INFORMED SOURCES e-Preview May 2010.
For readers who were growing up in the 1970s, or were parents then, the first two pages of the May Informed Sources are going to be a retro blast. I won’t spoil the surprise but look out for some stunning graphics as I bring a new twist to comparing traction and rolling stock options.
IEP – credible alternatives lining up
DfT Rail’s rolling stock profligacy
Cost cutting – phony war until after the election
Open access operators under fire
These options are the ‘credible alternatives to the Intercity Express Programme (IEP) being considered by Sir Andrew Foster and his supporting experts, Prof Andrew McNaughton and Ross Spicer. Transport Secretary Lord Adonis announced in February (Informed Sources April) that he had asked Sir Andrew to provide an independent assessment of the value for money of the IEP and most importantly ‘the credibility and the value for money of any alternatives which meet the Programme's objectives’.
Value for money implies making the best use of what we have got and one way to do this is combine selective investment in new traction with existing coaching stock. IEP was really all about the Great Western Main Line electrification and a new high power 200km/h electric locomotive, like the Bombardier TRAXX for example, would cut costs by retaining the existing rolling stock, suitably refurbished.
The simplest solution would be to replace one power car of an IC125 with the electric loco and use the other power car as a Driving Unit. If you needed to go a short distance beyond the wires, the diesel power car would also provide a limited bi-mode capability.
But an electric loco could also haul a rake of Mk 3 coaches with a passenger carrying Driving Trailer at the other end. If capacity becomes an issue my Chinese chums at
So with electric locomotive haulage on an electrified GWML and cascaded Class 319s EMUs on the Paddington suburban services, the only outstanding requirement is the West of England route which IEP would have served with bi-modes. Here the obvious value for money medium term solution is life extended IC125s.
East Coast
DfT Rail’s ‘East Coast
This menagerie had all the signs of a desperate attempt to find applications for an early build of IEP. And while the capacity and improved performance under the wires of the re-specified 4MW electric/2MW diesel IEP might make better use of paths it would be expensively bought capacity. If you still need to improve performance on the East Coast, the TRAXX plus Mk 3 or TRAXX/125 hybrid would have similar impact.
This idea is not new. For testing Class 91s replaced one power car of an IC125. With both ends working it didn’t half go!
Bi-mode
If electrification goes ahead as planned bi-mode capability might be needed. But by and large the IEP bi-modes have less urge than a ‘Deltic + eight’ and cost a lot.
So if we do need a Bi-mode it has to have serious muscle in both modes and be affordable. Eversholt and Bombardier have been working on a Credible Alternative based on the Class 222 with either a new pantograph/transformer car or one diesel engine raft in a five car unit replaced with a transformer.
All the Class 22X variants have electric transmission. So a bi-mode version running under the wires would have full traction performance.
Sir Andrew Foster’s Review could set traction and rolling stock policy for next two decades. As my article shows, he has a wide range of cost-effective credible alternatives from which to choose. And while DfT Rail believes that Sir Andrew is variously ‘checking their sums’ or ‘rubber stamping’ IEP, I believe it can be trumped
Throwing away money
Last month I mentioned that when industry’ bidding costs were added to DfT Rail’s consultancy fees, IEP was heading towards £60 million. This was a preview of some analytical work I have been doing based on DfT Rail’s expenditure as detailed in Parliamentary written answers.
This study looked at three procurement exercises – IEP, Thameslink and the 202 DMU vehicles – plus DfT Rail’s complaint against the Rolling Stock Companies which eventually ended with the Commission criticising the Department instead of the ROSCOs. Total cost of DfT Rail consultancy to date is £41 million.
This excludes the costs incurred by the Office of Rail Regulation, and the Competition Commission over the ROSCO complaint. I have Freedom of Information requests in for these costs.
But when DfT Rail does something involving consultants, other people have to spend similar sums responding. This can be submitting bids for exotic trains or providing information or the Competition Commission. I estimate that the four exercises have cost industry over £100 million. Pending the FOI answers the running total is £145 million pounds.
Of course, the taxi-meter for the Thameslink train fleet procurement is still ticking away. With the preferred bidder expected to be selected in July and the deal signed in December, there are still some millions to be burnt.
Crossrail
What this analysis tells us is that buying brand new trains to unique specifications wastes money. And unless something is done to stop it, and soon, Crossrail will be throwing more millions on this bonfire of the vanities.
In a rational world the rolling stock solution for Crossrail would be a repeat order for more Thameslink trains, with some substantial discounts for quantity. But the current message from what a chum at Network Rail called the Independent Republic of Crossrail is that ‘whoever gets Thameslink shouldn’t assume we’re going to buy the same train’.
Time for someone to get a grip. But don’t hold your breath, nothing tickles a railwayman’s vanity more than buying your very own unique train. IEP refers.
McNulty review under way
There were some interesting reports following the first workshop held on 4 March to introduce Sir Roy McNulty and his Value for Money Review team to the railway industry. The day before, Sir Roy’s Number two had emphasised that the focus would be on whole industry issues.
But next day DfT Director General National Networks Mike Mitchell and ORR Chief Executive Bill Emery appear to have decided that the need for the McNulty Review might not be fully appreciated by the delegates and painted an apocalyptic vision of a financially broken backed railway by 2020 if things were allowed to continue in the same old way.
This was where DfT got a bit cheeky by focusing on the interest on Network Rail’s growing debt, eating up Government funding. Reports of £4.5 billion debt interest by 2020 were clearly a misunderstanding because that would imply debts of around £90 billion compared with a predicted £31.5 billion by 2014.
But, a back-check through my Periodic Review spreadsheets revealed where Dr Mike and Bill Emery were really coming from. If you combine the allowed return on Network Rail’s Regulatory Asset Base (RAB) – which pays the return on borrowing, with amortisation – which pays for renewals, then by the end of CP4 in March 2014 the total is £3.3 billion a year out of Network Rail’s revenue of £5.3 billion.
Another £10 billion on the RAB in CP5 could push this combined figure up to £4billion by 2020. Which is where the cheekiness comes in. Because Network Rail’s borrowing and what goes on the RAB – also known as the ‘Network Rail credit card’, is determined by - DfT Rail and the ORR!
For example, remember the £50 million for stations announced by Lord Adonis? Is it new money? No, it’s going on the credit card.
Similarly the new electrification schemes. Network Rail will borrow in Control Periods 5 and 6, stick it on the RAB and the Regulator includes the return in subsequent Periodic Reviews.
Projecting the rising total of return plus amortisation through the next control period and keeping Network Rail’s revenue constant at around £5.3 billion a year, the money available for maintenance and operations shrinks to £1.6 billion compared with £2.3 billion this year (2009-10)
And while Network Rail’s funding is assured for the current Control Period the general view in the industry is that the settlement for CP5 is going to be very grim indeed. Hence the doom and gloom at the workshop.
Post election I expect DfT Rail to revisit the High Level Output Specification and the Statement of Funds Available published in 2007 and see where there is money outside the Regulatory Settlement which can be cut. The 1300 additional vehicles seems a likely starting point.
Death to open access
Reading through all the DfT Rail submissions in its misguided campaign to reclaim £100 million in super-profits from the ROSCOs I became aware of a vindictive tone that grew increasingly shrill as the process dragged on. And the same hand seems to have been behind a letter from Junior Transport Minister Chris Mole replying to correspondence from Conservative shadow Transport Spokesman Stephen Hammond on the subject of Open Access Operators (OAO).
Clearly Mr Hammond had suggested that OAOs and competition were a good thing: Mr Mole puts him right.
While not quite the spawn of the devil, the presence of the OAOs mean that it has not been possible for Leeds, York and Newcastle, ‘despite the best efforts of the successive Train Operating Companies, to enjoy the sort of improvements brought to Birmingham, Manchester and Liverpool by the VHF timetable on the West Coast Main line.
This triggered my ‘specious argument’ alert, since London-York travellers have to put up with a pitiful 100mile/h fastest average speed while on the OAO-free WCML London-Manchester is covered at a staggering 94 mile/h. And so on.
But the meat of the letter is an extended rant exposing how OAOs are a ‘drains’ on the funds available to the Transport Secretary. Not only don’t they pay premiums, they are blatant ORCATs raiders, pretending to serve niche markets while all the time basing their business plans on taking ‘substantial shares of the revenue from flows such as York and Doncaster to London’.
How do they offer cheap fares? By ‘clearly taking advantage of the fact that they do not pay fixed access charges to Network Rail and that they do not pass any proportion of their fare-box income to government to support the enhancement of the network or the subsidies to the regional operators’.
A farrago of false arguments. And if you are a freight operator, very worrying.
Roger’s blog
Last week, the Infrarail Exhibition at Birmingham was as interesting as ever, providing material for future columns plus the chance to meet a large number of Informed Sources, put faces to names and make new acquaintances. The big news, for me at least, is that Network Rail’s modular signalling, a concept I had difficulty understanding at first, has now got real momentum.
Invensys is extremely enthusiastic, based on the company’s Westrace interlocking. A chum on the stand even took me to a couple of exhibitors to show me the sort of new kit that forms the building blocks of their new modular approach.
With the inquest into the Potters Bar derailment opening in the first week in June (conveniently for me in Letchworth) I couldn’t help noticing how many fastener manufacturers were showing locking nuts in switch and crossing sizes on their stands. But one innovative design is still waiting for a test site 15 months after a pilot application was agreed with Network Rail.
This coming week I am the guest speaker at the Crewe Dinner but after that things have gone quiet as we wait for the results of the general election. This should give me some time for analysis.
For example, it will be interesting to see what happens to the HLOS 1300 vehicles, where Government ministers have been saying ‘of course they will be ordered’, when we all know that time and money has run out. I suspect that we will see an outbreak of realism from the new administration.
But, of course, this is not the first time that I have predicted a quiet month ahead only for an invitation to a press briefing to start a new hare running. I suspect that the lead item this month, on credible alternatives to IEP, may result in some invitations to be more fully briefed – or put straight.
Now for that speech.
Roger