Full steam ahead?

Significant challenges remain, but Ed Evans from the Civil Engineers Contractors Association in Wales is confident that the new franchise for the Wales and Borders Rail franchise offers considerable opportunities for the construction sector in Wales and the broader economy and wellbeing of communities

This fifth Assembly is the one where our politicians have really put transport infrastructure at the top of the pile when it comes to decision making. Be it the study in the Welsh Affairs Select Committee in Westminster or in the National Assembly’s own rail franchise enquiry through the Economy, Infrastructure and Skills Committee, there seems to be emerging consensus that now is the time to get the rail franchise in Wales on track. Both are very much shaping the final decisions being reached by the new arms length Transport for Wales (TfW) body, which will advise the Welsh Government on who should get the new franchise from 2018. The letting of the next franchise will follow a major change in the responsibility for franchising in Wales, with competence over the Wales and Borders Franchise set to be transferred from Westminster to the Welsh Government imminently.

Naturally, as a key representative voice of civil engineering in Wales, CECA has been busy engaging throughout these months. All of us involved in the process know that Wales’ must not get it wrong this time because there is general cross party and stakeholder agreement that Wales has not had a fair share in the past. Despite having 6% of the UK’s rail routes recent investment in Wales by Network Rail has been as low as 1%. Even if the Barnett Formula was evenly applied we would get 5%, but based on real need – the crumbling infrastructure due to a lack of investment – it should most likely be higher again.

The problem is bigger than just infrastructure funding though. The Welsh Affairs Select Committee got it absolutely right when they dissected the current Wales and Borders rail franchise, awarded in 2003 and which established a 15-year agreement which made no allowance for growth in passenger numbers and no provision for extra train capacity. This lack of vision by the Strategic Rail Authority is astounding. Since then, passenger numbers have increased by approximately 75%. Over the years, efforts and investment by the current holder of the franchise, Arriva Trains Wales, and the Welsh Government have sought to cope with the increase in demand although this has been severely hampered by the poorly constructed original franchise.

The end of the current franchise brings some hope that, from 2018, rail services for passengers might improve and the next franchise presents an opportunity to bring about transformational change. But this will only happen if a number of infrastructure improvements are made, principally, electrification of the network across Wales – the mainlines in north and south as well as the Metro systems. This just goes to emphasise the interconnected nature of all our infrastructure decisions and the need for a broader strategy.

There are, nevertheless, a number of fundamental ongoing uncertainties with this project which need to be brought to a conclusion quickly if the process is to deliver what is needed. Uncertainty over future investment in electrification of the main line to Swansea is already making it difficult for potential franchisees and TfW to plan ahead and make effective decisions, particularly in terms of future rolling stock.

Another relates to Network Rail. It is now clear that the UK Government have refused to devolve Network Rail responsibilities to Wales and allowing them to be aligned to the franchise. Thus although Network Rail have committed to working with TfW and the future franchisee, have committed significant resource and have opened a specific office in Wales, there remains a lack of clarity when it comes to decision making. This has resulted in different parties blaming each other for the delays in electrifying the route to Swansea. In light of such depressing exchanges, what are the implications for north Wales electrification and, even more remotely perhaps, what hope for mid and west Wales?

Transport for Wales, as the procurer of the franchise, has elected to pursue a procurement process for its Operational Development Partner (ODP) based on the competitive dialogue process. Given the complexities associated with this franchise this would appear to be a very sensible approach. It is a recommended process for contracts which are particularly complex and where a client or purchaser is unable to clearly define a technical solution (and/or financial/legal solutions) to meet their needs or objectives. Many would say it takes collaboration to a far more mature level where greater benefits can be achieved.

Whilst a competitive dialogue process is being followed to appoint an ODP (including a preferred infrastructure partner) this is unlikely to be appropriate for appointing other infrastructure partners to either support the “ODP infrastructure partner” to deliver the initial improvements or to be commissioned separately during the term of the franchise to deliver further improvements or maintenance work. The proposal by TfW is that separate framework agreements (also referred to as “call off” contracts) be established with other infrastructure delivery partners for a range of services. These frameworks would also be open to those infrastructure partners bidding as part of the ODP process. This provides an opportunity for contractors based in Wales to directly engage with TfW to undertake works across Wales over the 15-year period. For these arrangements to be successful they need to be procured and managed in a collaborative manner following industry good practice and compliant with the Welsh Government’s Procurement Policy Statements. If this is done, we would hope to see significant opportunities for Welsh suppliers both in infrastructure and other sectors.

But Welsh Government also needs to be really creative in approaching this significant infrastructure investment. Whilst the Welsh Government’s Procurement Policy Statements and associated guidance set out how much of this can be achieved there is an opportunity, via this project, to develop a multi-agency approach to properly coordinate activities. This should be established in advance of any contract awards to proactively support those delivering infrastructure to maximise these wider benefits. It should not be seen by TfW or the successful ODP as a means of transferring these responsibilities down the supply chain – otherwise the full benefits will be lost.

Therefore, taking all of these factors into account, it is clear that in 2018 unlike in 2003 we have the potential to see a rail franchise awarded which would be a real catalyst to infrastructure in Wales. This report, coming hot on the heels of the Charles Hendry report into tidal power, is another timely reminder of the importance of infrastructure to our economic wellbeing and should be at the forefront of any debate by the proposed National Infrastructure Commission for Wales.

It also shows the importance of both Welsh and UK Governments working together to ensure that the passenger experience is a good one. If they can achieve that on a project which has the Welsh border at its heart, then we will be much more than fifteen years down the track.