'The next train to arrive at Platform 1 will take you anywhere you want'
The railway we love to hate is changing track. Ian Griffiths reports on Virgin's strategy of integration
Sunday 08 June 1997
But this one small order for MPs represents a giant leap forward for rail travel in this country. Once the Order is approved it will pave the way to transform travel patterns in the North and Midlands, bringing Manchester within five hours and Birmingham within four hours of Paris by direct train service.
These remarkable journey times will be made possible by approximately 700 metres of twin-track railway just north of London's St Pancras station. This little section of track provides a crucial connection between the planned rapid rail link between London and the Channel Tunnel and the West Coast Main Line serving the Midlands, North-west and Scotland.
Thursday's parliamentary Order seeks authorisation to proceed with the twin-track connection which will allow Eurostar passenger trains which have just sped from the Continent to go directly North rather than making their time-consuming way into St Pancras and reversing back out again.
The Order also seeks approval for the construction of an international station on the rapid rail link to the Channel Tunnel at Stratford in East London.
In the past both proposals have received widespread parliamentary support. The ability to make the fast rail link to the Channel a benefit for the whole country rather than just the South-east has been applauded. There will also be substantial economic regeneration around Stratford and right along the 68-mile route. There will also be benefits for existing commuter trains in Kent; their journey time from London to Dover will be cut by 40 minutes to one hour and 10 minutes.
What is even more remarkable is that despite the size of the construction project the impact on the environment will be minimal. Some 85 per cent of the route will either be in a tunnel or alongside existing transport corridors.
Executives at London & Continental Railways, which won the right to design, build, finance and operate the Channel Tunnel Rail Link (CTRL) and operate the Eurostar high-speed rail passenger service in 1996, are hoping that the Order will receive overwhelming parliamentary support for proposals which offer significant economic benefits but without significant environmental costs.
The benefits from the CTRL have been estimated at over pounds 6bn and could lead to the creation of 80,000 jobs. These are significant gains, and they do not include the more intangible benefits from the creation of an integrated rail network.
The integrated rail network is at the heart of the thinking of Richard Branson's Virgin Trains. His Virgin Group is a major shareholder in London & Continental Railways. Virgin Trains, meanwhile, operates separately the Cross Country and West Coast Main Line rail franchises in the UK. However, Virgin was an investor in London & Continental long before it began bidding for rail franchises.
The involvement with Eurostar and the CTRL perhaps sowed the seeds for the vision of an integrated rail network which drives Virgin's thinking.
Once London & Continental had secured the right to build and operate the CTRL, Virgin turned its attention to the UK railway franchises which were being sold off. The big prize here was the West Coast Main Line, given its importance to Eurostar.
However, Virgin recognised that if it was to fulfil its ambition to create an integrated network it needed more than just a minority stake in Eurostar and the West Coast Main Line. Its analysis drew Virgin towards the Cross Country franchise, which was very much the poor relation of the sale auction. Although Cross Country had an extensive route network (the longest journey - Dundee-Penzance - is about 700 miles) it had no obvious core. The franchise extends to major cities including Liverpool, Manchester, Edinburgh, Glasgow, York, Birmingham, Swansea and Plymouth. Extensive certainly, but vulnerable also to competition on a quite grand scale.
While others shied away from this apparently unattractive proposition, Virgin thought laterally. The main competition came from the West Coast Main Line which was already top of its wish list. The geographical overlap was seen not as a source of competition but also as an opportunity for integration.
Further, the Cross Country franchise, along with the West Coast Main Line, both had 15-year operating periods as against the seven years on offer for most franchises. Virgin knew that if it could capture both it would be able to develop a 15-year business plan based on integration. One final point convinced Virgin that Cross Country was the perfect fit for the West Coast Main Line; Cross Country had an aging rolling stock which was in desperate need of upgrading and replacement. Virgin knew that the West Coast Main Line also needed significant new rolling stock, not least the acquisition of high-speed tilting trains which could take advantage of planned track upgrading. The prospect of integrated rolling stock with an integrated Inter City fleet beckoned.
At the end of November 1996 Virgin was awarded the Cross Country franchise. Less than three months later it secured the West Coast franchise.
Only then did the ingenuity of the Virgin approach begin to dawn on rivals. The two franchises have essentially been integrated under a common management in a single headquarters. Separate legal undertakings have been maintained in order that their obligations as franchise holders can be properly monitored. However, the concept of the integrated rail network is already becoming a reality.
In essence, this involves providing a service which equates with the journeys travellers actually want to make. Given that most people simply want to get from A to B, the integrated approach is premised on making that journey as smooth, seamless and convenient as possible.
Last month Virgin opened its national ticket telesales office in Edinburgh, which can provide tickets for and details of services right across the national rail network. It is a cornerstone of the integrated philosophy.
In time, Virgin has ambitions to go further and consider integrated transport, not just integrated railways. Already it is looking to see if it can imitate the Dutch, where 46 per cent of rail travellers arrive at the station on a bicycle. Already Virgin is planning more bike racks at its stations and more storage space aboard trains. At Preston it is experimenting with a taxi-ride as part of an all-inclusive business ticket. There are parallels here with the courtesy limousine Virgin offers to its business class airline passengers, but that is not a surprising; Virgin believes the railways have much to learn from the airlines.
The hub-and-spoke concept which is already familiar to air travellers will begin to feature in Virgin's rail plans. Already it regards Birmingham as the hub of its train operations, offering regular services to other cities. London & Continental has a similar philosophy.; it sees the new station at Stratford as a hub.
Looking across the Channel, a similar role could be envisaged for Lille in Northern France, which would act as the staging post for rapid rail travel throughout Europe. St Pancras, the terminus for the new fast rail link to the Channel, will also have hub attributes. Virgin is already talking to London & Continental about moving some of its services a few hundred yards east to terminate at St Pancras rather than at Euston station.
Again integration is the key. Both Eurostar and Virgin will be running services on the West Coast Main Line. The Eurostar services will go straight to Paris and Brussels using the twin track link to the CTRL. Virgin, for its part, will pick up passengers at intermediate stations and whisk them at 200kph on tilting trains to St Pancras, where they will stroll across the platform on to a Eurostar service which can make the journey to Paris in just two hours and 20 minutes.
Do not begin to believe, however, that the Virgin relationship with London & Continental is perhaps a little too cozy. In fact both teams are extremely careful to keep the relationship at strict arms length in commercial terms. The fact is that Eurostar wants to run services up the West Coast Main Line and is therefore keen to work with the franchise operator. The operator happens to be Virgin. However, it is the ownership of the franchise rather than the ownership of a bunch of London & Continental shares which brings the two together.
Over the next few years, however, they will share a common interest in their mutual progress. Construction of the pounds 3bn CTRL is expected to start early next year, with the link opening in mid-2003. The pounds 2bn investment programme to upgrade the West Coast Main Line to allow high-speed tilting trains to cut journey times substantially is due to be completed by 2002.
The railway network of the future will be very different to the one we have grown accustomed to. The Virgin vision of an integrated railway is one which is likely to be followed by other franchise operators. With over two-dozen different franchises, there is every likelihood that there will be a significant consolidation as the weaker operators are consumed by those which can offer integration benefits to their customers.
Ultimately we may end up with as few as four or five rail operators who can offer passengers services which are much more closely tailored to their needs. In this case, less choice will not necessarily mean poorer service. Indeed as passengers become accustomed to travelling at speed in modern, comfortable trains, they will become more demanding. Only those franchises which can deliver excellence in customer service will survive.
For years the British have been accused of loving railways but hating trains. The introduction of the integrated rail network may at last reverse this, to the extent that the love of trains is equal to, or even greater than, the love of railways.
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