Scotland’s new railway

Amongst many other improvements, the next ScotRail franchise is to have faster more comfortable trains connecting its seven cities with scenic trains on tourist routes.

This much has been widely reported but perhaps the big story is why the Scottish Government wants to pay more for rail quality improvements.

With the current ScotRail franchise worth £2.5 billion over its 10 year term, specified improvements could increase the annual bill for Scotland’s railways by tens of millions.

On 19th November plans for the new franchise, starting in April 2015, were unveiled as tender documents were made public. Transport Minister Keith Brown advised that as well as improving passenger experience, the franchise specification is ‘focused on innovation, connectivity, value and benefit for communities throughout Scotland.’

Draft document

A trawl through the 174 page draft Invitation to Tender (ITT) document reveals much detail to support Brown’s statement. The ITT is a draft document to allow bidders to suggest improvements before it is finalised in 2014. Issuing such draft documents was a recommendation in the Brown report on rail franchising.

Passenger experience is an important objective for the franchise. Failure to meet passenger satisfaction targets results in a fine of 10% of annual profits. If this happens two years running the franchise may be terminated.

Another measure is “minutes per train mile” which is currently 1.175 for long distance inter-city journeys. As this is considered to be too slow, bidders are required to propose improvements which will become contractual conditions.

Rolling stock

The ITT contains a detailed specification for rolling stock, all of which must have Wi-Fi. For inter-city stock this includes the need for a ‘passenger environment consistent with modern inter-city passenger stock in UK and Europe; seats to be aligned with windows, large luggage areas within sight, cycle storage and flexible pram space.’

As the current class 170 DMUs do not meet this requirement, new or refurbished rolling stock will be required. It is possible that the specification of additional storage areas may result in more coaches.

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Photo: shutterstock.com

The ITT reflects the findings of an extensive rail consultation exercise undertaken by Transport Scotland in 2012 from which it became clear that the current class 170s were not considered suitable for long distance journeys especially when compared with a journey to Aberdeen on East Coast Mark 3 coaches.

The ITT’s specification for scenic train initiatives is intended to support local communities as well as providing better views for passengers. This is shown by the need “to work with local partners to develop their tourist services” and that catering facilities should serve local/Scottish produce.

Community Rail Partnerships (CRP) will also support local businesses. These champion initiatives to maximise potential benefits of the location, its rail line and stations. By the start of the franchise, the Scottish Government expects to establish ten such partnerships.

The ITT requires the franchisee to actively support CRPs, spend £0.5 million annually on them and consider creating new ones. Small businesses should also benefit from the requirement for the Franchisee to make their sub-contracts available to smaller companies.

Cycle innovation plan

Innovation is mentioned throughout the ITT, for example the requirement to “operate a quality, efficient rail passenger service which is also considered by the industry to be at the leading edge of innovation”. An innovative approach will be needed to provide Wi-Fi connectivity on long remote rural lines with poor mobile reception.

Bidders are also required to submit a Cycle Innovation Plan to convey more bicycles to destinations offering cycle rides and for rail to give Scotland’s residents and visitors a greater cycle service. For passengers requiring assistance, there is a need for innovative technology to minimise advance notice of travel.

Value for money is another phrase mentioned throughout the ITT, with bidders encouraged to submit plans to reduce the subsidy requirement. As the Scottish Government considers there are cost savings from rail industry collaboration, bidders are invited to submit proposals for close working relationships with Network Rail and other rail industry partners. Better value is also required for passengers. The ITT caps peak fares at inflation and off-peak fares at inflation minus 1%. The franchisee is also required to promote flexipass tickets that give discounts to regular passengers who do not travel daily.

Integration with other transport modes was another concern highlighted by the rail consultation exercise. The ITT addresses this by requiring the Franchisee to have a Transport Integration Manager who must ensure that rail plays its part in a cohesive public transport service.

This includes cross-modal smartcard ticketing being used for most rail journeys by 2019, providing information on other transport modes at key stations and ensuring that timetables are integrated with buses and ferries. Not forgotten is the requirement to improve timetabled rail connections.

Capacity targets

With sustainability being a key aspect of the Scottish Government’s agenda it is no surprise to see it featured in the ITT. This requires proposals to reduce environmental impact and targets to reduce energy use, CO2 emissions and waste.

To make better use of capacity, bidders must submit targets, increase patronage on lightly used lines and off-peak services. Failure to meet such targets three years running may result in termination of the franchise. Investing in the workforce is also specified. This includes taking on at least 100 apprentices during the franchise.

The new franchise covers a period of significant change. The Borders railway opens a few months after it starts. December 2016, 20 months into the franchise, will see the first electric trains between Edinburgh and Glasgow which the franchisee has to procure.

Almost certainly these will be new trains. Although this is a demanding procurement timescale, Transport Scotland has produced a detailed specification for these trains which has already been made available to bidders.

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An interesting part of the ITT is the priced options which require bidders to price for plans that are not yet fully developed. These include options for a new station at Winchburgh and improved services between Edinburgh and Berwick-upon-Tweed / Newcastle with new stations at Reston and East Linton.

The option for an improved train service to Stranraer should reassure residents who fear a rail closure following the loss of their ferries. Bidding for the ScotRail franchise are First Group (the current holders), Abellio, Arriva, National Express and MTR. Their tender returns must include delivery plans demonstrating their ability to provide the service and respond to change including the provision of rolling stock. Any bid that cannot will be rejected.

A quality score will be given to delivery plans that concern enhancements. Once bids have been confirmed as financially robust, the lowest bidder gets a 100% price score and other bidders are given a score related to this lowest price. When bids are evaluated the quality score is given a weighting out of 35%.

Transport Scotland considers that this is the first time that a rail franchise competition has had such a heavy emphasis on quality. As Keith Brown says, ‘Bidders for this franchise must commit to ambitious improvements if they want to win.’

So why does the Scotland Government want to pay more for a quality railway? Currently the total cost of its rail services is around £900 million annually, much of which is fixed costs. Transport Scotland considers that the resultant economic benefit will far outweigh the additional rail quality costs.

The Scottish Government has a stated purpose of creating a more successful country for all through increasing sustainable economic growth. Its rail franchise ITT is a means to this end. It also demonstrates the benefits of joined-up Government from which there are, no doubt, lessons to be learned south of the border.

Report by David Shirres

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