1.  INTRODUCTION

  1.1  I am Neil Scales, the Chief Executive and Director General of Merseytravel. Merseytravel is the operating name for Merseyside Passenger Transport Executive and Passenger Transport Authority and co-ordinates public transport on Merseyside.

2.  BACKGROUND

  2.1  I am giving evidence on behalf of Merseytravel. Merseytravel is a consignatory with the SSRA in the Franchise Agreements covering the Merseyrail Electrics franchise and part of the First North Western franchise operating in Merseyside.

  2.2  Merseyrail Electrics operates as a self-contained third-rail electrified network centred on the Liverpool Underground Loop and Link which was constructed in the 1970s. Merseyrail Electrics operate the Northern and Wirral Lines of the Merseyrail network. The network contains 66 stations and operates 3.7 million train miles per annum, carrying 28.9 million passengers a year. Currently, despite poor performance, passengers are growing at a rate of 6 per cent per annum. The First North Western franchise operates the Merseyrail City Line which provides the local services in and out of Liverpool Lime Street to 26 stations on the Merseytravel supported network and to cross-boundary destinations such as Wigan, Preston, Manchester Victoria, Warrington Bank Quay, Warrington Central and Manchester Airport. First North Western Merseytravel-supported services, carry 4.8 million passengers per annum. The City Line is subject to rapid growth in patronage: the most recent figures indicate over 13 per cent growth per annum. This is due in part to consistently good service performance by First North Western in delivering Merseyside services (service delivery across the First North Western franchise as a whole has been less consistent) and Merseytravel's' development policies on regular service frequencies, new services and investment in the line. Two new stations at Wavertree Technology Park and Lea Green opened recently with Merseytravel and Objective One funding. The Merseyrail Northern, Wirral and City Lines, despite the existence of different operators are marketed and branded as the Merseyrail network serving Merseyside with local identity, fares and ticketing structures reflecting the PTEs policies.

  2.3  Merseytravel is a funder of the network through the two Franchise Agreements with Merseyrail Electrics and First North Western but also has continually invested heavily in the modernisation, enhancement and extension of the network. Before franchising Merseytravel sponsored several third-rail electrification extensions (more recently to Chester and Ellesmere Port) new stations, station revitalisations, interchange and park and ride developments. Merseytravel has continued to invest through improvements specified under the new franchises (CCTV, telephones and help points) and also through directly funded schemes usually project-managed by Railtrack. Recent schemes have included new stations at Brunswick, Conway Park, Wavertree Technology Park and Lea Green, station revitalisation and access improvements at Kirkdale, Old Roan and Aintree interchange and park and ride developments at Aintree, Maghull, St Helens Junction and Wallasey Grove Road on the Wirral. Merseytravel has taken the view that, despite the difficulties presented by the new railway structure, the needs of Merseyside regeneration and the passenger should be protected and enhanced. Merseytravel has therefore worked closely with the rail industry to overcome these difficulties and master the new processes, procedures, contractual arrangements and funding mechanisms involved in the railway industry of today.

  2.4  Merseytravel has promoted partnership both within the railway industry and with outside parties such as the five District Councils, adjacent Shire and Unitary Authorities, regeneration agencies such as the Merseyside Development Corporation, City Challenge and Regional Challenge Initiatives, Single Regeneration Budget programmes and European Regional Development Fund programmes.

  2.5  Merseytravel works closely with partners in the region. Merseytravel recently led a study into the transport linkages across the Mersey Belt and has been a major player in the Transpennine Rail Group which comprises PTEs, Shire Counties, Unitary Authorities, Railtrack, three train operating companies and the Peak District National Park Authority and has campaigned for the development of Transpennine rail links. Merseytravel also works to develop close links with unsupported train operators that run services in and out of Merseyside: Virgin West Coast and Cross Country, Northern Spirit, Central Trains and Wales and West. Merseytravel is party to various groups such as West Coast 250 and Transpennine Rail Group.

  2.6  Merseytravel has been very disappointed in the sustained fall in service performance on Merseyrail Electrics over the last year. This is discussed further later in this paper. It is worth noting that a largely self-contained single operator network such as Merseyrail Electrics should operate to the levels of performance specified in the local Merseyrail Passengers Charter: 99 per cent of trains run and 95 per cent of trains running within five minutes of right time. Sadly 1999-2000 results were 98.35 per cent and 90.62 per cent respectively.

  2.7  Merseytravel has recently been designated a Centre of Excellence for Integrated Public Transport by Lord McDonald. Merseytravel and the five Districts in July submitted the Merseyside Local Transport Plan with the following four key objectives:—

(1)  To ensure that transport supports sustainable economic development and regeneration.

(2)  To moderate the upward trend in car use and secure a shift to more sustainable forms of transport such as walking, cycling and public transport.

(3)  To secure the most efficient and effective use of the existing transport network.

(4)  To enhance the quality of life of those who live, work in, and visit Merseyside.

3.  RAILTRACK'S PAST PERFORMANCE IN REVIEWING MAINTAINING AND DEVELOPING THE NATIONAL RAIL NETWORK

  3.1  Merseytravel, under the 1968 Transport Act Section 20 funding arrangements, had a very close role in the operation, monitoring, maintenance, renewal and development of the rail network. A high level of joint working and partnership existed between Merseytravel and Regional Railways including a joint management body involving Merseytravel. This enabled Merseytravel to understand the issues and problems facing the railway network on Merseyside, especially, Merseyrail Electrics with its current performance problems. Merseytravel always sought to maintain maintenance and renewal expenditure under the old Section 20 arrangements and financed a substantial proportion of the Merseyrail Electrics resignalling and establishment of a new integrated control centre for the Merseyrail Electrics Northern and Wirral Lines.

  3.2  It is a great frustration that despite some evidence of improvement during 1998 and early 1999, performance on Merseyrail Electrics has slumped badly and is missing Merseytravel standards by a substantial margin. In 1999-2000, the reliability of Merseyrail Electrics services improved marginally from 98.23 per cent to 98.35 per cent but punctuality suffered a serious deterioration from 94.6 per cent to 90.6 per cent. In terms of 1999-2000, Railtrack were responsible for 13.2 per cent of cancellations, 25.6 per cent of part-cancellations and 39.1 per cent of delays. During the course of the franchise, poor performance can be attributed to the following headings that are within the responsibility of Railtrack:

—  impact of water on track and signalling in the underground;

—  signalling and track circuit failures;

—  engineering overruns;

—  poor maintenance and renewal standards (including broken rails and conductor rail incidents);

—  wheelwear adhesion problems during the autumn leaf fall season;

—  ice formation on the third-rail;

—  external factors such as trespass and vandalism and lineside fires.

  3.3  Before the commencement of the franchise, the most profound influence on the operation of the Merseyrail Electrics network was the impact of the rising water-table following the closure of water-extractive industries in Liverpool. This has caused sustained contamination and short-circuiting out of track circuits and electrolytic corrosion on trackwork as a result of the action of stray third-rail current in a damp environment. This led to emergency action to replace rails in the Wirral Line Loop on a number of occasions: the most serious in 1995 when the Wirral Loop was closed for six weeks for rerailing. Railtrack inherited this problem on taking over as infrastructure owner and have addressed the problem with a comprehensive drainage scheme of boreholes set at intervals round the Wirral Loop continuously pumping out so as to lower the water-table—in effect pumping the centre of Liverpool dry. This has successfully addressed the problem of water penetration.

  3.4  The symptoms were also addressed before the creation of Railtrack with the specification of axle counters as a replacement for electric track circuits and this policy has been developed further by Railtrack to complement the drainage scheme. Most areas of the Wirral Loop are now covered by axle counters. Drainage in areas under Birkenhead including Green Lane can, however, still be problematical.

  3.5  Merseytravel has serious concerns about the standards of maintenance and renewals on the Merseyrail Electrics network. While the signalling and track circuit failures have diminished through resignalling, drainage and axle counter works, it is considered that basic maintenance and renewal is not delivered to the quality that would be expected, this has a major impact on performance. Recent performance has underlined the impact of poor quality renewals, engineering overruns due probably to poor planning and resourcing, poor conductor rail installation, broken rails and other issues. Merseytravel is not in a position to comment on the performance of the Railtrack supervision or standards set or the performance of the current track contractor (Jarvis) only on the outputs and causation attached to the outputs. Merseytravel trusts that the tendering of the new ICM 2000 infrastructure contract for the area will deliver an improvement in standards and culture of maintenance and renewals in the future.

  3.6  A particular problem that has occurred periodically on Merseyrail Electrics is the excessive wheelwear on the Class 507/8 units that operate all passenger services. It is known that the units are not ideally suited to the network as they have relatively stiff bogies that do not adapt well to the tight curvature present in a number of locations on the network, in particular the Wirral Loop. Wheelwear has been experienced at serious levels in both 1999 (late July through to early September) and 2000 (late May to early June). In 1999 18 units of the 53 unit fleet had to be taken out of service and in 2000, 12 units. The impact of the wheel/rail interface on the tight curves has long been ameliorated by the 125 track lubricators that pump grease onto the curves to ease friction and wear. This has generally contained wheelwear at reasonable levels for many years but with the occasional serious performance out break. Recent events in 1999 and 2000 have seriously inconvenienced passengers with widespread short formations of six car trains and also cancellations of trains. This has led to contractual "call-ins" by the SSRA served on Merseyrail Electrics due to the failure to maintain performance under the Franchise Agreement. The first joint Railtrack/Merseyrail Electrics consultancy study in 1999 failed to identify specific causes but a second study this year has pinpointed the operation of the 125 track lubricators as being the significant factor. The study sees the network of lubricators as operating on a "knife edge" occasionally dipping below the standards required overall to contain levels of wheelwear. The current system relies on old technology, conventional maintenance (rather than modular rotational maintenance) techniques backed up with insufficient documentation and performance monitoring. These issues are now being addressed by Railtrack and the network contractor. A recommendation has been tabled for the installation of on-train lubricators (previously taken off by Merseyrail Electrics). Merseytravel is concerned that all the parties—Railtrack, the Railtrack maintenance contractor and Merseyrail Electrics have not pulled together to identify the problem over time and seek a solution to a major performance risk to Merseyrail Electrics services.

  3.7  A long-standing problem across the network has been the annual leaf-fall season and the impact on punctuality. The Merseyrail Electrics network has been relying on sandite application by ageing multiple units and a Class 73 electro-diesel locomotive in recent years; all with poor reliability and performance. Increased co-operation between Railtrack and Franchise Operators has developed in recent years was helped to identify problem locations which can then be treated with sandite. Also, Railtrack have been more inventive with leaf nets and other measures. However the two key actions appear to be tree lopping and clearance of cuttings and sanding of the track. Monitoring of outputs indicates that Railtrack's tree clearance and trimming programme is not sufficient to protect and improve on autumnal performance. The delays in the national programme of introduction of Multi-Purpose Vehicles to undertake sanding duties (and on the Merseyrail Electrics third-rail network de-icing of the third-rail) is a major concern. On the combined First North Western and Merseyrail Electrics networks, track clearance and reliability issues appear to have prevented deployment this autumn. Additionally, the failure of Railtrack to address the introduction of safety features in terms of the underground tripcock systems (similar to TPWS) in the basic design despite advance warning from Merseyrail Electrics is a further concern. This deprives the Merseyrail Electrics network of Multi-Purpose Vehicle operation and threatens Merseyrail Electrics performance during the autumn leaf-fall and winter icing of the third-rail.

  3.8  Merseytravel has, in recent years, worked closely with Railtrack, Merseyrail Electrics and First North Western in the delivery of Merseytravel sponsored projects as well as liaison on station regeneration programmes and major Railtrack renewals. Merseytravel's comments are:—

—  Railtrack performance in delivery of Merseytravel sponsored schemes is adequate although they need to appreciate the need to action early feasibility work to meet European Grant and other deadlines. Merseytravel have a major contractual claim on the work at one of the new stations recently opened, this has been tabled by the contractor on the management contractor working for Railtrack and is proving difficult to resolve.

—  General liaison has improved on network issues under pressure from the Rail Regulator and Merseytravel.

—  Dialogue on the Railtrack Station Regeneration Programme has ranged from good to poor: there is a concern that limited specifications and poor standards of work limit the effectiveness of the programme. The programme leaves many stations with renewal work outstanding due to downsizing of the programme and gaps in the facilities necessary for provision of a consistent standard of facilities for passengers.

—  Railtrack's record on liaison with franchise operators and funders on major renewals is poor on Merseyside. For example, development and delivery work on various renewal projects at Liverpool Lime Street Main Line Station has included failures to consult even with the station facility operator, failure to offer the opportunity for enhancements to the franchise operators and funders, lack of thorough review of scheme options to the detriment of passenger outputs and, of more concern, failure to provide single leadership over all the Lime Street projects and lack of liaison between business sponsors within Railtrack on co-ordinated specifications and programmes.

—  Insufficient resourcing and lack of experience on the business development and management side of projects in part due to rapid turnover of staff and use of temporary staff. This needs to be addressed as a matter of urgency. In the North West Zone, Railtrack have had three Zone Directors in the last three years.

—  Property and commercial development liaison has improved recently and is at a satisfactory level.

—  Railtrack are insufficiently aware and inadequately funded to provide matched funding for PTE and other partnership schemes reflecting Railtrack's responsibilities for renewal.

  3.9  Merseytravel is currently reviewing and addressing the implications of the Disability Discrimination Act: it is imperative that a way forward to allocating funding and responsibility for delivery of systemwide upgrades is identified by the SSRA and Rail Regulator.

  3.10  Other issues of development are:—

(a)  the lack of provision of capacity for non-Virgin passenger and freight operators in the West Coast Main Line upgrade;

(b)  the lack of renewal and capacity enhancements on the Liverpool branch of the West Coast Main Line despite existing capacity constraints between Lime Street Station and Wavertree and between Warrington and Preston;

(c)  failure of Railtrack to consult sufficiently on renewal work to allow modernisation of the layout to meet future needs (eg Ditton on the Liverpool branch of the West Coast Main Line where a major interlocking had deteriorated to such an extent that urgent renewal was essential);

(d)  lack of sufficient capacity even for existing services in the Manchester South resignalling scheme;

(e)  slow railway vehicle acceptance procedures;

(f)  failure to address network-wide loading gauge enhancement for freight development;

(g)  lack of priority given to capacity enhancement on the North and South Transpennine routes including the Manchester Hub and Liverpool and Mersey Belt routes linking Liverpool and Manchester.

4.  ADEQUACY OF THE OVERSIGHT EXERCISED IN THE PAST BY THE OFFICE OF THE RAIL REGULATOR OF RAILTRACK'S PERFORMANCE, ITS CONTRIBUTION TO THE DEVELOPMENT OF RAILTRACK'S FUTURE PLANS WITH PARTICULAR REFERENCE TO THE REVIEW OF TRACK ACCESS CHARGES AND MEANS BY WHICH THE OFFICE OF THE RAIL REGULATOR INTENDS TO ENSURE THAT RAILTRACK IN FUTURE HONOURS ITS COMMITMENTS

  4.1  Merseytravel supports the firm but fair line taken in the Rail Regulator's relationship with Railtrack and welcomes the development of a more robust approach since the appointment of Tom Winsor as Rail Regulator.

  4.2  The Rail Regulator's review of access charges is crucial to the future maintenance renewal and development of the rail network. Railtrack's core duties focus on the efficient and safe maintenance and renewal of the network. The monitoring of key performance indicators (such as broken rails and punctuality) in this respect is essential and should be extended. Recent events at Hatfield on East Coast Main Line underline the importance of the performance of Railtrack and their contractors in the inspection, management, maintenance and renewal of infrastructure of all types but especially track and signalling. It is imperative that Railtrack receive the proper level of access charges to allow these duties to be funded and allow improvement in indicator performance and safety. The DETR Spending Review provides for a substantial increase in capital and revenue expenditure: it is essential that the revenue stream allows for the improvements in maintenance and renewal levels necessary and this is fully resourced through the Rail Regulator's Access Charge review and through SRA resources paid through the franchise operators to Railtrack.

  4.3  It is also imperative that Railtrack is sufficiently funded and incentivised to undertake its core duties and invest in the enhancement of capacity and route performance for the future. There is a very real concern among the PTEs that the access charge review may act against the current role and future development of the metropolitan railway and the wider social railway in favour of the better funded commercial railway. The attention of the Sub-committee is drawn to decisions by Railtrack and the SSRA on West Coast Main Line modernisation and Manchester South resignalling which has squeezed the operations of the smaller less well-funded operators in favour of Virgin Trains in particular. Access charges need to be framed to reflect the needs of the LTPs and the Government's 10 Year Transport Plan so as to allow these metropolitan railway operations to continue and develop in terms of capacity, frequency and clock-face timetables.

  4.3  Merseytravel welcomes the Rail Regulator's line on enforcement in terms of punctuality and broken rails.

  4.4  The revisions of Railtrack's Network License on Railtrack land holdings and treatment of dependant parties are strongly welcomed.

5.  WHAT ROLE SHOULD BE PLAYED BY THE (CURRENTLY SHADOW) STRATEGIC RAIL AUTHORITY IN THE RENEWAL, MAINTENANCE AND DEVELOPMENT OF THE RAIL NETWORK, BOTH DIRECTLY AND BY SECURING INVESTMENT FROM SOURCES OTHER THAN RAILTRACK, INCLUDING FROM TRAIN OPERATING COMPANIES THROUGH THE FRANCHISE REPLACEMENT PROCESS, ADDITIONALLY, WHAT CRITERIA THE AUTHORITY IS USING TO DECIDE ON THE REPLACEMENT OF FRANCHISES

  5.1  The first round of franchising was undertaken on the basis of cost minimisation by OPRAF. Merseytravel, as part of the process sought to achieve wider value for money criteria with investment in passenger information systems, public telephones, security features and improved station facilities. While significant gains were made in terms of Merseytravel's objectives for the Merseyrail network, the first round of franchising was a missed opportunity: the lack of development of the prestige North Transpennine route by Northern Spirit, despite its commercial potential and proven growth record is indicative of this. It also underlines the need to ensure that a progressive and well-financed franchisees are secured in this round of franchise replacement.

  5.2  One of the major failures of the first round of franchising was the lack of recognition of railway growth potential and lack of confidence in the industry to expand its role. The franchise replacement process must deliver at least track capacity enhancement, service development, new rolling stock, enhancements to station facilities, compliance with the Disability Discrimination Act improved customer-care integrated transport measures and the latest ticketing technology: of these the core issue is track capacity for without this the other objectives cannot be met.

  5.3  The issue of track capacity has been sadly neglected by Railtrack and OPRAF. The West Coast Main Line project has favoured the main operator, Virgin Trains, to the detriment of other passenger operators (such as Silverlink) and freight companies. It fails to deliver today's needs let alone the needs of 2010. Additionally, its impact is reduced as one moves further north and is minimal north of Rugby. The needs of Merseyside in terms of renewal and capacity enhancement between Crewe and Liverpool and the needs of Lancashire, Cumbria and Scotland have not been addressed. A rolling programme of renewal and capacity enhancement needs to be developed.

  5.4  It is a major concern that, even in recent resignalling and track modernisation, schemes, such as Manchester South, the issue of future capacity is not being addressed to the detriment of First North Western's current Passenger Service Requirement obligations. There appears to be no strategy for capacity enhancement on the route. As in the case of the West Coast Main Line upgrade, the OPRAF/SSRA position appears to be that Virgin Trains as the commercial operator should gain precedence on train-paths and should gain priority in the allocation of the limited capacity. This is contrary to the Government's Transport Strategy, the priorities of Local Transport Plans and does not address the growth targets in the Government's 10 Year Plan. The metropolitan railways perform just as vital a role as Inter City type services in the seven PTE areas with transport social, economic regeneration and environmental objectives, rather than purely commercial ones. It is essential that SSRA (and the Rail Regulators Access Charge Review) addresses these issues as a cornerstone of future policy.

  5.5  It is clear to Merseytravel that the SSRA (OPRAF) role in the renewal, maintenance and development of the network has been insufficient in the past. However, it is recognised that the restructuring and expansion of the SSRA is now addressing these issues. These now need to be taken forward in a fair and balanced approach to encompass the needs of all operators—passenger and freight, Inter City and regional, commercial and social. There is a need for the SSRA to become more involved in capacity and route development issues.

  5.6  There are a number of key hubs across the Midlands and the North—in Leeds, Manchester and Birmingham. Unless capacity at these is fully addressed to meet the requirements of the next 20 years, as a minimum tied to the objectives of the Government's 10 Year Plan, the growth of the railway to meet Government as well as Local Transport Plans objectives will be neutralised. It is recognised that Railtrack has addressed one of these in terms of Leeds First and some works are proceeding in Birmingham but not sufficient to address the core capacity issues in Birmingham. However, each of these core capacity constraints needs to be addressed as part of a co-ordinated national programme—to deliver "a Leeds" and "a Birmingham" without "a Manchester" in the middle will severely limit the network benefits of the individual capacity re-enhancements. The SSRA therefore need to adopt a strategic network approach.

  5.7  Merseytravel welcomes the commencement of the Manchester Hub Capacity Study. This is the key to development of future Transpennine, North West regional, Greater Manchester local and West Coast Main Line services. It is crucial that a balance between the capacity and development requirements of all these services is delivered in the infrastructure upgrades resulting from the study. Merseytravel is particularly concerned that the needs of Merseytravel supported services to Manchester and Northern Spirit and Central Trains Transpennine services crossing Manchester to Warrington and Liverpool are addressed. The attention of the Sub-Committee is drawn to the work of the Transpennine Rail Group (of which Merseytravel is a lead member) to promote the development of the North and South Transpennine routes. It is crucial that the development of these routes, held back by capacity and the lack of ambition of the current franchisees, is now addressed to link the main centres across the northern region.

  5.8  Merseytravel has been heavily involved in study work into the future shape and requirements of the rail network of the North West through two studies: the Mersey Belt Linkages Study and the Merseyside Freight Study. The former identifies the need to address the capacity issues of the Manchester and Liverpool conurbations as well as the routes in between so to enable the development of a visionary three-tier hierarchy of services—15 minute frequency express services, 30 minute frequency fast services servicing the major intermediate locations and 30 minute frequency stopping services. This strategy and its requirements for substantial capacity enhancement has been endorsed by the partners in the study—Merseytravel and Greater Manchester Passenger Transport Executive, Warrington and Halton Unitary Authorities, Railtrack, Northern Spirit, First North Western and Central Trains. There is an urgent need to address the capacity constraints in Manchester and Liverpool and on the two routes between the two cities.

  5.9  The Sub-committee's attention is also drawn to the recently completed Merseyside Freight Study which focuses on the urgent need to enhance capacity for freight to Seaforth Docks in North Merseyside, reopen the Olive Mount Chord to improve access to Seaforth and reopen links to Birkenhead Docks. The study highlights to need to promote early capacity enhancement to meet the needs of the expanding Merseyside ports and provide a viable alternative for the increasing port-related freight using the road network. This underlines the need for the SSRA to undertake integrated network development for both passenger and freight purposes. The study also highlights constraints to modal shift to rail for Merseyside traffic, especially lack of capacity for freight access across Manchester and on the West Coast Main Line.

  5.10  The agreement of criteria for allocating new franchises is a matter of great concern to Merseytravel as to gain the value for money required under Merseytravel's fiduciary and Best Value obligations. Clearly the use of criteria reflecting whole range of outputs required, rather than the cost minimisation principle favoured by OPRAF in the first round of funding, is essential to meet the needs of the PTEs, LTPs and the Government's 10 Year Plan. The SSRA to date has not issued to the PTEs criteria for discussion and Merseytravel looks forward to a debate on the criteria to be used on the franchises subject to joint funding agreements, as well as those such as Transpennine Express and Central Trains which run into Merseyside but are not currently the subject of franchise agreements to which Merseytravel is a signatory.

October 2000