1 gnwr pendolino by Allianz Rail

Virgin Trains and Department for Transport challenged by Deutsche Bahn competition

Published:14th August 2015

Virgin Challengers authorised by Office of Rail and Road authorises regular services between London

It has taken several years of negotiations but on August 7 an Agreement was Authorised by the Office of Rail Regulation (ORR) between Alliance Rail Holdings (ARH) and Network Rail (NR) for a ten year track access agreement to operate trains bertween Blackpool North and Queens Park, just outside Euston.

The trading name of the new Open Access company will be Great North Western Railway (GNWR) owned by Arriva, itself owned by Deutsche Bahn, the German Government owned rail operator. On the East Coast route, Arriva operates open acces services under the Grand Central brand between Kings

Cross, Bradford and Sunderland. It also operates several major framnchises such as Cross-Country and Arriva Trains Wales.

Blackpool trains will create around 120 new jobs and will commence in 2018 and will be run in direct competition with Virgin Trains who launched a much lauded one train a day red-eye early morning service in December 2014. GNWR proposes to use a fleet of four shorter six carriage version of the Pendolino train used by Virgin. This means that 125mph train paths can be used for these services but only once the line has beeen electrified between Preston and Blackpool and the new flyover is in use near Stafford.

What’s in propspect?

GNWR now has firm Rights to operate six off-peak return services between London and Blackpool North from Monday to Saturday, and five on Sundays. It is significant that the firm Rights only apply to Queens Park a few miles out of Euston rather than Euston. NR is not able to guarantee platform space at Euston because of HS2 works which will limit capacity there on a few years time. Queens Park is a couple of stops outside Euston on the Watford local line and also served by the Bakerloo Line.

Despite this, NR and GNWR believe that Euston will be able to accommodate the new services after re-modelling to accommodate HS2 pre-works. Trains will use the Queens Park slow line platforms with trains standing in Kilburn Loop whilst awaiting the northbound path.

Trains will call at Crewe and Preston and if capacity can be found, at Milton Keynes, Nuneaton, Tamworth and Lichfield Trent Valley. The ORR has a duty to asses the viability of a service ad to see if the rail market can be enlarged and they ay that the new services will generate at least 30p of new revenue for every £1 abstracted from existing services.

They think that GNWR could abstract around £22million annually from Virgin, Transpennine Express and Northern Rail so will really introduce competition to the route. This is something Richard Branson trumpeted when he was awarded the West Coast Franchise nearly 20 years ago so now the fight is on!

Refranchising the West Coast

The Virgin West Coast and the London Midland franchises are due to be refranchised by 2018 and the GNWR Rights are conditional on the company procuring the proposed rolling stock followed by services commencing by a given date. If either of these conditions are not met, the access rights will be lost. Assuming the trains run, then bidders for both franchises will need to take heed of the GNWR services.

They said:

Ian Yeowart, Managing Director of Alliance said “We are naturally delighted that the ORR has approved our application to deliver a new direct rail service linking Blackpool and London The introduction of these new services will further grow the market for rail travel.

As well as bringing new direct services to a number of locations, notably Blackpool, it will give passengers further choice. Experience on the East Coast Main Line (ECML) with Grand Central has shown how this stimulates the market and helps put pressure on prices, a fact noted by the Competition and Markets Authority (CMA) in its recent rail review”.

Alliance Rail is also working with Network Rail and others to provide improved facilities at a number of geographically important locations to make these stations safer and more accessible to support the challenge of changing travel patterns, particularly in encouraging car drivers to travel by train.

ORR director economic regulation, John Larkinson, said:

The Office of Rail and Road (ORR) has approved an application from the Great North Western Railway Company (GNWR) for new off-peak train services between Lancashire and London on the West Coast Main Line. ORR recognises the benefits competition between train operators can bring to passengers and welcomes applications for new train services where they meet required criteria and provide real benefits for rail users.

In this instance the proposed new services will bring significant passenger benefits with extra direct London – Blackpool trains, new journey opportunities including new direct services to and from Poulton-le-Fylde and Kirkham & Wesham, and improved journey times. The regulator will include conditions in GNWR's access contract to secure these benefits. The company's plans submitted to the ORR include additional investment in stations and trains, bringing further benefits to passengers

And on the East Coast route…

Arriva owned Great North Eastern Railway (GNER) has applied to operate services between Kings Cross and Edinburgh in direct competition to Virgin Trains East Coast. Currently they operate the Grand Central services to Bradford, Hull and Sunderland but not serving the lucrative Newcastle and Edinburgh markets.

The trains, twelve 9-car, 500 seat Pendolinos running at 140mph tilt-enhanced speeds, (a few would also call at Stevenage) and be in direct competition to budget airlines serving Luton and Stanstead airports. Trains would undercut franchised services by running hourly in well under four hours between Kings Cross and Edinburgh calling mainly only at Newcastle.

The 223 minute journey for the 401 miles would be over half an hour faster than Virgin’s trains and Newcastle would be just 149 minutes from London. The tilt technology is not compatible with the Hitachi trains procured by the Department for Transport (DfT) to be introduced by Virgin Trains East Coast. GNER would fund the required trackside infrastructure to allow their tilting trains to operate as part of a £300million private sector investment. These would start in December 2018 and be in direct competition to the Hitachi trains due to be introduced at the same time.

First Hull Trains is also looking at expanding their open access services using Hitachi AT300 trains under the banner of East Coast Trains and all this no doubt is causing the DfT a headache as their franchise financial projections do not include competition which was precisely why the Government privatised the railways in the way it did 20 years ago!

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