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Article dated 31/12/2016

Secretary of State for Transport unveils plans for private company to build and operate East West Rail

By Jerry Alderson with input from Phil Smart.

On 6th December Chris Grayling, Secretary of State for Transport, effectively resurrected the concept of a Special Purpose Vehicle (SPV) to manage significant rail enhancements, as preferred by Sir Alastair Morton when he was chair of the erstwhile SRA until 2001. Grayling's proposal is for a new East West Rail company to design and construct the full scheme and then operate train services on the line, leveraging in private investment at each stage by linking transport infrastructure development with the economic and housing development around it. In fact, 15 years earlier, Skanska with the involvement of GB Railways PLC had proposed something similar for the East West route, although at the time major housing expansion was not envisaged - a key reason why the project fell through along with complete lack of support from the SRA and government. Today, however, nearby Milton Keynes, the fastest growing place in Britain, along with Oxford and Cambridge require good rail connections other than the existing routes radiating out of London.

Grayling's proposal removes Network Rail from managing the project - following some serious mismanagement of major upgrades such as the electrification of the Great Western mainline - and the route would be passed to a standalone company. Seen by some as effectively privatising part of the rail network, bringing back bad memories of Railtrack, Grayling said the aim "put the passenger at the heart of delivery" by delivering Britain's first integrated rail operation since British Rail in the 1990s. He claimed that that the "assumption that Network Rail should always do everything does not ever give us any benchmarks to judge whether someone else can do it better", and continued "I want to use this as an opportunity, in a way that does not affect the rest of the network, to test the way that we are doing things, and to see whether we can do them quicker and better." Actually there have been attempts to undertake major rail projects without involving Network Rail - construction the Borders Railway along with maintenance for the next 30 years was originally put out to tender but after all bar one bidder dropped out it was passed to Network Rail to construct and maintain. Days after the announcement it emerged that the DfT had not carried out a thorough evaluation of the time and cost benefits of using a SPV.

Apart from announcing that the SPV (to be chaired by former Chiltern Railways Managing Director Rob Brighouse) will be established in early in 2017 and 'work hand in glove with the National Infrastructure Commission as it plans the development of this nationally-important transport corridor to identify the best way to deliver the project', the government has revealed little detail. There are many questions to be answered. A design-build-operate model is common for tram systems, because they are isolated systems, but may be less suitable for part of the rail network that is shared by long-distance passenger and freight trains. Although the company would maintain and renew the track, presumably the route would be controlled by one of Network Rail's Regional Operating Centres (ROCs), not by the company's own control centre. Would other trains have to pay a premium to use the route and, moreover, would there be premium fares for the new company's own trains, akin to the Javelin trains on HS1? Railfuture would, obviously, campaign for all nationwide and regional railcards, rovers and flexible tickets to be accepted on the route.

Hopefully the route will be built to be future-proof and capable of being enhanced relatively easily. Many will hope that it will be electrified from the start, and operated by trains with in-cab signalling. This is easier said than done, of course. Simply passing the design and construction to a private company will not entirely avoid the problems that Network Rail has encountered when put in charge of major investment projects. The skills needed by the new company to build East West Rail will still be in competition with those employed by Network Rail on other projects, but at least it will be a leaner organisation, and will not have to follow Network Rail's management processes, even if it, presumably, will be required to follow its technical standards.

The undoubted good news is that Grayling has raised even higher the profile of East West Rail (above the Expressway road scheme), reaffirmed the government's commitment to it (helped by the November 2016 Autumn Statement announcement of £110m funding), hopefully enabling the opening date of the link to Cambridge to be brought forward (before Network Rail's suggested 2032 opening), and lastly made it much more difficult for the government to backtrack in the future. Railfuture continues to point out, and did so on BBC Look East on the day of the announcement, that the economic benefits of the full scheme means that the country is currently losing £1m every week because it has not been built.