinking. That’s a presumption that thinking can’t be joined up across company lines. However, rolling stock does have joined up thinking across multiple owners and operators – there are technical best practice groups to ensure that. Also, Network Rail has had since 1948 to be joined up and they’ve not managed it yet. The same standards are applied differently in different locations in the country, maintenance and renewals decisions are not co-ordinated. In fact, splitting it up may help to make it coordinated by forcing the introduction of best practice groups. (As an aside, my old boss from when I started on the railway cites the example that in BR days a fleet of EMUs was developed in one building not fitted with sanders, while in the building next door another team was proving that the lack of weight of modern EMUs meant that from now on they must all be built with sanders. There was no coordination between the teams until the new EMUs started SPADing all over the place and they then had to be retrofitted with sanders – proof that being in one organisation does not necessarily breed joined up thinking).
Keith Williams, in his mid-review speech to the industry, said that the franchising model is broken. It is OK for someone to say something in a speech, but the next day DfT spread the news across their web front page.
How DfT now expects to award the East Midlands and South Eastern franchises, both of which are expected imminently, having publicly stated that franchising is broken remains to be seen. West Coast may escape the “franchising is broken” label as it is intended to be a deep partnership with both Network Rail and HS2 so may be considered a semi-vertical integration.
Andrew Haines, Head of Network Rail, did a 100 day review as part of him taking up the role. This resulted in him deciding to introduce regions and to devolve powers to those regions so they become self supporting. Keith Williams, in his speech said that he endorsed Network Rail’s plan. This is interesting as it suggests that whatever solution is recommended will fit into NR’s regions strategy. So here’s some thoughts on it.
On the right is the “new” Network Rail regions. On the left is the 1948 nationalisation regions. Seem familiar?! Interesting points include all of Wales becoming Western when originally it was split along the north Wales coast (and then later of course down the middle when the Cambrian transferred to LM); Derby – Crewe seems to be in Eastern – presumably because this route is served by East Midlands Trains, not by LNWR.
From this presumption of the Rail Review using this new map, I produced a table of options.
Basically, are we going to end up with the Big Four? Well no, because Scotland and Wales have devolution and they’re not going to give them back! So we end up with the Big Six (apologies to Arthur Ransome). However, Transport for the North have fought hard for devolution of Northern and TPE services. Also interesting that NR’s regions map shows the routes for Eastern and LNW split between north and south already. Transport for the West Midlands (West Midlands Combined Authority) also have a stake in their services (what was Centro) so if that was split off as a concession you end up with something like either of the second two columns which have the East and West Coast Main Lines as either separate entities or combined with one of the other franchises – I personally think there is a drive to keep them separate – they are after all the true Intercity routes, so we may get something like the middle column. Or I may be talking complete rubbish.
What will the railways look like? We will find out in September!
And that is why I’ve not been doing any modelling. In the meantime though, my railcar did get into 009 news!