Rail: long term economic plan
Speech about the infrastructure, innovation and the skills needed for a world class rail industry, given at the Rail Innovation Awards.
Thank you and good afternoon everyone.
It’s a real pleasure to be here for the Rail Industry Innovation Awards and an honour to be invited to speak today (27 June 2014). So thanks to the Fourth Friday Club.
Pace of change
To the inexpert eye of the general public, that sector of the population who – inexplicably – have no interest in the railway it may seem as if the pace of innovation in this industry is remarkably slow.
They might claim, not without justification, that the speed and frequency of services haven’t progressed much since the 1930s.
That the mainline intercity network today is unchanged from the Victorian era.
And that passenger facilities haven’t developed substantially, after all, trains were equipped with comfortable seats, restaurant cars, lavatories, and sleeper accommodation even before the start of the First World War.
So, they may ask, where’s the innovation?
Challenges and achievements
Of course, we know that rail technology and innovation has never stopped evolving and that’s because the challenges facing the industry have not stopped changing either.
In the decades after the Second World War, the overriding challenge was how to manage decline. As car ownership became more affordable, it seemed as if Britain’s love affair with the railway was over for good.
But since the 1990s, the challenge has changed again, how to meet rapidly rising demand for rail travel on an ageing network?
Considering the lack of investment, the pace and scale of rail innovation has been hugely impressive since privatisation. Passenger journeys have doubled in just 20 years – which means more people are travelling on the railway than ever before. Rail freight has grown 60% in the last decade.
Despite what we might read, an European Commission survey found that passenger satisfaction here is higher than other major European countries like France, Germany and Italy and Britain’s railways are also among the safest in Europe.
So let’s be clear.
This industry has come a long way in a short time. It’s done so by innovating and that spirit of innovation is now taking the railway into a new era. An era of record investment under the coalition.
Where once the challenge was how to manage decline, today it’s how to grow while improving the passenger experience and getting the very best value for both farepayers and taxpayers.
Investment
By 2020 it is estimated a further 400 million rail journeys will be made in Britain. Our best assessment is that demand will increase by a further 30% over the following decade. We have to be ready for that growth.
So Network Rail will spend £38 billion over the next 5 years on maintenance and improvements. That won’t just generate faster journeys, greater comfort and better punctuality it will also generate fantastic opportunities for the supply chain.
At the end of May, for example, Network Rail awarded contracts worth £28.8 million for the first phase of its traffic management system. This is a major investment in cutting edge technology, and will consolidate control of Britain’s rail network from around 800 signal boxes into 11 or 12 state-of-the-art operating centres. Once completed, it’s expected to reduce costs by £250 million a year, while enabling better regulation of the railway timetable.
Looking ahead, Network Rail is also co-ordinating the introduction of the European Rail Traffic Management System. To be deployed first on the Great Western Main Line, East Coast and Midlands Main Lines, ERTMS is one of those transformational technologies that will deliver further savings and capacity enhancements.
Of course the industry is also benefiting from major schemes like Crossrail, Thameslink and Northern Hub, from our programme to electrify over 850 miles of track and from the £5.7 billion InterCity Express Programme which will deliver 122 new trains built at a state-of-the-art facility in the North-East, using components sourced from across the supply chain.
On that subject, I’d like to make a few points about IEP.
If we are serious in our commitment to build a railway fit for the 21st century, then the new trains are essential. They will transform rail travel on the East Coast and Great Western mainlines, providing more seats to ease overcrowding, in a comfortable, relaxed and spacious environment.
That means more leg room and luggage space, and better connectivity for commuters using mobile phones and laptops. Reliability will be enhanced, and journey times reduced and crucially, IEP will boost capacity by up to 28% into London King’s Cross and up to 40% into London Paddington.
The current train fleet would require significant work to keep it running reliably. Leasing older trains would not meet customer expectations on these busy mainlines – particularly over a 30-year timespan. For the money they’re paying, customers rightly demand a high standard of service.
For decades we’ve been ‘sweating the assets’ of the railway. But you can’t put off modernisation forever. The time has come to replace the intercity fleet for the good of passengers, the rail industry and the UK economy.
Then there’s HS2.
A new railway for Britain that will genuinely transform the passenger experience and release significant capacity on the existing network. The construction of the first new north-south rail line in this country for well over a century will ensure a long-term pipeline of rail investment to sustain thousands of engineering jobs across the country.
This will be the biggest transport infrastructure project here since the coming of the motorways and we will start building Phase One in just 3 years. So firms across the country will soon be bidding for contracts.
Supporting innovation
After so many decades of underinvestment, this programme represents a very considerable upturn in opportunity for the rail industry. We want to help you grow and we’re supporting you in different ways.
We set up a pilot innovation fund through FutureRailway to bridge the gap between research and bringing new technologies to the market.
Our £30 million investment has been co-funded to create nearly £60 million to help a wide range of projects, from systems to remotely monitor the condition of the network, to new concepts in very light rolling stock.
Derby-based supplier SET is using its funding to develop a new electric drive concept in which the motor is contained within the wheels to improve dynamic performance.
While the Birmingham University and Avanti Communications have proposed a satellite system to detect objects or infrastructure failures serious enough to block a railway line.
More than 140 organisations have benefited from the programme and there’s more to come in Control Period 5. We’re also supporting a research programme at the RSSB. For example, RSSB research suggested that converting the railway in the south-east from third rail to overhead lines could save time and money.
Network Rail has taken up the challenge to convert the line from Basingstoke to Southampton during the current control period. Network Rail and the RSSB are helping the industry to consolidate its innovation activities under the FutureRailway banner.
With co-funding this will create a programme worth £250 million to deliver the next generation of railway operations and improve the UK export opportunities for rail. We also support the industry’s Rail Technical Strategy, which has set out a 30 year vision for the railway.
And we’ve also supported the Department for Business, Innovation and Skills with £17 million to help establish a Transport Systems Catapult Centre. The centre – which opened in Milton Keynes earlier this month – will work with companies to develop and sell innovative technologies and services around the world.
The Catapult has helped us increase incentives for Train Operating Companies to ring-fence 1% of revenues for innovation. Examples we might see are battery powered trains, passenger trains making better use of spare capacity to carry freight and safer stations.
The results will depend on the ingenuity of the operators. But we expect a return of 4 pounds for every pound invested.
Skills and the global market
This focus on the global market is critical if our innovation strategy is to prosper. To equip the industry for the challenges ahead, we’re making a priority of investing in training and skills.
The Crossrail Tunnelling and Underground Construction Academy is teaching a new generation of engineers and we’re looking for a location for the new High Speed Rail College.
From 2017, the college will teach some of the brightest engineering and construction students in Britain providing them with the specialised training and qualifications they need to work on HS2 and other infrastructure projects.
In the long term, we want to export British high speed rail expertise to other countries developing their own networks. Take for example, India.
The incoming administration just announced plans to modernise the country’s infrastructure over the next ten years, including rolling out a new high speed rail network.
Just last week we signed a memorandum of understanding with the Chinese to promote further co-operation on rail projects in both countries. This will ensure British firms have a fair opportunity to compete for business in the massive development of High Speed Rail in China.
In total, over 15,000 miles of High Speed rail are planned around the world so there are exciting opportunities for us to expand into new markets.
These are just some of the plans we have to put Britain’s rail industry at the forefront of global innovation. But in truth, it will be down to the industry itself to make that vision a reality. Government can build a stronger, more resilient economy and government can provide the right support and investment.
But it’s your drive and ambition that will make the industry prosper. It’s your business instinct that will root out inefficiencies and make the industry competitive. And it’s your know-how that will identify and take advantage of gaps in the market.
As these awards show, the spirit of innovation is alive and well in UK rail. The variety and quality of entries is exceptional. So I’d like to congratulate all of the finalists and winners for what they’ve achieved.
Your innovations may not always be visible to the travelling public but they are critical importance to the future success of Britain’s rail industry and on this evidence, we have good reasons to be optimistic.
Thank you.