Unprofitable rail services could be axed under Government proposals

[starrymarkb]

Not just down under, they are back in the UK running buses and doing refuse as Veolia....

 

[Ivo]

Garbage trucks eh? Sounds about right

 

[anthony263]

Their still running strong in the UK too under the name of Veolia running many bus services in the UK and rail services across Europe, just how long before they return to UK rail operations is surely only a matter of time?

Yes they are running buses and not doing a very good job in somes places particulary the pontypridd area where they have made massive cuts and now we have a large bus war

 

[Dennis]

I think it's wrong to even think about cutting services (climate change obligations, modal shift asirations etc) so lets dig through some figures and find out how rail revenues might be increased.

Studying the official stats helps (why don't we ever see rigourous analysis of these?) - data quoted is from the latest ORR National Rail trends survey which may be found here;
http://www.rail-reg.gov.uk/upload/pdf/rolling-c1-railusage-200510.pdf

In Q3 09-10, there were 12.9 billion passenger km generating a revenue of £1.5 billion, thats an average of 12p/km - remarkably cheap isn't it? As a generalisation, I would suggest too cheap.

31% of rail passenger km are on season tickets; this is bound to be mostly passengers travelling to and from work during peak times. That's when capacity is a problem - additional rolling stock required, signalling and other infrastructure contraints are problematical. These passengers therefore require some additional spend to shift them. But how much do they pay?

Season ticket journeys totalled 3.7 billion passenger km and generated revenue of £403 million - thats 11p/km.
How come season ticket holders, for whom big ticket extra resources are needed, pay less?

Incidentally, if I turned up at my local mainline station (Bath Spa) on Monday morning to buy a ticket to London arriving before 9AM, I'd pay over 45p/km - that's over four times what the capacity grabbing season ticket holders pay!

Also, the 12.9 billion passenger km was on 125 million train km, an average loading of over 100 passengers for each train km.
If trains travel at roughly 1km/min (an assumption on my part - this speed being less than 50mph), and there are 100 passengers paying 12p/km, average revenue = £720/train hour.

Now, if that's the income from fares and it still needs 21p/passenger kilometre additional subsidy to the rail industry as a whole, could someone provide a rigorous breakdown of the costs to run a train please - I'm finding it very difficult to see how it can possibly cost about £2000/hour to run an average passenger train.

 

[moggie]

So - the tories are going to allow TOC's to withdraw lightly used unprofiatble trains but allow them to increase services on lines with greater demand. Yes - this sounds like so much sense like all Tory policies doesn't it??

or could it be code for;

Grant aided services to lesser used lines with principally commuter traffic into city conurbations will have their subsidies reduced / removed thus creating a reduction in services and consequent drop in traffic caused by lack of frequency or late start / early end of the reduced service. After all the country can't afford it with the billons of tax payers money tied up in financial share holdings. So what of the positive effects of incresing services on well used lines?

Well perhaps the reason free spending romantics like Adonis couldn't sort this out is because this requires long term capital spending on increasing track infrastructure capacity which the industry has been streched to accomodate over the last few years - but hold on - that's the money tied up in the banks and on top of the extra £24 billion the tories are going to add to the PSBR at a stroke? So that won't happen either. Therefore, no increase in capacity = whingeing TOC's but no extra trains. Never mind - no need to worry about that there's always the tories ace card - their master plan - unemployment to remove the demand and perhaps a of our foreign visitors - after all it's a price worth paying as they say.

And in a few years time when the rail network is knackered due to a backlog of renewals caused by the spending freeze and is holding back the green shoots of recovery where will the experienced engineers be to pick up the pieces once again - working at tesco or better still enjoing their premature retirement like me I hope. Tories or ConDems if thats what you call them never learn and never invest - which is why the next ones in have to go OTT to make up for it (and of course save the *ankers in the process).

My fishing rod is ready!

 

[O L Leigh]

So, we're back to Beeching.

It is a peculiarly British malady to expect our railways to be able to pay their way. Our continental brethren have already made the leap of logic that has helped them to understand that a rail network can be successful and helpful to the wider national economy in spite of the size of the subsidy it might require. Consequently they are investing in large-scale infrastructure projects and actually getting on and building things like new long distance high-speed lines while comparatively modest projects like Crossrail and Thameslink 2000 can trace their roots back to the late 1980's/early 1990's but won't see completion for at least another six or seven years. Heck, we can't even commit to the electrification of a number of existing key routes in and out of the capital.

The problem is that everyone wants the benefits of large-scale projects like rail improvements but no-one wants to pay for it or have it in their backyard. Quite frankly the British public (and, by extension, governments of all hue and philosophy) need a damn good slap. If the UK is to remain a world leader in any field, we have to understand that we are going to need to invest in the infrastructure to support our economy, and if that means we have to dig deep and pay out large sums of money in order to reap the benefits over the long term (a period measured in decades) then so be it. We need to give Nitwit Rail the budget to deliver the projects required and the ability to do so in a timely and efficient manner. In short, we need to get over our modern sensibilities in order to do the really important things.

I had hoped that there could be a new way of safeguarding lightly used services and incentivising the operators to improve them. While it may not be enough to return marginal services to profitability, investment in things like newer/longer rolling stock and increased service frequency always increases the usage of the service. Taken in isolation this probably isn't enough to get people excited, but when you consider the wider picture it always has to be good.

A person living in Newmarket and working in London used to have a terrible time getting to work and would probably have had to drive to somewhere like Cambridge or Whittlesford to catch a train to work. Since the rail service to Cambridge was improved and the frequency increased, that person now has much greater options for catching a train and leaving the car on the driveway saving a road journey and easing the pressure on parking and road space. This is surely a good thing.

I appreciate that this is just one proposal contained within a consultation document, but it's a bad one. There are options that don't require the withdrawal of lightly used services. While I have no interest in the political implications of this (I'm more of a pragmatist), this doesn't sit very well with the values of Cameron's much vaunted "Big Society" agenda.

O L Leigh

 

[mrcheek]

How come season ticket holders, for whom big ticket extra resources are needed, pay less?

Because every business in the universe gives discounts and special deals to its regular and reliable customers. Also, these people often pay for a years travel in advance, giving the TOC the revenue NOW, before taking the journeys. Money now is better than money tomorrow.

 

[RochdalePioneers]

If its back to having railways make a profit then we might as well start closing the lot. Privatisation has vastly increased the cost of doing everything, which in turn has led to the enormous fare and subsidy increases. If they want to cut costs, cut the privatisation structure out. Anyone see this happening?

And the same is coming for the NHS. Lets have every GP buy services for their patients they say. So every GP practice will need lawyers and accountants and administrators to manage the myriad of contracts. As most GPs are GPs rather than lawyers and accountants and administrators then most will contract in service providers. Who will make a profit from this "service"

So yay, another "market" which adds massive cost to something by taking taxpayers money and handing it to a small number of businesses and managers.

 

[Metroland]

I think that's most most unsavoury thing. The structure of the railways, which was devised to add more completion into the industry, whereas in fact, if you look at the history of railways its competition that caused problems from the 1930s onwards, has caused the rises in cost. The railways didn't need breaking up, because there is, and has been for the last 90 years, plenty of competition out there.

Like the banking crisis, it won't be those that at the top that will pay, it will be everyone else through reduction in services, or more cost. (public or private).

In a fair world, the railways would be run for passengers, at a price and service level we want, because that's part of the fabric of the nation.

Instead we have one run to screw as much money out of people as possible, where the bottom line is what makes a profit, not what fits into everyone's need.

I don't especially what to get political about this, but I expect nothing less from a party obsessed with markets, when it's been proven time and time again that system is great for many things, but cannot deliver everything and shifts wealth to the top few percent.

 

[northwichcat]

Have we got the first casualty already? The Birmingham Post is reporting the Cannock Chase line needs a £290,000 subsidy to continue to run at it's current frequency, which the local authorities can't afford so the frequency is likely to be reduced from half-hourly to hourly.

 

[mrcheek]

OK, since you all have a problem with this.

NOBODY HAS SAID THE RAILWAYS HAVE TO MAKE A PROFIT.
THEY'RE MERELY SUGGESTING USING LESS SERVICES ON QUIET ROUTES, AND MORE SERVICES ON BUSY ONES.

 

[Ivo]

Have we got the first casualty already? The Birmingham Post is reporting the Cannock Chase line needs a £290,000 subsidy to continue to run at it's current frequency, which the local authorities can't afford so the frequency is likely to be reduced from half-hourly to hourly.

This has also already been mentioned. Is today duplicate thread/post day, or something?

http://www.railforums.co.uk/showthread.php?t=34880

(Sorry.)

 

[starrymarkb]

I don't have any objections to privatisation per say - I'm pretty much central politally, I just don't think its been done well in the UK. There is too much fragmentation, with all parties requiring seperate safety cases, seperate insurance and such... I'm wondering if anything could be done to improve this situation.

I'm wondering if the continental model where a set of routes are put out to tender for a long fixed period (subject to performance) would work in the UK. I'm thinking along the lines of the German Lander buying their regional services from Metronom or Abellio, or the Dutch tendering local services to Arriva or Veolia.

It also seems to be that there is a very short term view of everything in the UK, some of this is influenced by politics. Policy seems to change on everything depending on what the current media scare is. Polititians just care about the next election result, it would be a very courageous* minister who took a long term view of their department.

*Those who are fans of Yes Minister will understand the meaning of courageous in this situation.

 

[duffman82]

Will they finally get rid of the ellesmere port - helsby service! If they do i'll have to get a couple of rides on it.

 

[merlodlliw]

So surely the WAG will be the first under-used service to fall on it's sword then. The WCML was electrified with splits off to Liverpool and Manchester, and with loops electrified via Northampton, via Birmingham, and via Stoke, so surely the GWML is no worse off?

The WAG EXPRESS subsidy is paid for by WAG, until the next election in May 2011, the current Minister will protect this little used service he wishes to expand. I agree an average of two first class passengers per journey it attracts says it all.

 

[Dennis]

Because every business in the universe gives discounts and special deals to its regular and reliable customers. Also, these people often pay for a years travel in advance, giving the TOC the revenue NOW, before taking the journeys. Money now is better than money tomorrow.

I'm in no way suggesting the end of season tickets - just the opposite. The numbers show a massive number of regular journeys being made at a highly discounted rate and which cause capacity issues.

Increasing season ticket prices by 10% to bring them in line with 'average' fares, which include, so the operators tell us, the very good value and well like AP fares as well as other discounted fares, would bring in an extra £160m per year. This would help the industries finances and possibly have the added benefit of damping down the dreaded peak demand.

Of course, with a rare piece of joined-up thinking, if motoring costs were also raised - which some commentators think is valid to cover their costs to the countries finances and also to assist with climate change obligations, rail revenue might actually increase - all good.

Regarding comments about profits, the rules are simple, TOCs are in the business to make a profit. I've suggested how revenue can be increased but costs must also be reduced - it is not possible to keep on squeezing the taxpayers and farepayers. Anything with the words manager, consultant, study and meeting should be looked at hard. I suspect that is where some really big savings caan be made.

 

[222666]

Agreed. As long as it is still cheaper to buy the season ticket, I think the gap can be closed a little bit. Same with advance tickets, I'd like to think we could do away with the stupidly cheap ones to make regular fares a bit erm, "fairer", but still retain some discount for advanced purchase. Just level it out a bit. I don't think people should be bullied into paying in advance if they're not entirely sure of their travel plans; you can see this on seat reservations with the amount of no-shows.

 

[northwichcat]

The WAG EXPRESS subsidy is paid for by WAG, until the next election in May 2011, the current Minister will protect this little used service he wishes to expand. I agree an average of two first class passengers per journey it attracts says it all.

It's not exactly surprising that FC is lightly used, as there's only one return option per day for FC passengers.

Maybe the answer here is to add in some extra stops. Some of the evening services northbound that aren't the WAG express are marked as 'Seat reservations recommended' so if the WAG express has lots of empty seats in the evening questions need to be asked about the timing and stopping patterns.

The morning run needs to arrive at Crewe 2 minutes earlier or the 07:40 stopper to Shrewsbury needs to be moved 2 minutes later so they officially connect at Crewe and is not stopping at Hereford the right decision?

I'd suggest the evening run needs to stop at Pontypool, Hereford, Leominister, Craven Arms and Church Stretton not to leave a one hour gap between services in the evening peak. I'd also say either the WAG or the Manchester service prior to it needs to do all stops between Shrewsbury and Crewe as there's currently a gap between a 16:26 departure from Shrewsbury and 18:26, which isn't exactly encouraging people to commute by train.

 

[daccer]

This comes back to the same idealogical argument that has been pursued since the 60's - are the railways a service or a business. This has never been decided one way or the other and so we fall into some muddled halfway house where 'profits' and 'revenue' gets mixed in with value for money - two completely different concepts which are not interchangeable. The other issue is that every time we see a change of Govt or we hit hard times the idealogy changes and so we start the whole agonising process over again.

A comprehensive railway network cannot turn a proifit neither can a nationalised health service or a road network. They are services and as such we have to accept they need paying for. The only question now is do we concentrate on the many and focus cash on the busy routes with maybe more affluent season ticket holders and first class passengers or do we do what every democracy should and take care of the less fortunate in our society and those that need the train for its social capabilities.

One small last point - if we are concentrating resources on the busiest routes to better finances and target the mass markets why are we spending millions on DDO compliant facilities. This is not being done because it will provide a return but because it is the right thing to do. Why are rural communities any different? To eliminate on group in society from a needed service is discrimination and it is political machinations that allow them to pick and choose who gets and who doesn't.

 

[The Planner]

The morning run needs to arrive at Crewe 2 minutes earlier or the 07:40 stopper to Shrewsbury needs to be moved 2 minutes later so they officially connect at Crewe and is not stopping at Hereford the right decision?

Crewe = England
Hereford = England

 

[jon0844]

Increasing season ticket prices by 10% to bring them in line with 'average' fares, which include, so the operators tell us, the very good value and well like AP fares as well as other discounted fares, would bring in an extra £160m per year. This would help the industries finances and possibly have the added benefit of damping down the dreaded peak demand.

Of course, with a rare piece of joined-up thinking, if motoring costs were also raised - which some commentators think is valid to cover their costs to the countries finances and also to assist with climate change obligations, rail revenue might actually increase - all good.

This is silly. People pay UP FRONT in most cases to travel for work, which they have no choice about (well, unless you suggest they get another job or quit working entirely). They aren't leisure travellers that travel sometimes and not others, and can simply stay home if fares increase too much.

I have an annual season ticket and it's priced such that I get quite a lot of time 'free', except I don't always use my ticket at weekends (often, I can't due to engineering work) and it doesn't take into account being off sick etc. I don't moan about it, but I'm paying a lot of money for extra freedom that I don't really need (I'd quite possibly accept a further discount and then have a smartcard that allows just two journeys a day to/from work) most of the time.

The TOC gets £3,500+ from me in advance. That's nice, easy, secure money that investors must prefer over fares from leisure travellers who have other options, may not travel in a recession, may use another operator, may use a car and may be very price sensitive.

Now, if you're suggesting raising rail fares and then getting petrol prices up to force people to still use the train then I suggest you're not really caring much about these people who need to use the train for work.

You're now trying to cut numbers by making rail travel something for the rich, in which case why not just axe all standard class fares and make it first class for all?

I can't think of many examples where people paying up front are punished for their loyalty, and don't think the railway industry should become one of them.

I could just as easily suggest something equally stupid; we need all this infrastructure and rolling stock for the peaks, so why not just run peak only services to reduce the need for staff and operation outside of working hours? That would save a fair bit, and now services could be for commuting only. After all, it's the commuters (and first class travellers) who subsidise the off-peak services.

I would also say that we should have a national railcard (even with a fairly high annual fee) to give discounts to people who aren't below 25, elderly, disabled or living in the South East. That way people who travel occasionally, but not just once a year, can benefit from reduced fares - and, once again, there's a pot of money paid up front that can be reinvested in things. I'd even go as far as wanting a smartcard payment system that allows further discounts as you travel more, and more intelligent pricing (doing away with split ticketing as the system can work out the optimum fare before, during and after your journey).

 

[welshdragon]

I think that the main issue for rail users outside of SE England is that we see so much investment there - Crossrail being the clearest example. The vast bill for this project can be found, but not far smaller sums for a number of initiatives (new stock, line doubling, electrification, upgrades etc) across the UK.

So Pacers for Cardiff, SW England and N England for example, whilst SE England has Crossrail, new stock etc.

I am not saying that SE England dos not need it - it does - but I believe that the (very limited) funds could be more equitably spread geographically.

I await the chorus of derision...........

 

[jon0844]

We don't have all the newest trains here you know! I go to/from work on a train made in the 1970s!!

We might have more regular services and more seats, but we do move a rather crazy amount of people around in the peaks.

Now, if we didn't have everyone wanting to work in London then you'd solve a lot of the problems without actually having to spend loads of money.

There's no real reason for me to go into town to sit at a desk every day in my job. I could go in once a week at most, possibly even just a few days every month. However, my employer doesn't share the same view. I am one of thousands that could probably say the exact same thing.

However, when I attended a meeting and heard what TfL was saying about teleworking and reducing passenger numbers and congestion, it was clear that nobody wants to encourage people off the railways, buses and tubes - or even roads. They're all planning on expansion and greater usage, even if most people can see how overcrowded London and the South East already is.

 

[northwichcat]

The think to note about rolling stock is diesel generally has a shorter life expectancy than electric (which most of the SE stock is) so there would little point in spending the amount on refurbishing 1978 stock that Merseyrail spent a few years ago to refurbish 142s or 150s this year, unless you planned to reuse the interiors elsewhere when the trains are written off or keep them in service long after their life expectancy expires.

 

[welshdragon]

I totally accept that not all SE trains are new, but I am sure there are many outside of the South East that would agree that investment outside of the SE would be welcome - and not just in S Wales as I mentioned previously (overcrowding is an issue here too, as well as Bristol, Birmingham, Manchester, Yorkshire etc). In a perfect world (and this isn't one) it would be nice to see some faith in investing in other parts of the UK too (this applies to all economic activity).

Generally SE England has a service on better-quality trains, many more electrified, station facilities (nothing much in S Wales outside of the SWML stations). I accept that the system there moves more people, but just share it around.

 

[jon0844]

Give people some well paid jobs elsewhere and I'm sure people will move! I doubt everyone commuting enjoys it very much. I'm lucky - one train door to door. If I had to change on to the tube, or make multiple changes, I'd go mad.

 

[mrcheek]

Give people some well paid jobs elsewhere and I'm sure people will move! I doubt everyone commuting enjoys it very much. I'm lucky - one train door to door. If I had to change on to the tube, or make multiple changes, I'd go mad.

The trouble is, that you cant move jobs out of London until the infrastructure is improved. And you cant improve the infrastructure unless jobs are moved. And as the southeast becomes more crowded, then the loudest voices for improvements will always come from the southeast.

London's dominance on most areas of British life is pretty much self-perpetuating.

 

[Greenback]

I think that's most most unsavoury thing. The structure of the railways, which was devised to add more completion into the industry, whereas in fact, if you look at the history of railways its competition that caused problems from the 1930s onwards, has caused the rises in cost. The railways didn't need breaking up, because there is, and has been for the last 90 years, plenty of competition out there.

Like the banking crisis, it won't be those that at the top that will pay, it will be everyone else through reduction in services, or more cost. (public or private).

In a fair world, the railways would be run for passengers, at a price and service level we want, because that's part of the fabric of the nation.

Instead we have one run to screw as much money out of people as possible, where the bottom line is what makes a profit, not what fits into everyone's need.

I don't especially what to get political about this, but I expect nothing less from a party obsessed with markets, when it's been proven time and time again that system is great for many things, but cannot deliver everything and shifts wealth to the top few percent.

Well said Metroland, I agreee with everything you have said!

Agreed. As long as it is still cheaper to buy the season ticket, I think the gap can be closed a little bit. Same with advance tickets, I'd like to think we could do away with the stupidly cheap ones to make regular fares a bit erm, "fairer", but still retain some discount for advanced purchase. Just level it out a bit. I don't think people should be bullied into paying in advance if they're not entirely sure of their travel plans; you can see this on seat reservations with the amount of no-shows.

The difference between the cost of most season tickets and the equivalent day tickets is now too much. Frankly it's ridiculous that a weekly season ticket can cost less than two peak time returns. This has come about as a result of the fact that many regulated season fares remained the same some years or even fell as a result of poor performance.

I am not saying that season tickets should be abolished, or should not offer an attractive discount for paying up front. I believe that they should be able to be bought on monthly direct debit (the local rugby has just introduced this for their season tickets!), which will reduce the intiial capital outlay.

My own annual season ticket works out at less than £10 a week. I know that I won't use it every day or even every week, but as a day return is £4.30, I am stills aving money if I use it around 120 times in a year - which is just 24 weeks of five days! Less than six months! I think that is too much of a discount, even though I am the one benefitting!

As a small diversion, I'd rather pay a bit more and get reduced rate travel on off peak trains in Wales and the borders - a Welsh Network Card!

 

[CarterUSM]

The difference between the cost of most season tickets and the equivalent day tickets is now too much. Frankly it's ridiculous that a weekly season ticket can cost less than two peak time returns. This has come about as a result of the fact that many regulated season fares remained the same some years or even fell as a result of poor performance.

I am not saying that season tickets should be abolished, or should not offer an attractive discount for paying up front. I believe that they should be able to be bought on monthly direct debit (the local rugby has just introduced this for their season tickets!), which will reduce the intiial capital outlay.

My own annual season ticket works out at less than £10 a week. I know that I won't use it every day or even every week, but as a day return is £4.30, I am stills aving money if I use it around 120 times in a year - which is just 24 weeks of five days! Less than six months! I think that is too much of a discount, even though I am the one benefitting!

I see what you are saying, but seasons are available to everyone, and i am amazed at the number of people who buy a SDR every week day and not a weekly, monthly or perhaps a yearly season, even when i explain the saving!!

 

[Greenback]

I see what you are saying, but seasons are available to everyone, and i am amazed at the number of people who buy a SDR every week day and not a weekly, monthly or perhaps a yearly season, even when i explain the saving!!

I don't think some people realise just how cheap they can be compared with day returns. Some people may well think you need to travel for at least four days a week over a year to make it worthwhile. Even if you tell them they probably can't believe it if it sounds too good to be true!