PROFITS BEFORE PASSENGERS

It’s been over 20 years since John Major’s Conservative Government privatized the passenger and freight related parts of the then British Rail, after many years of under investment. While the infrastructure end of the railways, for the moment at least, remains in public ownership (or perhaps can more accurately can be described as remains under the control of a fairly indifferent state) the remainder is divided up amongst the ownership of private and foreign state owned railway companies.   

To be brutally honest, the rail network and the rail services that run upon it, without a public subsidy would be a far worse mess than they are at present. The desire of the Welsh Government to award the franchise as a not-for-dividend-profit has been thwarted by the Westminster Conservative Government  - which means that next year the franchise will be awarded on a dividend profit basis - so perhaps we should brace ourselves for rail service wise for more of the same.

The news that Arriva Trains Wales has run up a larger profit will bring scant comfort to rail passengers. The system of time-limited franchises, which was supposed to ensure good quality rail services, has since privatization largely failed to deliver a reasonably priced functional rail service. The Wales and Border franchise is currently run by Arriva trains Wales which is actually run at arms length by Deutsche Bahn AG which is a German railway company. Headquartered in Berlin, which is a private joint-stock company, with the Federal Republic of Germany being its single shareholder.

As a regular rail traveller I can watch (often in the relative comfort of non Arriva Trains Wales trains it must be said) the sun come up whilst trundling rapidly across the Gwent levels and regularly stand on Cardiff (Central) Station waiting for connections amidst the tantalising smells wafting across from the Brains brewery (at least when there is a South West or West wind). 

Many thousands of people commute to (and from work) in the south, I find that to be honest, aside from the occasional glitch (over running maintenance from weekends, periodic broken down trains, broken doors, point’s failures and cable thefts, etc) most of the time the system seems to function reasonably well – even if sitting down is not an option on the Valley Lines. Having lived worked and commuted in London (for some seven and half years) I find myself commuting by train again - on a good day I can make it from station to station (Newport to Cathays) in around 25 minutes (and that with one change) which is not too bad.

Other rail travellers are not so lucky, with rail franchise operators running services that ensure certain connections literally cannot be made, which is one way to avoid getting fined. This is not a satisfactory way to run a rail service, the key word here being ‘Service’. Obviously this state of affairs speaks volumes, especially as it fails to impact on the Westminster elite (I use the term loosely) as they, with a few honourable exceptions, tend not to travel by train very much save when they are trying to cultivate votes.

In much of our country trains a once cheap and reasonably reliable form of public transport is conspicuous by its absence, that not to mention costs and infrequent services deter actual and potential rail passengers. When you factor in the legacy of the Conservative and Labour rail service rundown and cuts in the 1960 and early 1970’s and excessive profiteering on the part of the privatised passenger franchise holders and much is explained.

Our country suffered particularly badly from rail cuts in the late 1960’s when Labour was in office under Harold Wilson, that and the pit closure programme that hit hard in the south and north east. The privatisation of British Rail, something that New Labour loudly boasted that they themselves would have done if the Conservatives had not already done it, was one of the latter significant more questionable ideologically driven batch of privatisations (between 1994 and 1997).

Our country’s rail region Wales and West ended up as Wessex Trains and Wales and Borders which at one point included the Cardiff Railway Company services which operated as Valley Lines. The franchise was then split into two separate franchises, which are currently run by First Great Western and Arriva Trains Wales. Our current franchise was awarded to Arriva Trains Wales in 2003 and runs for 15 years, and will end in 2018.

Arriva Trains Wales is the only train firm covered by the Welsh Government’s transport remit. Any longer-distance services e.g. Swansea or Cardiff to Paddington are currently operated by First Great Western who have their fares regulated by the Westminster Department for Transport. Now while this may well be ancient history, it has implications for the way the railway franchises run how their profits are made and where they go. 

Despite the best efforts of New Labour and the Con Dems to reduce it, the franchise companies still receive a significant chunk of public (state) funding. Basically this has to be repaid to the Government before any profits can be made on top – hence the regular (and painful) rise in rail fares. It would make more sense for profits made to stay in the system rather than get hovered up to pay shareholders dividends and senior mangers fat bonuses.

The service we get actually reflects the disinterested priorities of the franchise holder rather than our national priorities when it comes to our railways and the services we need. Now, for once, Wales actually has some powers over our railways, the Transport (Wales) Act which came into effect in February 2006 actually gave the National Assembly the powers to plan and co-ordinate an integrated transport system, how much longer do we have to wait to see some vision?

Any vision is certainly not going to come from Westminster, back in March 2017, the Westminster Conservative government decided, whether by accident, design or as a result of a general indifference to Wales (and Welsh interests) not to devolve control of that portion of Network Rail to the Wales but to retain it in London. It makes me wonder whether after the forthcoming Westminster election is concluded whether Network Rail is going to be privatised?

PROFIT BEFORE PASSENGERS?

The occasionally Wales based Westminster based Welsh Affairs Committee has condemned the "old and cramped" trains provided by Arriva Trains Wales. The Select Committee has noted that many of the problems associated with the rail franchise were down to "a huge failure" to allow for more passengers when the current 15-year franchise was originally awarded in 2003. 

Even Arriva informed the committee some of the trains being used were "approaching 4.5 million miles on the clock". That’s an equivalent to travelling to the moon and back nine times – but without any of the mod cons that the Apollo spacecraft had. Personally I would have some concerns about going to the moon in a 27-year-old spacecraft…but at least it might be warmer than some of the trains I have ridden in to and from work this and previous winters. 

The Select Committee Report has calculated that rail passenger numbers have increased by approximately 75% since the franchise was first established. No allowance for growth in passenger numbers and extra trains in the terms of the contract awarded to Arriva by the Strategic Rail Authority, a body scrapped in 2006, it was revealed. 

The committee was also told that the average age of the Wales and Borders fleet of trains was about 27 years old – if we think about the maintenance and reliability issues that come with running a 27-year-old car, then perhaps non regular rail users can begin to get a picture of the state of the rolling stock. 

The Select Committee was right to recommend, because of the cross-border nature of some rail routes are included in the franchise, that a protocol be established allowing English rail passengers' concerns to be heard by Welsh ministers. As was also noted by the Select Committee, this time, when the franchise comes up for renewal in 2018 it will be the Welsh Government who will have the responsibility to ensure there are improvements. 

Hopefully the Welsh Government ministers will pay particular attention to prospective bidders plans for the new franchise, especially as the current rail franchise holder in the running to compete for the new franchise. Those of us who are regular rail users have had to live with an often-ramshackle rail service, and will continue to do so for at least a few years more. 

At least from 2018 the decision on who will run the next Wales and Borders franchise will be made in Wales. This may only prove to be a crumb of comfort if the Welsh Government has the vision, the ambition and the powers to ensure that we have rail franchise that’s has expanded capacity, reasonably priced rail fares and a plan to grow our rail network.

HERE WE GO AGAIN

On the 6^th February the 6 Nations rugby internationals kick off, rugby fans will prepare themselves for over crowded trains and the usual excuses from the rail franchise holders. On Friday 28^thFebruary Wales play France. Rugby fans will face the ordeal of a Friday night international match, with an 8pm kick-off and the logistical perfect storm that awaits them. 

Simply getting to (and from) Cardiff on a Friday evening, with the lack of late trains, and scheduled maintenance – may more than try fans patience. It will be grim for Welsh Rugby fans, travelling south and east to Cardiff before kick-off, but it may be even grimmer afterwards when they try to get home. 

Bitter experience relayed by supporters (and would be rail travellers) tells me that the franchise holders will run short trains, when these trains reach Abergavenny, Pontypool, Cwmbran, Chepstow, Caldicot, Severn Tunnel Junction and Newport (not to mention Hereford, Lydney and Gloucester) they will be so full that passengers cannot board them. 

Prepare for the usual excuses from Arriva Trains Wales as to why this overcrowding problem happens and how it will be avoided next time. The reality is that the short-term rental costs of hiring extra trains would be cost prohibitive. The day the rail franchise moves to a not for dividend profit cannot come soon enough.

THE RIGHT CHOICE?

The sensible choice would be for the Welsh Government to follow Scottish example of freezing off-peak prices, as RPI inflation figures (3.1% in the year to July) threaten another 4.1% increase from January 2014 across Wales. It is worth noting that Trade union leaders and transport experts have called on the Government to follow Scotland’s lead and freeze or limit rises in train fares for passengers.  The Welsh Government’s default position is that fares should only rise by 1% above the July inflation figure. The problem is that while the Labour in Wales administration could choose to freeze or limit the fares increase (this deal has been made every year since 2001 for the Wales and the Borders franchise) this is not set in stone.

A choice: Not for profit or Profit before people?

The Western Mail’s sources revealed yesterday that although Scotland is freezing the cost of off-peak journeys. There is a distinct possibility that hard-pressed Welsh commuters may well end up having to face another 4.1% increase in January 2014, this would be on top of the 4% rise at the start of this year (2013).  In Scotland, the cost peak-rail travel will rise with inflation at 3.1% and the freeze in off-peak travel will cover about 40% of rail journeys. A 4.1% increase in rail fares would increase the cost of an annual commuter route season ticket between Pontypridd and Cardiff from £880 to £916 and between Aberdare and Cardiff from £1,040 to around £1,082.

The current franchise was awarded to Arriva Trains Wales in 2003 and runs for 15 years, and is due to end in 2018. There have been many persistent calls for the rail franchise to be run as a not-for-profit operation – with profits being feed back into the system, rather than vanishing to pay shareholders dividends. The Welsh Government has been considering this option for when the deal ends. Arriva Trains Wales is the only train firm covered by the Welsh Government’s transport remit. Any longer-distance services e.g. Swansea or Cardiff to Paddington, are currently operated by First Great Western, who have their fares regulated by the UK Government Department for Transport. They have stated that rail fares on the routes it controls would increase by an average of 4.1% from January 2013.

To make matters worse the announced rise in rail fares will come take place against a backdrop of squeezed incomes, with average earnings increasing by just 1% and many experiencing pay freezes. There have been calls for the ending the annual inflation-plus fares rise, with them being replaced by a new formula, RPI minus 1% from 2015.  The rail fare rises which will arrive in January’s rise will be the sixth time in seven years that rail fares have outstripped wages. It has been calculated that between 2008 and next January rail fares will have risen some 40%, compared with a 15% increase in average earnings.

It should also be noted that the cost of some season tickets may rise by 9% as some routes are not subject to regulation under franchise agreements. All these rail fare increases will take place against projections of a 2.4% increase in average earnings next year. The TUC has suggested that since the railways were privatised, they have cost taxpayers about £1.2 billion pounds a year and this with what has been described as “minimal” investment in trains and stations.  

The Department for Transport continues to insist that the UK Westminster Government is investing record amounts in the railways to help deliver economic growth and boost passenger capacity. Additionally the Association of Train Operating Companies has also insisted that only a small proportion of income goes on profits, with most going on staff costs and investment. They also say that railway companies only make modest profits with 3p from every pound earned going towards profit, 17p goes towards staff costs, and 48p goes towards maintaining and improving infrastructure (including track and signalling).

At the end of the day, this is good news for rail operators and shareholders but bad news for hard-pressed long suffering rail commuters who are having to hand over even more of their pay packets for poor-quality services. We are where we are because regulated fares, including peak-time journeys, have been set at RPI inflation plus 1% since 2004 because successive Governments (both Labour and Con Dem) have been trying to shift the burden of paying for the railways from taxpayers to rail passengers.

It is Somewhat ironic that the persistent attempts of successive Westminster governments to wash their collective hands of their responsibilities for rail transport infrastructure come at a time when annual passenger journey numbers have increased from 750 million to 1.5 billion. The day that the rail franchise in our country is run on a not for profit basis, with profits being reinvested into the business, cannot come soon enough.

LEADERSHIP NOT LETHARGY!

Plaid’s right with its call for the management of Welsh railways to be put in the hands of a 'not for distributable profit' company when the current franchise contract with Arriva Trains Wales ends in 2018. In challenging times our country needs real leadership not lethargy, we need ambitious solutions to our problems, not make do and mend, if we are to make Wales the successful nation that it can be.

At a time when people are looking for an alternative to the car due to high fuel prices we have a situation where near continual hikes in rail fares (which just happen to boost rail company profits) mean that more and more people are finding rail travel unaffordable as well. Simple common sense suggests that we need to change the way the franchise system works here in Wales.

Plaid proposed to put Welsh railways into the hands of a ‘not for profit’ company back in November 2010 before the 2011 Welsh General Election campaign. If the current Welsh Labour government is serious about doing this then most of the preparation work for the re-franchising needs to be undertaken during the current Assembly term, so that there is sufficient planning time to develop a delivery model that is better suited to the needs of the people in Wales.

The Plaid Cymru plans would also mean that, in creating a not-for-distributable-profit organisation to run Welsh railways, more money could be made available to invest in rail services. This money could be invested directly to create more frequent services in the South Wales valleys, more frequent journeys to West Wales and on the Cambrian line, as well as additional services between the north and south of Wales. This could also mean more investment in new rolling stock to help keep pace with increasing passenger demand.

Now even though we are in difficult economic times, the Welsh government should be prepared to take radical and innovative action in order to get the best deal for the people of Wales. Sitting back and doing nothing is not an option, as rail fares in Wales continue to rise by as much as 11% while so many people are struggling to cope financially. If you are going to spend public money it is important to work it extra hard. At time when we have shrinking public sector budgets it is extra important that the Welsh government gets the best possible value for money out of every penny of public funds.

The Welsh government needs to wake up and to step up to the mark and use the excellent example of how a ‘not-for-profit’ company, Glas Cymru, can operate as the model to ensure the delivery of our nations rail services. There is absolutely no reason why train services here in Wales could not be run by a company with a similar not-for profit model, with a board containing representation from the Welsh government, experts from the fields of integrated transport, customer service, accessibility, rail projects and finance.

We need long term benefits not short term solutions, the creation of a not for profit rail franchise would deliver long term benefits for the economy of Wales and help to tackle climate change. When it comes to improving infrastructure, rail, is crucial to the sustainable development of the Welsh economy. An all Wales not for profit rail franchise could be a further step toward creating a national transport system for Wales, beginning to integrate all modes of public transport under one ticketing scheme similar, as is used in the Transport for London model.

ON THE RIGHT TRACK

It's worth noting that in 2003, a 15 year franchise for running railway services in Wales was awarded to Arriva Trains Wales. Arriva Trains Wales is currently making a healthy profit from this agreement. Despite this, most demand for additional rail services are currently met directly by Welsh Assembly Government funds and are not funded by Arriva Trains Wales which as its priority is to service its shareholders.

Plaid Cymru's announcement that we will consider putting the management of Welsh railways in the hands of a 'not for profit' company when the current franchise contract with Arriva Trains Wales ends in 2018 is significant. This is major step forward when it comes to developing a transport system to suite the needs of the people of Wales, rather than as an add on to transport policy in England.

In Wales we should consider ensuring the transfer of control over the franchise to Welsh Ministers in order to put the franchise in the hands of a ‘not-for-profit’ company. This would allow the new company to reinvest its profits in developing better and more train services for people, instead of the current model where the majority of profits are returned to Arriva Trains Wales' shareholders. This could release extra money to invest in an improved All-Wales Rail Service which could amount to between £100m - £120m over a decade.

There are some serious potential benefits:

• Significant savings – releasing a fund for possible reinvestment projects such as re-opening lines across Wales, improving journey times or purchasing additional rolling stock.

• The development of an All-Wales transport network – with integrated ticketing and timetables across public transport in Wales.

The Glas Cymru model of how a ‘not-for-profit’ company can operate, already provides an excellent example of what's possible and could have great potential for the delivery of much better and more integrated rail services here in Wales.

Plaid Cymru, in government, has gone to great lengths to ensure that improvements to current rail services where they can be made, have been made, running 'rail in Wales,for Wales, means that the possibilities of reopening previously closed railway lines and closed railway stations becomes something more than a pipe-dream. It would also make sense to get the powers to take over responsibility for running the tracks from Network Rail - as any rail projects in Wales are going to be well down the list of priorities. There needs to be much better integration of track and train - something that will allow for far greater efficiencies.

There is a clear need to ensure that easily accessible rail services are available to far more people in the near future. Improving infrastructure, including rail, is absolutely vital to the development of the Welsh economy - to create the successful, sustainable, prosperous and green nation that we know Wales can be.