Stagecoach Group plc has announced that its subsidiary, Stagecoach South Western Trains Ltd ("SSWT"), has signed an agreement with Network Rail Infrastructure Ltd ("NRIL"), entering into an alliance to deliver rail services in the south and south-west of England.
A single senior joint management team is now responsible for both train and track on the Wessex route operating out of London Waterloo with the aim of delivering a better service for passengers and a more efficient, lower-cost railway through more collaborative working, better decision-making and fully aligned incentives.
The alliance, a first for the UK rail industry, has been formally approved by the Department for Transport ("DfT") and the Office of Rail Regulation ("ORR").
Sir Brian Souter, Chief Executive of Stagecoach Group, said: "This new model is a real opportunity to deliver change that will benefit both passengers and taxpayers and support our objective of growing the railway.
"Safety will continue to be our top priority and will remain at the core of the way we run the railway. In addition, by working more closely with Network Rail than ever before, and with aligned incentives, we can deliver a more customer-focused and more efficient railway for the long-term."
David Higgins, Chief Executive, Network Rail, said: "This marks a new phase in the evolution of Network Rail as we continue to push decision making away from the centre, empowering our front-line managers to run the railway more effectively, and forging closer working relationships with our customers, the train operators.
"Network Rail will continue to focus on delivering our obligations to all parties, protecting the interests of all customers whilst maintaining the seamless operation of the whole network."
The alliance has been set up to run until 4 February 2017, the expiry date of the SSWT franchise agreement.
Background and key principles
The alliance is consistent with the objectives of the McNulty Report of 2011 to reduce inefficiencies in the UK rail system, as well as the aspirations in the Government's Command Paper of March 2012, which signalled encouragement for closer co-operation between operations and infrastructure. Strong health and safety systems currently in place at SSWT and NRIL will remain under the alliance. A detailed organisational change and safety validation process has been undertaken, with independent scrutiny and ORR involvement. All aspects have been satisfactorily concluded.
The alliance builds on the existing joint working between SSWT and NRIL through the Wessex Integrated Control Centre at London Waterloo, which co-ordinates the operational response to incidents on the route, as well as recent moves by NRIL to devolve operational responsibility to regional units.
Both SSWT and NRIL will seek to achieve improvements to performance and customer service through the new structure. The combined management team will consider the "whole railway" perspective in making decisions on matters such as management and timing of infrastructure work and response to disruption.
The alliance will have responsibility for the safe, reliable and punctual operation of the Wessex network and SSWT services; maintenance of the Wessex infrastructure assets; maintenance, cleaning and servicing of the SSWT train fleet; and the operation and maintenance of all stations on the Wessex network.
Key principles of the alliance are:
• Both SSWT and NRIL will remain separate entities
• Employees will continue to have the same employer
• No changes to employee terms and conditions of employment or collective argaining agreements with recognised trade unions
• Each company continues to be ultimately accountable for its own areas of responsibility
• The interests of other passenger rail companies and freight operators are protected
Executive management team and governance board
The alliance senior management team will be headed by Tim Shoveller, currently Managing Director of Stagecoach South Western Trains. The executive team has more than 200 years' experience in the UK rail industry covering train service delivery, rail infrastructure management and train fleet manufacturing. It includes:
• Managing Director - Tim Shoveller
• Infrastructure Director - Jim Morgan
• Operations Director - Mark Steward
• Fleet Director - Christian Roth
• Safety & Assurance Director - Brian Cook
•Human Resources Director - Kelly Barlow
• Commercial Director - Sam McCarthy
• Customer Service Director - Jake Kelly
• Finance Director - Andy West
A governance board, with equal representation of both organisations, will oversee the operation of the alliance and take major business decisions.
The alliance includes an agreed financial baseline for the costs andrevenues of its activities, with cost savings and other out-performance relative to the financial baseline being shared equally between SSWT and NRIL. The agreement also includes a "taxpayer benefit" whereby the DfT takes a share of any financial upside generated by the alliance in excess of agreed financial thresholds.