Oral statement by the Rt Hon Philip Hammond MP, Secretary of State for Transport.
With permission, Mr Speaker, I wish to make a statement on the government’s plans for extension of the electrification of the Great Western Main Line and for the procurement of a replacement for the existing diesel intercity trains. These two issues are closely connected.
I turn first to the provision of a new generation of intercity 125 mile per hour trains to take advantage of the electrification of the Great Western Main Line and to allow the phasing out of most of the ageing diesel ‘Intercity 125s’.
In February 2009 the Intercity Express Programme, launched by the previous government, identified Agility Trains, a consortium of Hitachi Rail (Europe) Ltd and John Laing Plc, as the preferred bidder to provide a new fleet of intercity trains. Subsequently, the previous government placed this process on hold and ordered a review of the procurement by Sir Andrew Foster.
Last summer, recognising the fiscal challenges the UK faces and also recognising the impact of the new government’s plans for high speed rail to Leeds and Manchester, Agility put forward an improved, lower cost, proposal, which provides the required service through a mixed IEP fleet: some all electric trains; and some with a combination of electric and diesel power, allowing them to operate through services beyond the electrified railway. This proposal retained the more modern electric Intercity 225s on the East Coast Main Line, as the previous administration had proposed.
We have reviewed this proposal against the alternative of an all-electric fleet, with purpose built diesel locomotives being coupled to trains to haul them beyond the electrified railway.
Either way, this would represent a multi-billion pound investment for this country underpinning the operation of intercity services on the conventional railway for many years to come, and it is imperative that the right choice is made.
As I said at the time of my statement to the House on 25 November, there were complex legal, technical and commercial issues to be addressed. Both the government and Agility Trains as preferred bidder recognised this.
Over the last few months we have worked together on these issues and I can now announce that I am resuming the IEP procurement and proceeding with the proposal that Agility Trains have put forward as preferred bidder.
We will now work with Agility Trains with a view to reaching financial close by the end of this year. This is, of course, subject to the government continuing to be satisfied that the proposal offers value for money as the commercial negotiations are concluded and that the final arrangements are compliant with the United Kingdom’s EU obligations.
This deal will allow us to provide better, faster, more comfortable services and to continue providing through-journeys between London and parts of the rail network which are not electrified.
In total, there will be over 11,000 more peak time seats each day on the Great Western Main Line and East Coast Main Line post IEP, compared to today.
Hitachi is today confirming its plans to locate its European train manufacturing and assembly centre at Newton Aycliffe in County Durham. This investment is expected to create at least five hundred direct permanent jobs as well as hundreds of temporary construction jobs. Thousands more job opportunities will be created in the UK manufacturing and service supply chains.
Coming just days after the news of the re-opening of the Redcar Steel Works, this is a massive - and very welcome - shot in the arm for the skilled work forces of the North East’s industrial heartland.
I turn now to the related issue of electrification of the Great Western Main Line. I announced to the House on 25 November that, over the next six years, Network Rail will electrify the commuter services on the Great Western Main Line from London to Didcot, Oxford and Newbury. I recognise that this announcement, although welcomed in the Thames Valley, left unanswered the clear aspirations of rail users further west for the extension of electrification to Bristol and into Wales. I and my Rt Hon Friend the Secretary of State for Wales have subsequently considered the options for extending electrification, alongside the government’s consideration of the proposals for replacement of the current diesel Intercity trains, and in close consultation with the Welsh Assembly government.
We have concluded that there is a case for extending electrification westwards to Bristol and Cardiff and I am today asking Network Rail to add this major extension to their electrification programme immediately.
This is good news for Wales and the South West - against a backdrop of public spending constraint as we deal with the legacy of debt we have inherited. Bringing electrification to Cardiff will mean that we are linking, for the first time, the capital cities of England, Scotland and Wales by electrified rail.
These measures will deliver a London to Cardiff journey time of an hour and 42 minutes and will shave 22 minutes off the London to Bristol journey.
I have received representations calling for electrification of the Great Western Main Line to be extended as far west as Swansea and we have looked carefully at the arguments. The business case for electrification is heavily dependant on the frequency of service. Services between London and Swansea currently operate at a frequency of only one train an hour off-peak. There is no evidence of a pattern of demand that would be likely to lead imminently to an increase in this frequency. Consequently, I regret to say that there is not, at present a viable business case for electrification of the mainline between Cardiff and Swansea.
But, because of the decision to proceed with Agility’s proposal for a bi-mode train, journey times from London to Swansea will be shortened to two hours and 39 minutes - 20 minutes faster than today - with trains switching automatically to diesel power as they leave Cardiff. Because the constraining factor on the South Wales Main Line is speed limitations dictated by the geometry of the line, there would be no time saving benefits from electrifying the line from Cardiff to Swansea.
However, the policy of the government is to support a progressive electrification of the rail network in England and Wales, for environmental, among other reasons. My Rt Hon Friend, the Secretary of State for Wales, and I will therefore keep under active review the business case for future electrification of the Great Western Main Line between Cardiff and Swansea in the light of developing future service patterns.
I have a further announcement to make to the House. In the course of the examination of the case for electrification in South Wales that I and my Rt Hon Friend have undertaken, we have established, at an initial high level, that a good case appears to exist for electrifying the key valley commuter lines north of Cardiff via Pontypridd and Caerphilly to Treherbert, Aberdare, Merthyr Tydfil, Coryton and Rhymney, as well as the lines to Penarth and Barry Island to the west. My department will therefore work with the Welsh Assembly government to develop a full business case for the electrification of the Cardiff Valley lines within the next rail investment control period beginning in 2014. The Welsh Assembly government will need, in parallel, to consider the case for specifying suitable electric trains for these routes when the Wales and Borders franchise is re-let in 2018. This would, of course, be a prerequisite for electrification to proceed, and the timetable for franchise re-letting, and re-specification, necessarily dictates the timescale of this proposed electrification.
On the basis of our preliminary evaluation, the Valleys electrification represents the best value for money rail electrification investment that can be made in Wales. It promises to bring all the benefits of electric commuter trains - faster acceleration, greater comfort and cleaner, greener travel, as well as greater reliability - to rail users in South Wales. It would have a significant effect on the economy of Cardiff and the Valleys - deepening labour markets, improving connectivity and significantly enhancing the attractiveness of the area to investors.
Coupled with the electrification of the Great Western Main Line, this represents a major boost to the economy of South Wales as a whole.
These three decisions, on Intercity Express, Great Western Main Line electrification and to build a business case for electrification of the Valley commuter lines, represent a major further investment in UK rail infrastructure - following the announcements I have already made on Crossrail, Thameslink, Tube upgrades, Thames Valley and North Western electrification and additional rolling stock.
They sit alongside the government’s proposals for High Speed Rail, the consultation on which I announced to the House in a written statement yesterday, as testimony to this government’s commitment to investment in the future of Britain’s railways.
They represent excellent news for passengers on the Great Western Main Line and the East Coast Main Line, for commuters on the Cardiff Valley lines, and for the economies of South Wales and North East England as a whole.
I commend this statement to the House.