- This feature was published in RAIL 903, available to download.
It was all supposed to have been so different. A new decade would bring new trains and a new era for travel in East Anglia.
So long the bridesmaid, but never the bride, passengers in the region watched as all of the current Greater Anglia franchise’s neighbours received new trains.
There had been a few small fleets for GA and its predecessors, but consider the fact that until January 7 2020 there had been no brand new train purposely built for the Norwich-London route for more than 60 years, and you begin to understand why the Great Eastern Main Line Taskforce was so passionate in its campaign for new trains. Even GA Managing Director Jamie Burles had previously told RAIL it was “our turn”.
But it’s more than just new rolling stock. Infrastructure upgrades are required. Major schemes that can benefit the entire country, not just East Anglia, need to be funded.
At a meeting in Westminster in September 2016, after Abellio had been awarded the franchise that would start the following month, then-Taskforce Co-Chairman Chloe Smith told fellow MPs and railway stakeholders that with the new trains agreed there would now be no let-up in the campaign to improve the infrastructure needed to support the £1.4 billion investment in an entire fleet replacement.
But that hasn’t happened. Smith left the role, which has since been moved between various politicians with Priti Patel currently in the chair. The Witham MP (and current Home Secretary) appeared at the launch of the much called-for ‘Norwich in 90’ service in May 2019, and has asked one or two questions in Parliament, but otherwise it’s been left to GA and Burles to lead the campaign.
And it’s not been an easy time - the awarding of the franchise was delayed by Brexit; plans for a new depot at Brantham were cancelled; passenger numbers were affected by the decision to leave the European Union; additional funding had to be sought via Mitsui & Co (which has a 40% stake in the GA franchise); fewer passengers are using season tickets; the introduction of new trains has been delayed; and dispensation had to be requested to enable trains that do not meet accessibility regulations to continue in traffic.
Added to that was poor performance that resulted in GA being named Network Rail’s least satisfied customer, continued weekend closures (initially often related to Crossrail), industrial action taken by the RMT union over the role of guards, and issues with new trains on rural routes caused by signalling problems. It’s fair to say that while GA has not been perfect, plenty of obstacles have been thrown in its path.
And then came the COVID-19 outbreak. RAIL spoke remotely with Burles on March 24. Like much of the nation he is working from home, although he does still travel when he’s able to - in order, he says, to show staff that management are as involved in this as they are.
March 24 was also the day after Government had announced what was effectively the suspension of franchising, by introducing Emergency Measures Agreements (EMAs) that transferred the revenue risk to the Department for Transport for a period of six months (RAIL 902).
Burles has been GA Managing Director since the franchise began in October 2016. He joined what was Abellio Greater Anglia in 2014, having previously been Bid Director for Abellio Group.
In the current climate, even the most experienced senior managers would be asking for advice, but Burles says that’s just not possible.
“This is the strangest period I have ever known. I cannot go to a wise old head as they have not been through something like this. Various people have lived through various things, but nobody has dealt with this. It’s completely unique.”
Was the industry prepared for this? As the virus tightened its grip on the world, most UK train operators continued as usual - albeit with trains running empty, or at least with a gradual decline in passenger numbers.
Then, once Prime Minister Boris Johnson announced that the public should not travel unless they needed to, all UK operators introduced emergency timetables. As days in isolation turned into weeks, so train operating companies (TOCs) have continued to reduce their already scaled-back timetables.
“I’d like to say the industry was a couple of steps ahead, but I don’t think we were,” admits Burles.
“The industry was mostly caught by surprise. Maybe there was a naive hope when it touched Europe that those cases would be contained, and not spread like in Italy. The sheer spread of it has taken us by surprise, but we have responded in a rational way. Our people are doing very well and taking it very seriously. I think we are responding responsibly.”
Burles explains that with GA carrying only a handful of passengers, discussions were held with Government regarding the level of service (see EMA panel, page 61).
“We’d make the proposal, explain that the passenger loadings are down and that we could step down the service, but that would then reduce capacity. It’s then the DfT’s decision. The DfT takes full cost and revenue risks and there’s protection on both sides,” he says.
With the Government now effectively in charge, Burles says more discussions will take place regarding the 387 commitments that were put in place as part of the franchise - although “there’s a lot less to be delivered now”, he observes.
“It’s a case of if you pause, amend or change any obligations, if you imagine some big stuff like implementing new stock, the DfT would agree to carry on.”
With the EMA in place, could GA take advantage of the situation by asking if Network Rail (also Government-owned) could carry out some of the work needed to improve reliability?
“You have touched on our thinking. Projects such as platform lengthening, signal sighting - we are at the very start of our thinking on this. If there’s to be a hiatus in demand, can you take advantage of this lull and get them fast-tracked or carried out?”
Since RAIL’s interview with Burles, however, NR has suggested that while work will be carried out on the national network, the company is not prepared to risk the safety and wellbeing of its staff. Any projects that do take place will only happen should the social distancing policy of two-metre gaps between staff be possible.
As for Burles’ own staff, as of March 24 the operator had had no confirmed COVID-19 victims, although some members of the team were self-isolating.
“We do have some vulnerable people, and some people are showing symptoms. Some people have gone off work, waited and then come back. Twelve train crew came back to work yesterday - that was significant, and they hadn’t wanted to be at home.”
Burles explains to RAIL that there is a detailed plan in the event of more victims: “There is a rota for staff. Think of a conductor - they are mission-critical for running trains. We now have a surplus of them, so we are maintaining a normal level of spares and then agreeing with named individuals to stay at home or near the station so that when other people are affected, they can work. Effectively the staff have been split in half. We’re doing this with directors and managers as well - we’re trying to be sensible and keep our staff fit and healthy.”
Burles acknowledges that there have been some instances where demand has exceeded capacity or where safety has become an issue for passengers, but that these has been quickly resolved.
For example, on March 23 GA confirmed it was introducing 12-car trains on the Southend Victoria route throughout the day, so that passengers could carry out social distancing.
“We took a very quick decision to strengthen the trains and lengthening them allows passengers more room. We are seeing intense loadings there, and we are reviewing it. That was the first example of the EMA. I decided we needed to do that and checked that we could do so with the DfT.”
The situation is changing rapidly - and operators need to react. Season ticket travel is declining, with the most recent Office of Rail and Road figures revealing that more than five million fewer journeys are being made using season tickets. At the same time, GA reported a 2.7% increase in passenger numbers (up 22.5 million), a 1.6% increase in passenger kilometres, and a 4.1% increase in passenger train kilometres.
Speculation persists around the GA franchise’s finances - and indeed its future, with suggestions that it’s one of several TOCs that could have been staring down the barrel of the Government’s Operator of Last Resort route. Burles is having none of that.
“For Greater Anglia, some of the black and white facts are that if you look at last year, which feels like such a while ago, we exited 2019 hitting our profit target, which was £6 million. We were above the London and South East revenue costs and we’re also the most improved London and South East TOC in terms of performance. Financially we did well and the customer service experience did well.
“So, 2019 was a very good year for us. Yes, we had issues with new trains towards the end, but the trains were being welcomed by passengers.”
Burles then moves on to 2020, describing it as challenging - and that’s even before the impact of COVID-19.
“There’s the big step-up in premium payments and the profit target is set at £2m. We’re leaving COVID out of that as our financial guys are beavering away looking at the numbers.”
Over the lifespan of the franchise, Abellio must pay Government £3.7bn (which is more than the £3.3bn deal that spelled the end for Virgin Trains East Coast). The Dutch company has already agreed to hand back ScotRail in 2022, in an agreement surrounding finances.
Burles tells RAIL: “We were on track and have been hitting the numbers. Greater Anglia remains profitable, but we do have challenges. The Central London Employment Mechanism is having unintended consequences - it’s not creating an upside and we still want to change it as it’s not worked.” (CLE is designed to protect the operator and Government in the case of any dramatic change to jobs in the capital’s economy, which has occurred post-Brexit.)
Adds Burles: “This does show the current complexity of the system. Some of the mechanisms have come around with more variability - all the challenges thrown our way we have done well to navigate. There has to be a way to respond to the macro changes - you need the strategic approach.
“Look at where we were before all this. We were faring a lot better than others for season tickets. Our market was flat. Revenue was growing 5%, but season tickets were growing at a rate of zero. It was flat and it will now continue into the negative.
“We’re seeing passengers go from weekly season tickets to daily tickets. As an operator you benefit from the increase in yield, but it’s a challenge I’d like to think DfT and the industry should work together on - I do believe this has to be done.”
Burles looks to the future, when the UK has got itself up and running again post-COVID. He and his team are already analysing what the likely challenges will be and how best to tackle them. Unsurprisingly, passenger numbers are near the top.
“I do think it will be tremendously naive to expect that the enforced hiatus and working from home will not have some lasting impact on the commuter market. We have to think of ways to promote rail, but I do believe the future of rail is positive. Social interaction and experiences are so key to us, as we are finding out. The need for that will not go away, but it does mean some long-term impact such as what products we offer.”
Burles turns his attention to the headline matters surrounding the GA franchise - that it’s the first in the history of the current privatisation to have had a complete fleet replacement. This project is ongoing, but very behind schedule.
The franchise was also bid against infrastructure work that has yet to happen – indeed, some is not even costed by Network Rail for the current Control Period (due to expire in March 2024).
Without some of these schemes - such as a new double-track swing bridge at Trowse (near Norwich), double-tracking Haughley Junction (near Stowmarket) and dynamic loops at Witham - then the much-needed revamped timetable on the Great Eastern Main Line will not be possible.
Burles tells RAIL: “I must admit that clearly I am frustrated that some of the infrastructure schemes are not progressing. There are new schemes in place so yes, there’s a process and structures, and you can unlock more proposals. But considering these are very, very needed and straightforward schemes, they are taking longer than needed.
“For Haughley Junction, we are talking of rising cost estimates from £15m to £30m - that’s loose change in rail terms. I do think that with regard to the spending taps being loosened by the DfT, it would be good to convert projects like this. Ely North Junction is another that is screamingly important.”
Another major headache for GA has been accessibility. On January 1 2020, there were 1,509 vehicles nationally that required dispensation from Government to carry on in service despite not meeting accessibility guidelines. Of these, just over half were in GA’s fleet. None should have been in traffic, but they were required to continue because of the late delivery of new rolling stock.
Burles defends the situation: “Our first deadline was the inter-city fleet. We were on track for March 31, despite a few challenges including a train hitting a piece of Network Rail kit and needing four months’ worth of repairs.
“We are ramping up introduction of the Class 745s and will have eight of the inter-city sets by the end of March. We needed an extra two weeks and had a contingency surrounding legacy stock, which we had primed to deliver. Now we no longer have to enact that contingency plan.”
GA withdrew its Class 90/Mk 3 sets from March 24, with all sent off-lease a week later. The reduction in service on the main line meant there was no need for the contingency plan (this had involved Renatus Class 321s, displaced on their routes by ‘321s’ cascaded from Northern).
However, a major part of the accessibility issue is the number of non-compliant electric multiple units in traffic on outer suburban routes, due to the non-arrival of Bombardier Class 720s. These new EMUs should have started entering traffic in March 2019, but none has done so and only one has been tested on the main line - and that only began in the last few days of March.
“Bombardier is the question,” says Burles. “There are cascades, with our ‘360s’ due to go to East Midlands Railway . That’s a shortfall. Even before COVID-19 our Engineering Director has been looking at options. He’s still working on it. There are about seven options.
“We know how important this is to the Rail Minister. It would be remiss of me to say there’s not a risk. I believe the most sensible option would be further dispensation for a short period.
“That’s why it’s incumbent on us to navigate this. And we will find a solution. I do appreciate the Rail Minister’s view, but there will be a number of challenges to achieving these deadlines.
“Everyone approached with the correct attitude and the best solution. I’m not dictating what that is, but a small temporary solution would be good.”
Burles discusses the start of ‘720’ testing (RAIL 902), but admits he is unsure over what impact the pausing of production at Derby Litchurch Lane would have on the project.
“The ‘720’ has been out. We were really happy - it tested with no faults. There was a pleasant surprise it was an unmitigated success.”
But, the big question: when will the Aventras enter traffic?
“Clearly, if everything goes well and ignoring COVID-19, then it should be this summer. Arriva Rail London introducing pairs of Class 710s on its services was the key for us. The Train Management System is in the realms of approval. Finally, we are feeling positive.”
That final statement is perhaps something Burles and his team can look at once COVID-19 is over.
It’s been a long 42 months since the start of the franchise. With the new trains in place, perhaps the corner can now be turned?
COVID-19 passenger numbers
Like all operators, Greater Anglia has significantly cut the number of services it runs.
Emergency timetables were introduced on March 23 and then revised on April 6. RAIL understands that more cuts could yet happen after this issue of RAIL went to press.
GA Managing Director Jamie Burles told RAIL on March 24: “The Southend line is showing the bigger numbers, while the West Anglia Main Line is lower and that is running with eight-car trains. The Great Eastern Main Line is under review. It would be lovely to see into the future, but the prognosis is that there will be a continued drop-off in passengers.”
He explained that the high numbers of passengers on the Southend route was caused by the large number of construction workers travelling to London. Those numbers had begun to tail off, with 50% fewer on March 24 compared with the day before.
This was largely attributed to the uncertainty surrounding the construction industry and whether staff were identified as key workers.
Emergency Measures Agreements
The Emergency Measures Agreements are designed to protect franchises during the huge drop in passenger numbers caused by the COVID-19 outbreak.
They were announced on March 23, although contracts had been issued two days earlier. Had any operator not agreed to an EMA, then the Government’s Operator of Last Resort (OLR) would have taken over that franchise. In the end, all agreed.
On March 25, Secretary of State for Transport Grant Shapps told the House of Commons Transport Select Committee (via Skype) that ticket sales had dropped by 98% compared with the corresponding period in 2019. He revealed there had also been an 84% reduction in footfall compared with 12 months ago.
Following the introduction of the EMAs, the operators are running services for a small pre-determined management fee that is set at a maximum 2% of the franchise cost base before the break. These cost bases were set from March 1.
Shapps said the EMAs had been introduced because “people deserve certainty that the services they need will run or that their job is not at risk in these unprecedented times”.
The DfT’s attitude is that allowing operators to enter insolvency would cause significantly more disruption to passengers and higher costs to the taxpayer.
When he spoke to RAIL (remotely via an online collaboration tool), Greater Anglia Managing Director Jamie Burles was awaiting the final paperwork for the deal.
“Effectively onto an emergency agreement. That means we will run the business, and Dominic Booth is still my line manager. We will need to agree several things upfront with Government and on an ongoing basis.”
Burles says that agreeing the opening balance of the agreement, which is dated March 1, provides a straightforward base for Government: “The DfT has detailed knowledge of our contract. But we have to consult them for anything out of the ordinary.”