How Arriva wanted to develop the Welsh rail network

NEWS that Arriva has withdrawn from the competition for the next Wales and Borders franchise was greeted with enthusiasm by many passengers and at least one Labour MP.

There had already been whisperings of a campaign against awarding Arriva the franchise among passengers who are increasingly fed up with overcrowding and other problems on Arriva’s existing franchise.

However, Arriva’s initial proposals for the existing franchise back in 2002 reveal that the root of many of today’s problems is a decision by the Labour Government, under Tony Blair, not to increase the franchise’s subsidy.

Arriva expected passenger numbers to continue growing and recommended deploying new trains alongside the old ones, resulting in 31% more seats on the Valley Lines.

Instead, Arriva and the other bidders were told to work out how they would make ends meet if subsidy remained unchanged or was reduced by 10% or 20%. The 20% reduction would have left the Coryton line with one train every three hours, while the hourly Maesteg, Ebbw Vale and Llandudno to Manchester services would have run every two hours.

The subsidy reduction options were not pursued. There was a sigh of relief as service cuts were avoided. In hindsight, the 10% and 20% options seemed to have no real purpose other than making the eventual franchise agreement, which has often been dubbed a “no growth” deal, look relatively good.

“No growth” might be a handy shorthand but it’s not an accurate description of the franchise agreement, applying from December 2003 to October 2018. Arriva was allowed to retain some old trains instead of relinquishing them to other franchises, and in December 2005 it implemented a Standard Pattern Timetable, a core feature of its franchise agreement. The overhauled timetable improved productivity, enabling Arriva to provide more services and seats using existing resources.

Passenger numbers continued to grow. The Welsh Government covered the costs of additional 1980s Sprinter units, in effect using its block grant as a substitute for the increased UK Government subsidy Arriva had originally envisaged.

Professor Stuart Cole, of the University of South Wales, has commented that the ad hoc agreements with Arriva for additional capacity would have been more expensive than including the same capacity in the franchise specification, where it would have been subjected to competitive tendering. Further significant gains in available train capacity came from Arriva’s focus on reducing breakdown rates – particularly for the Pacer trains and the long-distance Coradia trains – with Arriva investing some of the franchise profits in engineering equipment and depot improvements.

Not all of the additional capacity was used to lengthen existing trains. Some of it enabled innovations, including the new Ebbw Vale to Cardiff service, extension of ATW services to Birmingham and Manchester airports, several extra trains to Fishguard per day, and hourly commuter services on the Aberystwyth to Shrewsbury line. As the franchise entered its final years, ATW had fewer and fewer options to squeeze more productivity from the fleet and ageing Sprinter and Pacer trains needed time out for repairs to corroded steelwork.

By now ATW is operating about 25% more train services per day and carrying over 60% more passengers than when its franchise began. On a good day, with just a handful of trains undergoing repairs and maintenance, the service can operate punctually and without severe overcrowding, but the operation is on a knife edge.

Recently, the train fleet has suffered seasonal problems, including trains being damaged by trees felled during storms. The anger felt by commuters, or parents whose schoolchildren were left on platforms, is in line with what Arriva anticipated in 2002.

Arriva’s initial proposals in 2002 followed the UK Government’s recognition that Wales should have its own rail franchise. When the National Assembly for Wales was established in 1999, there was one franchise to cover South Wales and south-west England, while Mid and North Wales were linked to large franchises based in Birmingham and Manchester respectively. Three InterCity franchises also served Wales.

The Labour UK Government accepted the Welsh Government should not have to deal with three non-InterCity franchises. It rejected devolution of franchising powers over the new Wales and Borders franchise because several English counties depended on some the franchise’s services.

The franchise competition was managed by the UK Government and its Strategic Rail Authority. The process began with unbridled enthusiasm – one prospective bidder seriously contemplated overnight sleeper trains between North and South Wales – but the bidders’ initial proposals were sober. Arguably the proposals were underwhelming, considering the 15-year franchise term – double the usual length – was supposed to incentivise the operating company to innovate, knowing it would have time to benefit financially before the franchise ended.

Franchise bidding documents, obtained under the Freedom of Information Act, reveal Arriva’s initial proposals included improvements which were delivered through a new timetable in 2005. Arriva also proposed acquisition of new Class 170 Turbostar trains, as used by CrossCountry between Cardiff and Birmingham and London Midland between Shrewsbury and Birmingham.

“We are proposing the acquisition of 22 Class 170 units... and various numbers of units to provide resources for those enhancement options related to the Valley Lines,” said Arriva in its initial proposal. “Although we recognise that the Pacer units will operate satisfactorily until the end of the franchise, we recognise that the authority may wish to consider additional Class 170 units to provide further increases in capacity or to raise the quality and image of the Valley Lines services.

“The initial build [of new trains] would be delivered for service from the summer 2004 timetable.”

Further trains could follow in winter 2004 and summer 2005.

Arriva acknowledged the Welsh Government and local authorities had many plans to improve railways in south-east Wales, including adapting stations and tracks for longer and more frequent trains and introducing new services. Arriva estimated its proposals would provide “31% more seating capacity on the Valley Lines than now... which should provide for between five and 10 years of growth in patronage”.

The additional subsidy which Arriva would have needed is redacted. Consequently, we don’t know how much funding the UK Government decided was not justified by the future needs of the Welsh population and economy, and we can’t compare that funding with the amount the public purse has provided through ad hoc agreements with ATW for additional capacity.

Arriva predicted: “Non-monetised benefits will arise from improved journey ambience and from increased levels of economic activity and the associated job creation.”