Interview: Ian Yeowart of GCR fame on the future of open access

Ian Yeowart was instrumental in setting up the Grand Central Railway operation, and more than 25 years later he’s still submitting successful applications. He talks to Peter Plisner about open access and changes on the railways.

He’s best known for open access train service planning and operation, but Ian Yeowart’s early career in British Rail had more to do with selling tickets to get on the trains.

He ran ticket offices and travel centres in several parts of the country, before leaving BR as rail privatisation was looming in the early 1990s.

For a man known for his open access success, some might be surprised that his first choice was as a franchised train operator. He and some ex-colleagues launched bids first for Midland Mainline and later for the Regional Railways North-East franchise, where they almost won.

At that point, in Yeowart’s words, he did a “degree” in open access while others were still looking at franchising.

“I was just cramming my head with how does it work? What does it do? How might it progress?”

Their first application was to run across the Pennines, but it was rejected by the then-Rail Regulator Tom Winsor.

Yeowart admits that it was the “moderation of competition rules”, designed to promote fair competition and prevent anti-competitive practices, that put paid to that application.

Instead, he decided to focus on services to London. By the time his second application went in, Tom Winsor had left office and Yeowart was able to secure his services.

“Tom made sure that we navigated it correctly and gave us a very high profile internally, with the regulators and others.”

That assistance was one of the factors that led to him gaining approval for Grand Central Railway. In March 2006, it was granted access rights for three daily services between Sunderland and London King’s Cross.

Yeowart initially partnered with rail replacement specialist Fraser Eagle, which was a major shareholder. It later sold Grand Central to a private investment company, which later sold out to transport group Arriva.

By this time Yeowart had left, but had decided to carry on with open access: “It became a bit more than a hobby - it was an itch. I knew there were things that still could be done, that the industry wouldn’t - or couldn’t - do.”

That led to the creation of first Alliance Rail Holdings, and then Grand Union Trains.

At that time, the Conservatives were still in power - just!

Yeowart maintains that the last Conservative Transport Secretary, Mark Harper, was a convert to open access: “It became very, very popular and very positive.”

Although the Office of Rail and Road (ORR) is independent of the government, Yeowart suggests that the positive attitude at the top did help with later applications.

Indeed, prior to last summer’s General Election that brought Labour into power, Grand Union had successful bids with two open access applications - one running from Stirling to London and the other from Carmarthen to the capital.

They are rights that have both subsequently been sold to FirstGroup, which will operate the trains under its Lumo branding.

Yeowart isn’t worried about getting a reputation for selling on open access rights because ultimately, he had a specific reason for doing it.

“We did have those discussions with the ORR beforehand - it didn’t just drop on their desk. But the issue that we were having, particularly with the Carmarthen service group, was the requirement to have £100 million worth of new trains with a contract in place by the end of November last year.

“Now, for a company like ours, where we’re potentially going to use third-party financing, we would still be talking to the financiers now, trying to get that one over the line. We had to do something in order to move that on.”

Yeowart suggests that he’d been talking to FirstGroup for a long time, although he had been hesitant about doing a deal originally.

“I don’t think Steve Montgomery [Managing Director of First Rail] will mind me saying, but we resisted for some time because we were hoping we could deliver on our own. But it became clear that we couldn’t.”

And FirstGroup has made no secret of its own open access ambitions. With rail reform and renationalisation, opportunities for private train operators are disappearing fast. Diversification into open access operation seems to be an obvious route to take. And First’s purchase of the Carmarthen-London access rights has already helped to keep workers at Hitachi’s Newton Aycliffe factory in work. Late last year, FirstGroup placed a £500m order for new Class 800 trains.

Ironically, the new service will compete with Great Western Railway, which First currently runs under a government contract.

GWR is expected to be handed back to be renationalised in 2028, around the time the open access service starts carrying its first passengers.

Open access has been a success story. Services are popular with passengers, providing cheap fares and the ability to stop trains in areas that are either underserved or not served at all by franchised operators.

But despite the success, there has often been criticism that open access operators are abstracting passengers (and therefore revenue) from existing franchised operators, and that soon, after renationalisation, the government and therefore taxpayers as well.

Indeed, recent events have highlighted government concern over open access.

In January, Transport Secretary Heidi Alexander wrote a letter to ORR making it clear that she had serious concerns about some aspects of open access.

While recognising the benefits of such operations, they had to be approved in what she said were the “right circumstances”. She said a balance needed to be struck to ensure that the benefits provided by open access operators outweighed the impact on taxpayers.

Showing clear concerns ahead of full-scale renationalisation and the possibility of dwindling ticket revenue on newly acquired and publicly run train companies, Alexander suggested that she intended to consider amendments to guidance previously issued to ORR, on the assessment of open access applications.

She also expressed her concern about what she described as the “pressures new services can create on already constrained network capacity”.

But more was to come. In February, the Department for Transport wrote a letter to ORR and current open access bidders, in which officials seemed to oppose all but one of the current bids for open access passenger contracts on much the same grounds as cited in the previous letter.

Later that month, the government’s rail reform consultation was published. It proposed the idea of moving the approval process for access to the network from ORR to Great British Railways (GBR), with ORR becoming an appeals body for those operators who feel that GBR’s decision is wrong.

Some have suggested the latest moves represent a U-turn by the government. In opposition, Labour had indicated that ORR would continue to make approval decisions on open access applications on the basis of an updated framework and guidance.

Yeowart admits that he’s disappointed with the latest developments, but adds: “This is not unexpected. Once the mood music had changed slightly, we expected the DfT to send the sort of responses that we are now looking at.”

But is it the end of open access as we know it?

Yeowart does admit that the drawbridge is now coming up on open access, and that it will be harder to get applications approved. But he’s adamant that open access will continue.

“As you can see, the difference between this February and last February is a change of government. And governments are only here for five years, aren’t they? It could be a slowing down of the process, but I wouldn’t suggest that it’s terminal.”

He maintains that there will be a place for open access even after rail reform.

As for abstraction, Yeowart says it’s an old argument and that there’s plenty of evidence to suggest that open access operators are the catalyst for huge market growth.

“You’ve only got to look at how well the East Coast fares compared with the rest of the inter-city routes to realise that this concern, all the time about abstraction, is just what it is - just a concern, with no evidence to support what their concerns will be.”

Yeowart is adamant that most people fail to appreciate what he suggests are significant improvements that open access has brought.

“When Lumo introduced five fast trains a day between London and Edinburgh, you would imagine that LNER would see a significant downturn in traffic between London, Newcastle and Edinburgh.

“But the exact opposite happened. Lumo has grown the market and the only people that have been affected on this particular route are probably the airlines.”

Yeowart also points out that abstraction forecasts published by ORR are only theoretical.

“It’s only a theory, as all numbers are modelled. There’s no evidence that there’s any actual abstraction or a model to balance that with the significant benefits that come to the industry, the areas, and the country as a whole. You know - jobs created, wealth, income and additional taxes paid, too.”

Yeowart also suggest that competition is good for passengers - not just in providing additional journey opportunities, but cheaper tickets, too.

Thinking back on his days in the early 1990s, running the travel centre at York station, he recalls: “In 1992, you couldn’t buy a train ticket from York to London cheaper than you can buy it today, in actual pound note terms, ignoring inflation.

“Now, I’m not saying you can buy every ticket cheaper, because clearly you can’t. But if you have a restricted budget, you can book in advance, like people even had to do way back then. You can buy tickets cheaper today than you ever could at that time when there were four or five ticket options.”

He’s also concerned that any moves to simplify ticket structures, as the government has promised, could end up pushing up fares.

“Simplification means higher prices. End of story! There’s no getting away from it. And unfortunately, we don’t live in a simple world, do we?”

Yeowart’s application to run trains from Cardiff to Edinburgh via Birmingham New Street was one of those being opposed by the DfT on abstraction and capacity grounds, before it was withdrawn in April.

But he maintains that Cardiff is seen as one of the most poorly connected cities in the UK, and thus the new two-capital service is designed to remedy that situation.

The application to the ORR noted the decision by CrossCountry Trains to extend one of its Edinburgh services to Cardiff. The document said: “We are pleased that, belatedly, the industry can see the value in additional services to this important location in much the same way as GWR has with its own extensions to Carmarthen from London.”

Undeterred by recent changes in government thinking, Yeowart’s company Alliance Rail (Southern) is consulting on plans to run an hourly service between Marchwood (on the Fawley branch) and Southampton Central, with every other train continuing to London Waterloo.

All trains would call at Totton, while intermediate stops to Waterloo would be Southampton Airport Parkway, Eastleigh, Winchester, Basingstoke and Hook. Additional stops at Woking and Wimbledon are also being considered.

If approved, it would mean the return of passenger services along the Fawley branch (known as the Waterside line) for the first time since 1966.

Plans to reopen the line, which was part of the previous government’s Restoring Your Railway (RYR) programme, received widespread support from locals before being shelved by the new Labour government soon after taking office in July.

Yeowart says: “I would hope on this one, the Secretary of State could see the benefits that can occur from the private sector.

“It was a very costly exercise to reopen that route through the Restoring Your Railway scheme. The road network down there, particularly as you come off that area into Totton, is horrific in relation to how busy it is, considering where it is.

“So, after the RYR programme was scrapped, we thought ‘let’s have a read of the study into the scheme and see what it said’.

“To us, it just seemed like a no-brainer. In the past, we’d looked at Southampton as a possibility, but it was rejected by the regulator - not for anything that we couldn’t have addressed. But the main issue we had was that the trains disappeared.”

Yeowart was planning on using Class 442s. But before he could secure a deal, they were leased to South Western Railway and then later scrapped.

“When you think about that waste within the railway, who cares about a little bit of competition and abstraction? But that’s a different matter.”

More recently, services to Southampton and the Fawley branch came back into Yeowart’s sights.

“We spoke to the people who created the study, and we spoke to the stakeholders. We’ve had quite long discussions with colleagues at Network Rail and we’ve advised the Department for Transport what we want to do, because there is a section within the DfT that looks after open access.

“They weren’t entirely negative to open access. So, when we’d had a look and paid a visit, we felt we could potentially get the scheme up and running if it was done in a phased way, rather than a big hit way.”

The line is operational between Marchwood and Totton, although only cleared for a top speed of 30mph.

However, Yeowart suggests that speed improvements aren’t necessary to get the new service up and running for the short run from Totton. And the plan is to use Class 769 bi-mode trains. Previously Class 319s, they’ve been converted by Brush Traction.

“There are plenty of them available, and Porterbrook really wants to see them in traffic. We’d like to see that happen, too.”

The original RYR study suggested an hourly local service, or a half-hourly local service, with the potential to go on to London. And that’s what Yeowart’s latest proposal is based on.

“The main difference between our application and the previous one is that there are 80 jobs coming with our application, and those jobs will be in the area, Eastleigh, and potentially around Marchwood, depending on where we ultimately stable the vehicles.”

The proposal will also see the re-commissioning of Marchwood station, which closed in the 1960s.

“We'll obviously have to get Network Rail to lift the freight-only restriction on the route,” notes Yeowart.

“We'll have to spend a bit of money, we think, on the level crossing at Marchwood too, although the signalman there was very supportive when we did our site visit. And there’s capacity at Eastleigh for maintenance of the trains.”

Further north, although he has withdrawn his application to run from Cardiff to Edinburgh, Yeowart has not ruled out resubmitting in future once power supply and capacity issues have become clearer.

With open access success already under his belt, and new applications being worked on, Yeowart clearly still sees a future for open access, even after renationalisation.

However, he admits that it will be harder to get approval going forward.

Analysing the latest changes, one obvious conclusion is that the current Transport Secretary has a different view on open access to the last incumbent. Nine open access applications are currently awaiting ORR approval, and only the one from Wrexham, Shropshire & Midland Railway has won DfT approval. It will be interesting to see what happens next.