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Viewpoint: All change please

Richard Walford says that revising railway station franchises could unlock vital investment.

Back in July the new government announced a review of the current model for railway passenger franchises. At the same time it commissioned a report from Sir Roy McNulty on how to achieve better value for money in the rail industry.

The reviews may unlock a significant source of work for the construction industry. One of the areas that Sir Roy is rumoured to be looking at is how railway stations are owned and operated.

Stations have not been shy of political attention in recent times.Some of you may recall the former Transport Secretary Lord Adonis’s Station Champions report published in November last year.

The report described the country’s stations as “mediocre”, following inspection visits which found that almost half of Britain’s national interchange stations fell short of proposed minimum standards.

“The management of our stations is an area where there is scope for efficiency gains and improvements”

While many railway industry players would challenge the objectivity of the Adonis report, they would also agree that the management of our stations is an area where there is scope for efficiency gains and improvements.

Surveying our national stations estate (some 2,500 odd locations), one is struck by the strategic value and importance of these locations. Many stations are situated at the core of our city and town centres. Yet one cannot help wondering why so often, instead of being a hub for vibrant new regeneration and development, they often lie neglected within dilapidated districts?

As always in the railway industry, the answer is complex and multi faceted. Funding is always an issue but other reasons include the lack of adequate regulatory incentives on Network Rail, the heavily regulated nature of station premises, the awkward split of responsibility and station ownership arrangements between Network Rail and train operators, and the short term leases granted to train operators coterminous with their passenger franchises.

The revised passenger franchise model offers an opportunity to address some of these concerns. Along with longer franchises may come longer station leases. Ninety-nine year full repairing leases have been mooted.

“Whichever direction the new DfT franchise model takes it has the potential to unlock a new era of station redevelopment and provide a welcome boost to UK engineering.”

Changing management structure also offers the potential to realign the split of responsibility for repair and renewstation assets. Removing this split and giving passenger operators greater control would encourage and facilitate operators’ abilities to raise capital and invest in station projects over the medium to long term.

On the other hand, the Department for Transport (DfT) may be looking at handing greater responsibility and control over stations back to Network Rail. It is argued that Network Rail has a long term interest in the stations estate.

It also has access to lower cost funding via its regulatory asset base and experience of delivering significant station regeneration in the 17 major stations already falling under its full management.

Sceptics, however, have voiced concerns about its consistency of commitment to improvement, its speed of response and its internal delivery structures.

DfT’s announcements are awaited with interest. Whichever direction the new franchise model takes it has the potential to unlock a new era of station redevelopment at a time which would provide a welcome boost to the UK engineering and building community.

■ Richard Walford is a partner at Burges Salmon

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