INTRO: Antoine Hurel, Chief Executive of Connex Rail, part of the French-owned CGEA group, briefed Murray Hughes on progress with the group’s two British franchises
MANAGING two large franchises that are mainly dependent on London commuting was always going to be a challenge. Connex Rail Chief Executive Antoine Hurel looks back on the two years since taking over Connex South Central followed by Connex South Eastern in October 1996 with some satisfaction: ’we have increased the number of trains, increased patronage and improved performance.’ But he admits to being ’disappointed with performance in the last quarter of 1997, although it was extremely good compared to what we inherited, and we have achieved very promising results.’ He also concedes that his management team underestimated the number of problems, many of which were unexpected: ’we thought we could solve the problems in one year, but we did not; we are probably facing a very long term challenge.’
In terms of achievements, Hurel reckons ’we have a lot to be proud of, but my feeling is there is an expectation that we should be quicker in delivering long-term results.’ Remarking that the organisational matrix developed for privatisation is ’very complicated, but sound’, he says that Connex is now ’totally reorganising the business, decentralising to give local focus.’ There are 11 commercial, nine operating and four engineering ’decision centres’ or business units arranged in a horizontal structure ’so that managers can take their own decisions’.
Hurel thinks ’we have been successful enough to feel enthusiastic about continuing’, a reference to the group’s wish to extend its seven-year CSC franchise. But he is concerned that performance levels have not been maintained, attributing much of the blame to unexpected difficulties with the availability of Networker trains on CSE. ’They were the last product of the old industry - everybody had to have a little piece of the work, and this means there are interface and co-ordination problems. We were not successful in anticipating endemic problems, and incompatibility is very difficult to cope with.’
He sees the Networkers as symbolic of a ’dying configuration’ of the supply industry, which has since undergone a ’rebirth’ with products like the Electrostar, which Connex has ordered for its CSE franchise. Adtranz, which is ’really motivated’, is due to deliver the first of 30 sets in April next year, with all on CSE tracks by the end of 2000. These will be dual-voltage trains, which means that ’the possibility of leasing them to other TOCs is very high’, especially as they will have ’a 30-year guarantee for maintenance and performance’.
Financial arrangements for the acquisition have yet to be completed, but Hurel affirms that ’we have definitely bought the trains and we have made the first payment. We are in the final stage of negotiations with three very serious candidates for a leaseback arrangement.’ Having involved Railtrack ’very much upstream’, he does not anticipate delays from safety case problems.
Anxious to put the trains into service as soon as possible to ease the current capacity and overcrowding problems, Hurel says CSE has seen ’an upsurge in traffic , 9% up from Sevenoaks and 17 to 20% up from Ashford and Hastings.’
In terms of running extra services, most have been on CSC where Connex began with 1450 weekday trains, rising to 1582 in winter 1996-97 and 1710 in summer 1997. This included a frequent interval ’South London Metro’ service, built on the assumption that a restructuring package would be agreed with CSC drivers. In the event, it wasn’t, forcing CSC to cut back to 1640 for the winter 1997-98 timetable. The deal was finally stitched together in March this year, and the service is being relaunched as Connex Metro this month.
Hurel confirms that ’we intend to keep at least this level for the rest of the franchise’ and perhaps improve it further. He points out that ’if we are to succeed in pushing subsidy down, it cannot be done simply by cutting costs - we have to give the customer what he wants, which means more trains, safe trains and clean trains; it is not just a question of take the money and run. We are a public service, and we want to maintain our business for a very long time and consolidate our reputation.’
Hurel is particularly pleased with the service launched last June from Gatwick Airport that penetrates deep into the National Express owned Silverlink franchise at Rugby. In the first month the near-hourly trains carried 18000 passengers, but by December this had peaked at 102000, dropping back to 93000 in March 1998. Many passengers use the London Travelcard, but the lag in apportioning Travelcard revenue between operators means that Connex has not yet enjoyed the full revenue benefits.
No other cross-franchise routes are in prospect for the moment. Instead, Hurel says Connex will concentrate on a ’product approach’ with a standard palette of products across both franchises. The group plans ’joint marketing of the Connex Metro on both franchises’, perhaps with increased frequency and new services. ’We want it to appear as an integrated service with at least four trains an hour on each route.’
On a par with the success of the Gatwick - Rugby route is the hourly Connex Express service using refurbished Class 319 units timed to link London Victoria and Brighton in under 50min. This is carrying 6000 passengers/day, with ’traffic up 12% in less than a year’. From this month the service becomes half-hourly off peak.
While traffic and revenue may be rising, Connex faces serious erosion of revenue because of fares evasion, especially in south London. Hurel estimates that ’the level of ticketless travel in suburban areas is 10% or more’. To combat this ticket gates have been installed as pilot projects in Balham and Sutton, and will be fitted shortly at Bromley South. At Balham, revenue has risen 24%. Of this 13·5% is reckoned to be ’local traffic growth’ with the rest being the deterrent effect of the barriers. The gates cost £250000 to install in January 1997, and were considered to have paid for themselves by March 1998.
Hurel suggests that the gates have other benefits. ’They also bring a higher level of security’, keeping ’undesirable people off the railway’ and helping to achieve an environment ’where there is normal civil behaviour’. Assuming that the pilots are considered successful, Connex will ’possibly install gates at all major stations’.
It has, however, had no effect on the anti-social behaviour of passengers in distributing large quantities of unsightly litter all over trains and stations. The problem has grown because Railtrack’s contractors tasked with clearing up the mess on the tracks appear to work only on rare occasions, and they only have access to the tracks if the power is switched off and a total possession is obtained. If the problem is to be resolved, Connex will need to enforce its contracts with Railtrack and its cleaners more effectively.
Performance regime in question
Of major concern to Hurel is CSC’s performance regime with Railtrack, which he considers to be biased heavily towards the infrastructure company. ’I am not opposed to the performance regime, but the benchmark was not set properly.’ To support this claim he says that in the 22 benchmarked periods since May 1996 for the five Railtrack service groups involved, ’only one was higher than the benchmark - it does not reflect the average performance of Railtrack. We have even been through two leaf fall seasons, and neither triggered the benchmark, but Railtrack has not made any investment.’
Hurel says that Railtrack simply pleads caveat emptor. CSC’s attempts to resolve the disagreement through the Disputes Resolution Committee failed when the committee found there was ’no practical evidence of a mistake’, and Connex has now taken the issue to appeal. Hurel says ’it is a very serious issue’ because it affects CSC’s planned franchise extension - and the new rolling stock that may go with it. Not only that, but it ’correlates with the level of fares increases, which have been used to pay Railtrack. We proposed a deal to Railtrack which, had it been accepted, would have meant we could have raised fares a lot less.’ But he concedes that Railtrack is unlikely to agree because of the fear of a ’domino effect with the other TOCs’.
A way forward is still being sought with Railtrack and the Office for Passenger Rail Franchising, and Hurel’s ’hope is to find new grounds for a 15-year contract with compensation for the past and a new performance benchmark for the future. This would be a win-win partnership.’ Plans for the franchise extension, which is ’built-in’ to the existing franchise, include new trains, new services and improved performance. Subject to the Railtrack issue being resolved, Connex plans to have a formal submission into Opraf by this month. Among possible improvements is electrification of Ashford - Hastings line and the branch to Uckfield.
Asked if he had any plans to try and generate more rail travel on Sundays by persuading Railtrack to carry out maintenance work more efficiently and not close down large sections of both the CSC and CSE networks every weekend, Hurel felt he had enough problems with Railtrack already: ’they are very difficult to deal with’, he said. ’We would prefer to be responsible for day-to-day maintenance of the tracks where we are the main users, but that would be in an ideal world.’ o
CAPTION: Class 365 Networker Express EMUs have allowed Connex to improve the quality of some trains operating into Kent. Renewal of the remaining slam-door fleet may be in the form of the Adtranz ’Classic’ rebodying proposal, or by exercising an option for 800 cars in the Electrostar contract
CAPTION: Although the bulk of Connex services are focused on the commuter regions south of London to the English Channel, Connex has also successfully introduced services from Gatwick to Watford, Milton Keynes and Rugby (map right)
CAPTION: Connex depends on the work of Railtrack’s subcontractors to ensure a pleasant station environment, but litter on tracks has become a widespread problem. It is difficult to rectify as safety rules now require the third rail power supply to be turned off before cleaning staff are allowed onto the track
Connex in profile
Connex South Central
Franchise runs from May 1996 for 7 years; extension sought for a further 8 years
Network: 800 route-km, 221 stations
1997 turnover (fares and subsidy): ú291m
Passenger journeys (1997-98): 93·4 million
Passenger-km (1997-98): 2166 million
Rolling stock: 905 EMU and DMU cars
Weekday services run: 1640
Connex South Eastern
Franchise runs from October 1996 for 15 years
Network: 773 route-km, 179 stations
1997 turnover (fares and subsidy): ú389m
Passenger-journeys (1997-98): 117·3 million
Passenger-km (1997-98): 2419 million
Rolling stock: 1336 EMU cars
Weekday services run: 1681