Critical moment for the Cardiff and Valleys Metro

It seems increasingly likely that a decision by the Department of Transport regarding further rail electrification in south Wales will be made by the end of June. Those specific projects to be progressed will be included in the next England and Wales High Level Output Specification (HLOS) for Control Period 5 (2014-2019), due for publication over the summer.

As the Minister for Local Government and Communities Carl Sargeant confirmed in February, two very professional and robust business cases – one for the entire Valley line network and another for the Great Western Main Line to Swansea – were submitted to the Secretary of State for Transport, Justine Greening, earlier this year. Since then, Ministers and their officials at both Westminster and Cardiff Bay have been in regular discussion.

It would appear to me, that the electrification of the core valley line network – so the lines north of Cardiff, but not Ebbw Vale, the Vale of Glamorgan line or the main line to Bridgend or Maesteg – probably has the most compelling business case of all the candidate schemes being considered across England and Wales. On that basis, this scheme would almost certainly be included in next High Level Output Specification.

However, the full Valley line network – including Ebbw Vale, Maesteg, the Great Western Main Line to Bridgend and the Vale of Glamorgan line – while still having a strong case, may not be as compelling as that for other candidate projects across England and Wales. A particular competing case has been developed to electrify the Midland Main Line to Nottingham, Derby and Sheffield.

I surmise, therefore, that this definition of Valley Lines electrification is not guaranteed inclusion in the High Level Output Specification. However, this decision is also dependent on the procurement of the new Inter City Express Trains (see below).  There is also a strong lobby for the Midland Main Line scheme at Westminster culminating in a recent debate on the subject in the House of Commons.

I am concerned that the wider strategic economic benefits that could accrue from the electrification of the entire Valley lines network have not yet been fully appreciated by the Minister Justine Greening. The briefing from Department for Transport officials may have focused more on the direct costs and benefits of the project. For example, new and/or cascaded electric rolling stock are less costly to run and maintain, reducing operational costs by as much as 20 per cent.

Yet, although these benefits are important, they are not as strategically important as addressing such issues as access to employment, transport poverty, and social inclusion. These are serious challenges for some communities in the Head of The Valleys that could, in part, be addressed by the enhanced connectivity that would result from more frequent and faster rail services across the region. On that basis the case for full Valleys line electrification must be the most compelling of all the schemes under consideration.

A decision is also due shortly on the procurement from Hitachi of new Inter City Express Trains for the Great Western Main Line, Midlands Main Line and East Coast Main Line. This may have a bearing on electrification of the Great Western Main Line to Swansea (as well as the Midlands Main Line).

It is possible that, based on an up to date analysis, the Department for Transport will decide that it will be more cost effective to procure less bi-mode Inter City Express Trains (and so procure more of the less costly electric only versions) and extend Great Western Main Line electrification to Swansea and the Midlands Main Line to Sheffield. This will have an impact on in the Valley Line Electification decision. Many industry commentators have also come to this view.

I understand officials from the Welsh Government and the Department for Transport are still in regular discussion to try and get through the detail to find a funding package for the wider definition of the Valleys Network. When one delves into Train Operating Company subsidies, track access charges and financing the Regulated Asset Base all this gets pretty complex. It may be the case that additional sources of funding will need to be identified to secure Treasury support. So, it appears that a degree of flexibility is being shown by all parties and that there is still time to influence the decision by The Secretary of State for Transport.

It is incumbent on us all in the business community to make the case for the strategic and economic benefits that can be secured by electrifying the entire south Wales Valley rail network and the Great Western Main Line to Swansea. For example, it is clear from conversations I have had with organisations like Admiral and Centrica that the commuting experience of their staff from all over south Wales has a direct impact on performance and productivity.

Data collated on staff retention and churn rates compared with employee’s home locations demonstrates a clear pattern. The longer, more difficult, and less reliable the journey to work, the higher the churn and lower the retention rates.  This has a bottom line impact as it drives up recruitment costs. Places like Ebbw Vale, Maesteg and Merthyr have the lowest retention rates because of their relative peripherality in terms of public transport from centres of employment in places like Cardiff.  Locations close to stations on the Valleys rail network and away from the network periphery were the best performing in relation to retention.

An electrified network will provide faster, higher capacity and more frequent services, thereby improving access across the region to employment opportunities in Cardiff and Newport. This will also be important to the success of the Cardiff Enterprise Zone, which will need to attract employees from across the whole of south Wales.

An enhanced network can also begin to address the issues of transport poverty in the region as set out in a recent report by Sustrans. This report identified that many people encounter significant difficulties in accessing work, education and healthcare due to a lack of available, affordable transport.  As the report states:

“Transport is key to enabling people to find and sustain employment; two out of five jobseekers say lack of affordable transport is a barrier to getting a job”.

better transport would provide the catalyst for a long-term economic regeneration of the entire Cardiff City Region whose GVA/head was only ~80% of the UK average in 2010.

Finally, the electrification project can be used as a catalyst for a more ambitious regional transport network that connects all the major settlements in the region with a high capacity, affordable, ‘turn up and go’, south Wales Metro. This will enable the major towns across the region to play a more equitable role in the economic regeneration of the wider Cardiff City Region.

This transformational economic project has now gained considerable backing.  A cross party motion secured unanimous support for the Metro concept in December 2011 and led to the establishment of a cross party rail working group in February 2012 chaired by Vaughan Gething AM. The Metro concept was also included in the Ministerial statement accompanying the revised National Transport Plan published in December 2011 and in March 2012. The South East Wales Transport Alliance has formally adopted the Metro concept.

This is now a critical time in the decision making process for Valley lines electrification. We all need to support the wider scheme and make a final effort to make our voice heard to ensure we get a positive decision.