DfT has “too much of a role” in running the railways
The Department for Transport is too involved in running the railways, according to Transport Secretary Chris Grayling.
Speaking at the Transport Select Committee hearing on July 24, Grayling said he supported the concept of longer franchises, but added: “I do think the situation is too complicated. I think the Department for Transport has too much of a role now in running the railways when it comes to, for example, areas where we participate in the investment, like the specification of trains.”
He also criticised the railway’s contractual structure, pointing out that one of the potential benefits of a partnership approach (such as that planned for the East Coast Main Line) could be reduced friction between infrastructure and operations.
“Today’s industry is too contractualised. If you need a possession, Network Rail pays a compensation payment to a train operator under a certain formula. When you get stories in the media saying ‘x hundreds of millions of pounds was paid in compensation and only a small proportion of that went to the passenger’, that’s because you have this financial merry-go-round within the industry to compensate for possessions.
“I’d much rather have a team saying ‘let’s do this because that will mitigate the impact on the passengers, keep the service flowing as well as possible, and keep revenues up’, rather than people worrying about who’s going to pay what compensation to who.”
Warming to his theme, Grayling continued: “I would like to get to a position where a joint decision is taken without worrying about contractual mechanisms. Exactly how we do that is to be worked through, but if you’ve clearly got somebody who’s in charge of both the track and the train operations it becomes easier to plan in a way that works best for passengers and minimises the financial impact.
“There is a loss of revenue that comes from an investment project which inevitably has to be costed into the business case for that investment project - that’s always going to be the case. But it could probably be done in a less contractualised way in a more joined-up railway.”
However, Grayling moved to reassure open access and freight operators who may have concerns about favouritism by the new operator of its own trains: “Protecting the interests of freight and open access operators by maintaining proper regulatory structures to ensure there’s no unfair competition is absolutely essential - but that’s true anywhere.”