Reeve’s team has calculated that the franchising process will have saved Transport Scotland more than £1bn over ten years, when compared with projections for the network rolling forward current costs. This colossal saving is a robust riposte to the too-common notion that a high-quality railway must cost more.
Says Reeve: “Bidders accepted that quality initiatives (for example, on the inter-city routes) will drive additional patronage, and that SMART ticketing will persuade more to use public transport. Additional revenue will be achieved without hiking prices. So we have achieved a substantial improvement in quality, coupled with a significant reduction in cost to the taxpayer.”
In terms of managing the franchise and the developing alliance between Network Rail and ScotRail, Reeve sees mutual understanding as central to the process.
“We now have people in the industry who have been on one ‘side’ or the other for 15 years or more. They are very able and motivated, but they can remain largely ignorant of the other half of the rail industry. That produces sub-optimal decisions and outcomes, from the perspective of the industry at large and its effect on the whole economy. It is vital that TOCs understand the nature of Network Rail’s cost structure, and people in Network Rail are able to appreciate the nature of TOCs’ revenue imperatives.”
Looking to the future for ScotRail, growing demand for rail travel shows no sign of abating, while car usage suggests there is validity in claims that the country is experiencing ‘peak car’.
The prospect of accelerating passenger growth through a network of inter-city services (operated by 27 refurbished HST sets released by Great Western Main Line electrification), coupled with the Edinburgh-Glasgow Improvement Programme, is promising. Reeve also believes that urban air quality issues will become more prominent, as respiratory illnesses and an estimated 2,000 deaths a year (Health Protection Scotland) drive measures to reduce vehicle pollutants.
“There is certain to be continued budget pressure, and rightly so,” he says.
“Railways must demonstrate that they are as good at achieving the overall objectives of the Scottish Government as any other means. But investment depends very much on one’s perspective.
“While working at the Strategic Rail Authority as director of project sponsorship, the Borders Railway was well down the pecking order, so I had to cull it. Viewed from within Scotland, its reinstatement is the right answer for the Borders, so it was a pleasure to oversee the team that pushed the Waverley Railway (Scotland) Act 2006 through the Scottish Parliament and then pilot the project. The answer to questions is inevitably determined or influenced by where they are asked and the railway is a good illustration of how devolution works.”
So if one was to summarise Scotland’s answer to the question ‘what is franchising for?’, one could say that it is to give railways a dynamic role in the economy by incentivising growth through quality.
Reeve applauds the priorities set out by Network Rail’s chief executive Mark Carne - safety, reliability, capacity, cost - but would add a fifth… customers.
“How the first four are managed has a big effect on how many customers you get. The railway has done a good job since devolution, but our vision for the future of rail services is going to be a fantastic thing to watch developing over the next few years. I am confident we shall go from a rail network that the people of Scotland already like to one they recognise that they can and should be proud of.”
Expert comment: Lord Bill Bradshaw
The letting by the Scottish Government of the new Caledonian Sleeper and ScotRail franchises sets out a fresh approach where ambition is a crucial part of the process, both on the part of those administering the competition and the franchisees.
At the beginning of the article, Bill Reeve describes the sclerotic state of the process in England and Wales, which has done little or nothing to realise the potential of our railways. Although this attitude may be improving, it is plain that franchising is best handled locally, as close to the users as possible.
The realising of the tourist potential of the railway is apparent, and the confidence of government and franchisees shows through.
The realisation that rolling stock is a long-term issue, and the willingness of the Scottish Government to offer a guarantee, contrasts with the way that Westminster has for a long time approached the issue. This is a major fault in the system, leading to chronic overcrowding and a shortage of rolling stock where it is quite impossible to improve services.
It is interesting to read of quality improvements that have been included in the new ScotRail franchise, and will hopefully be included in future franchise competitions. The incentivising of growth is very welcome, and the projections about future finances are refreshing and encouraging.
