First steps towards non-profit Wales & Borders franchise

 

Pictured: Heart of Wales line

 

The Welsh Government is making the first moves towards the possible creation of a not-for-dividend rail company, potentially the first long term publicly-owned train operating company on the National Rail network.

Last month, prime minister David Cameron said the Wales and Borders franchise would be devolved. The Welsh Government is now establishing a not-for-dividend, wholly-owned subsidiary company to help “deliver a more effective integrated transport system”. Initially the company’s task will be to provide advice and technical expertise for the Welsh Government on Valley Lines electrification, the South Wales Metro project, and specifying
and procuring the next franchise.

Welsh transport minister Edwina Hart said the company’s role and remit would be able to be extended, as appropriate, to transport delivery. She said this was in line with the Welsh
Labour government’s election pledge to examine the feasibility of the franchise being run on a not-for-dividend basis.

“This new company will enable us to bring in the technical and commercial expertise necessary to augment my department in delivering these exciting projects,” she said. “While its focus will be on the three linked rail/integrated transport projects, it will also be able to provide advice as appropriate on other significant transport interventions.”

She also announced the formation of a Strategic Advisory Board, consisting of “high level industry experts” who specialise in integrated transport and engineering. The board would guide the work of the advisory company and Welsh Government.

Hart likened the potential not-for-dividend TOC to Glas Cymru, the Company Limited by Guarantee (CLG) which took over Welsh Water in 2000 with the aim of reducing the water and sewage system’s asset financing costs. Glas Cymru provided a model when Network Rail was established on a similar footing.

The government’s new company could get its first opportunity to begin delivering services next autumn. By then the government is due to have completed preparations to procure long distance TrawsCymru bus services centrally, instead of using local authorities’ tendering procedures.

The government’s draft National Transport Plan, published for consultation on 11 December, confirms this intention. It lists as a short term priority: “Implement greater central management of TrawsCymru services and determine if there is a viable business case to introduce new TrawsCymru services.”

Professor Stuart Cole, of the University of South Wales, said the government should set up an arm’s length TrawsCymru Ltd company which would provide a testbed for a new rail company. “Those companies should be run as an integrated business by professional people from the train industry and bus industry,” he said.

“The companies have to be told that they are owned by the same organisation and they will work together. We don’t want a repeat of the situation where Arriva Trains Wales don’t talk to Arriva Buses Wales in North Wales.”

 

This article appears inside the latest issue of Passenger Transport.

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