Exclusive: Southern Railway contract to be investigated by National Audit Office

southern-railway-train-pic-credit-bbc

A Southern Railway train: often overcrowded even if it runs. Pic Credit:BBC

CROSS POSTED ON BYLINE.COM

The badly managed and strike prone Southern Railway contract is to be investigated by Parliament’s financial watchdog, the National Audit Office.

After months if not a years of misery for commuters caused by failing services and strike action over safety  the NAO has quietly decided to investigate the Department of Transport’s  handling of the contract alongside another investigation into the modernisation of Thameslink services. Both are major commuter services  into the capital and both are owner by Govia, the country’s biggest privatised train operator.

The decision by the NAO has been quietly slipped out on its website as an update to the Thameslink investigation without an official announcement. Such a move is bound to cause some consternation for transport secretary, Chris Grayling, and his officials.

Publication of the report due this summer will trigger an investigation by MPs on the Commons Public Accounts Committee where officials will be called to account depending on the NAO’s findings.

Southern is one a series of franchises owned by Govia, a consortium set up by the British  Go Ahead bus company and the French state owned railways, SNCF, whose international arm trades as Keolis.

The NAO investigation comes after the disclosure that Peter Wilkinson , a senior civil servant who is paid £265,000 a year, as director of rail passenger services at the Department for Transport, has been exposed by an investigation in The Guardian for an apparent conflict of interest.

He awarded Govia both contracts but it was revealed that he was, at the time, a
director and the main shareholder of First Class Partnerships, a consultancy which had Govia as a longstanding client.  He has declined to comment about the internal inquiry which is said to have decided that this was a conflict of interest.

Since then Govia’s Southern Railway has been involved in a long dispute with unions over plans to abolish guards on trains. The company has been backed by Chris Grayling, the transport secretary, and unions fear safety is at risk and the plan will be extended to other franchises they run like London Midland.

Southern also decline to provide a comprehensive service to disabled passengers.

The NAO statement on its site announcing the extension said :

“The Department for Transport is sponsoring a £7 billion programme to increase passenger capacity on the Thameslink route through central London. The programme involves the improvement of tracks, signalling and stations, a new fleet of trains and new franchise arrangements for running the passenger service on the Thameslink route.

“Since 2015, train services on the Thameslink Southern Great Northern (TSGN) franchise have been subject to significant disruption, particularly on the Southern services. Alongside our work on the Thameslink Programme, we also plan to report on the Department’s management of the TSGN franchise.”

Rail unions are welcoming the investigation with ASLEF, the train drivers union, keen that such an inquiry will bring transparency to how the contract was monitored by the ministry and also how it was awarded.

Meanwhile  government spin operators have indicated that perhaps the line might be taken back into public ownership if it continues to fail. While this story is officially denied ministers do not like being wrong footed by a detailed National Audit Office investigation and often plan some diversionary tactics when a report is about to be published.

It is question of watch this space. I have also written about this in Tribune.

 

How the government is allowing the Japanese to profit from captive London and Brummie commuters

 

CROSS POSTED ON BYLINE.COM

Earlier this month the Department of Transport extended its recommended list of bidders to run Britain’s railways to a privatised rail company in Japan.

It shortlisted East Japan Railway as a minority partner with the Dutch state rail company Abellio, in the consortium West Midlands Trains Ltd as one of three groups bidding to take over the West Midlands franchise next October. which provides commuter services into London and Birmingham including my home town of Berkhamsted.

But more significantly it decided that East Japan Railway would qualify as an approved bidder for any other franchise up for grabs until 2020.

The Telegraph presented  the bid as a move by a company at the cutting edge of technology as it provides some of  Japan’s bullet train services.

But anyone thinking those on the crowded commuter routes will be whisked in by a super bullet train service should think again.

The story is in fact the exact opposite once you study the company’s latest annual report.

What it shows is that the bedrock of the company’s regular income is its commuter services around Tokyo not its bullet trains. And the prospect for making any more money out of them is a tad bleak.

It reveals that the company is currently facing a downturn in its commuter services serving Tokyo partly caused by a declining population and is looking to expand abroad. It currently provides no services outside Asia – where it is helping develop a mass transit rail system for Bangkok and improve train services in Indonesia.

The annual report says: “Generally, Japan’s declining population is seen as unfavourable for the transportation industry. However, our performance in fiscal 2015 proved that, even in an era of population decline, we can grow revenues by steadily implementing various measures.”

These include developing stations and encouraging more retired people to use local trains as the number of commuters decline.

With lower fares in Japan than the UK, the move could give the operator access to the lucrative London commuter market and it could also offer its services to maintain and build new trains for the British market.

So in other words commuters using London Midland trains to get into Birmingham and London Euston will be contributing to  profits which can be repatriated to Tokyo to offset the declining  Japanese market.

Which makes an investment in London Midland a one way bet for the Japanese since the current Tory government will ensure fares rise every year and the growing population in the UK will all help boost profits.

I would not be surprised to see government ministers in the transport department helping themselves to directorships and consultancies with the company a couple of years after they have stepped down from their posts. After all they have done them a great favour.

I have written about this in Tribune. The three consortia bidding are:a consortium run by London and West Midlands Railway Ltd, a subsidiary of Govia Ltd (a joint venture between Keolis and Go-Ahead Group)’ West Midlands Trains Ltd, currently a wholly owned subsidiary of Abellio Transport Group Ltd with East Japan Railway Company and Mitsui & Co Ltd as minority partners; and MTR Corporation (West Midlands) Ltd, a wholly owned subsidiary of MTR Corporation (UK) Ltd which runs the Hong Kong rail system.

The new London Midland operator will take over in October this year.