UK government’s emphasis on putting new trains on to the network is “not sustainable” for the industry, the chief executive of a railway rolling stock company has warned. When the government awards rail franchises, it can reward bids that promise to introduce new fleets.
Mary Grant, who has been in charge of Porterbrook since September 2017, said it was important that new trains were added to fleets to accommodate passenger growth, but added: “That will create a form of surplus in the short term . . . The model is not sustainable if there is a continuous cycle of a new train coming in and seven years later it might be displaced.”
Trains can run for more than 30 years, so the replacement of relatively new stock leaves rolling-stock companies with a surplus of idle off-lease trains. If they cannot find another home, they may have to be scrapped and written off. As an example, Ms Grant pointed to the fleet replacement on South Western Railway last year, when “new displaced new”.
There are 7,200 new trains coming on to the network between 2014 and 2021, equivalent to half the current total stock, the Rail Delivery Group trade body has said. Thanks to these orders, the average age of British trains will fall from 21 years in 2016-17 to 15 years by 2020-21, according to the RDG.
Porterbrook provides servicing and maintenance to trains throughout their lives, the need for which is initially diminished when there is a regular supply of new trains. The company bought one-third of British Rail’s rolling stock in 1994, when the government privatised the network, a move which split control between train operating companies, rolling-stock lease companies and an infrastructure owner. Porterbrook has subsequently had several owners; at present it is owned by a consortium including insurance companies and the investment arm of the energy company EDF.
At first, its main competitors were Angel Trains and Eversholt Rail, which bought the other two-thirds of British Rail’s stock in 1994. However, in recent years “a wall of capital in the infrastructure space” had attracted other players such as pension funds, said Ms Grant. These new players can undercut the rolling-stock companies.
Moreover, the government has been procuring trains for Crossrail and Thameslink directly from manufacturers, instead of via the rolling-stock companies. Porterbrook announced last week it was partnering with Elastacloud, an artificial intelligence company, to gather and analyse data from its trains, enabling predictive maintenance and “the right intervention at the right time”, Ms Grant said, such as replacing bulbs or detanking toilets. Porterbrook had revenue of £477.2m in 2017, down from £487m the year before, although pre-tax profit was up 23 per cent to £91.6m, mostly thanks to lower financing costs.
