Eastfields Station

Part of the debate – in Westminster Hall at 12:29 pm on 18th December 2002.

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Photo of Mr David Jamieson Mr David Jamieson Parliamentary Under-Secretary, Department for Transport 12:29 pm, 18th December 2002

I congratulate my hon. Friend Siobhain McDonagh on securing this debate and on the powerful way in which she spoke up for her constituents. I fully appreciate what she said about inequalities and about wanting to improve life for her constituents. Public transport is important for those who want to get to work, and also for leisure and pleasure. I appreciate that in areas where such a transport system is lacking, people can be left out on a limb.

My hon. Friend raised a number of other matters to do with inequalities, but I shall not be tempted to debate those today. However, I shall try to put into context any decision that may be made about the proposed Eastfields station. I appreciate that a station has been on the cards since the 1930s. I sometimes visit places waiting for a bypass. The longest wait that I came across was 80 years, but it came about at last.

My hon. Friend asked about a meeting. I would be delighted to meet her and to discuss the issues with all the relevant parties to find a way forward.

I shall say a few words about the decision-making process and about how the SRA has to prioritise its spending. The SRA is fully accountable to Ministers and Parliament. Its job is to promote the use of the railway network for passengers and goods, to secure the development of the railway system, and to contribute to the development of an integrated transport system for both passengers and goods.

The authority works to directions and guidance, given by the Secretary of State, that clearly define its roles and duties. The directions and guidance require the SRA to promote efficiency and economy and set 12 main objectives. Its two principal objectives are to work with the rail industry to achieve substantial lasting improvements in performance and to work to deliver the targets in the 10-year plan for transport.

I understand that it is not possible for the authority to confirm whether the proposed station at Eastfields will be progressed. The decision has not yet been made, and other priorities must take precedence, including negotiating the South Central franchise on the new seven-year basis, replacing the mark I slam-door trains and addressing the important issue of the power supply.

It may help if I set out the history of the South Central franchise replacement process to explain how we have arrived at the position that we are in today. There have been significant changes in the rail industry over the period subsequent to the refranchising process.

The South Central franchise was originally let to Connex Transport UK Ltd. in 1996 and, under the instructions of the Deputy Prime Minister, the shadow Strategic Rail Authority began the process of retendering the franchise. At the time, it was envisaged that franchises would be let on contracts lasting between 10 and 20 years, with franchisees making a strong commitment to invest in new projects.

In March 2000, the authority announced that two bidders, Connex and GoVia, had been shortlisted to compete for the franchise. Following submission and review of its best and final offers, the authority announced in October 2000 that it had signed heads of terms with GoVia as the preferred counterparty for the new franchise.

Heads of terms were based on a franchise of up to 20 years. An investment programme valued at £1.5 billion was proposed to introduce new trains and to upgrade track and stations. The programme included the proposed new station at Eastfields. GoVia planned that the station and other infrastructure enhancements would be delivered through a special purpose vehicle. It is important to note that, at that time, the scheme was only at the feasibility stage of development, with the final scope and costings yet to be finalised.

Of course, October 2000 was a critical month not only for South Central but for the whole rail industry. The Hatfield derailment on 17 October put the rail industry, particularly Railtrack, under intense scrutiny. The repercussions of the tragedy were widespread and long lasting. An unprecedented number of speed restrictions were imposed across the country as safety checks were carried out. Services were disrupted for many months. Railtrack's competence as custodian of the network infrastructure was widely questioned. The floundering project to upgrade the west coast main line added fuel to the debate. The project was behind time and over budget, largely because, as the company admitted, there was a serious lack of understanding of the state of Railtrack's assets and the scale of work needed to renew them. In the eyes of many, the project became symbolic of the company's mismanagement.

The problems that the industry, especially Railtrack, faced following Hatfield came to a head at the end of 2001. There was a crisis of confidence in the railways, both in the minds of the public and in the industry as a whole. In October 2001, Railtrack was placed in administration, an event that has been debated at length in this Chamber and in the House. In October of this year, the not-for-dividend company, Network Rail, was established in Railtrack's place. That change was essential for the recovery and development of our railways. Let us remember that it is only 10 weeks since Network Rail became the owner of the railway infrastructure. The company envisages an initial 18-month intensive programme to stabilise the business and to analyse the costs and causes of cost overruns in Railtrack. Network Rail intends to complete the process of building a full asset register of the rail network. Clearly, it will take time to turn the business around.

Following Hatfield, arrangements had been made to focus efforts on operations, maintenance and the renewal of the network, and to make the Strategic Rail Authority, which was formally established in February 2001, sponsor of the development of projects to enhance or upgrade the existing network. Network Rail is now taking forward Railtrack's new maintenance programme to improve its relationship with contractors and to enable it to have tighter control over the cost and quality of their work. There will be stability in the industry under the leadership of the Strategic Rail Authority and improved management of the network under Network Rail.

By this time, GoVia had taken over the operation of the South Central services from Connex, while negotiations for a new 20-year franchise continued. The negotiations had to be halted because of the many uncertainties in the industry—most notably, uncertainties arising from Railtrack's administration, but also uncertainties about particular projects such as Thameslink 2000, which had a bearing on South Central. In those circumstances, it was impossible to reach an affordable, value-for-money deal. There were too many contingencies for which allowances would have to be made. Therefore, it was necessary to redefine the commercial basis and structure of the deal.

In August 2002, the Strategic Rail Authority announced that agreement had been reached in principle on a new approach for the South Central franchise. The approach is consistent with the wider policy changes announced on 6 November. A key feature of the policy is that franchises are not the appropriate vehicles for taking forward major capital investment. Infrastructure enhancements will generally be pursued separately by the Strategic Rail Authority in partnership with the private sector, including Network Rail.

The new South Central franchise agreement being negotiated with GoVia is for a term of up to seven years, subject to the absolute right of the Strategic Rail Authority to terminate it after five years. The new franchise will deliver new rolling stock valued at £900 million and depot improvements valued at £60 million. Given the shorter length of the franchise and the new approach to franchising and infrastructure enhancements, the infrastructure upgrades originally planned as part of a 20-year franchise proposition will not be part of the new franchise.

The Strategic Rail Authority will reappraise the package of infrastructure proposals from the former 20-year proposition and take a view on which elements it will progress as sponsor. The reappraisal is not a current priority for the authority. It will be undertaken during the next year. The outcome will depend on the value for money of the proposals compared with others that are competing for limited funds.

Where new stations are proposed, other considerations, such as environmental and planning issues, will have to be taken into account. A Transport and Works Act 1992 order may be required for construction, access and land acquisition. Operational effects also need to be considered. Of course, trains stopping at a new station add time to a journey—typically several minutes. The impact on capacity and performances also needs to be assessed.

I know that my hon. Friend the Member for Mitcham and Morden feels very passionately on this issue. She is right to do so and, as I have said, she spoke powerfully about the need for improved transport links in her constituency. I know that she will find some of what I have said disappointing. However, I hope that she will understand and accept my explanation of why the prospect of a new station at Eastfields is currently uncertain and must remain so until a reassessment can be carried out by the Strategic Rail Authority. I assure her that the authority is currently preparing its next strategic plan for publication in January.