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Northern Ireland Railways Strategic Review

NIR Strategic Review
Summary Report
March 2004

EXECUTIVE SUMMARY

Introduction & Overview

The purpose of this Strategic Review of Northern Ireland Railways (the Review) is to consider and evaluate options for delivering the long-term railway requirements for Northern Ireland (NI).

Translink commissioned this Review, with the support of the Railway Review Group (RRG), with the purpose of informing Translink and Government of the wider economic and social costs and benefits associated with future investment options in Northern Ireland Railways (NIR).

The primary purpose of this Review which, comes at a critical time in Northern Ireland Railway’s development, is:

To provide the supporting business case for continued investment in the railway over the next twenty five years; and
To ensure that the railway can continue to play a key role in the transport task for Northern Ireland in a manner which is both financially responsible and sustainable.

In undertaking the Review, there was recognition that there is clearly a need to demonstrate the value of rail if further investment is to be secured. Investment in the railway must compete with investment proposals from various other sectors of the NI economy.

NIR is a small vertically integrated railway operating in a highly competitive environment. NIR plays an important complementary role in the broader social elements of the Northern Ireland community. NIR provides services to a wide spectrum of the community for a range of purposes, including journey-to-work travel, social travel and travel to access community facilities and services.

Opportunities to exploit the benefits of rail transport can be maximised by implementation of efficient operations and effective longer-term investment planning and asset stewardship. It needs to be recognised that in the case of NIR there are no ‘quick fixes’. Unlocking the potential of rail transport in Northern Ireland may well require a ‘step change’ rather than an incremental approach to planning and investment. Furthermore, the nature of the NIR network dictates that performance will vary across the railway influenced by the relationships between distance, cost allocations, service levels and patronage volumes and distribution.

NIR – one of the world’s smallest publicly-owned and operated passenger railways:

Operating route length of 189.5 miles (approx. 303 km).
Operating track length of 272.5 miles (approx. 440 km).
Approximately 46,000 passenger trains run annually.
6.5 million passengers journeys in 2002/03.
Approximately 156 million passenger miles.
Annual ticket revenue of almost Ł16 million.
Total annual expenditure of approximately Ł34 million.
Nearly 700 operational and systems maintenance staff.
The NIR “catchment” accounts for approximately 75% of the total Northern Ireland population.

NIR suffers from a number of operational limitations which impact upon its performance. Whilst significant investments have been made since the late 1990s, much of the railway infrastructure is characteristic of a ‘legacy’ railway with aging assets, a high proportion of single track, numerous user crossings and variable track geometry.

Northern Ireland Railways compares generally well against a number of its peer group members in terms of broad performance indicators such as:

Train miles per driver;
Operational punctuality;
Average customer receipts;
Operating subsidy per passenger mile; and
Journeys per route mile.

NIR plays a significant social function in the Northern Ireland community as evidenced by passenger profile data:

Over half of all passengers are aged between 16 and 34 years;
Almost half of all passengers are in employment;
Over one third of passengers are commuters; and
Half of all passengers fall into the ABC1 socio-economic group – more than either Ulsterbus (36%) or Citybus (now Metro) (43%).

Strategic Options

Translink is faced with a number of strategic options for the development of NIR:

The realistic ‘do minimum’ option which is defined as:
- Introduction of timetable and operational modifications associated with new passenger vehicles which will result in changes to service headways and journey times across parts of the NIR network; and
- Introduction of an assets renewals programme for the replacement of life-expired assets with modern equivalent assets. Included within this asset renewals programme are some elements ‘driven’ by legislative commitment such as the introduction Train Protection Warning System (TPWS) and the provision of enhanced accessibility facilities at stations consistent with the Disability Discrimination Act. Furthermore, the programme includes the removal of accommodation level crossings for safety risk reasons consistent with the recommendations of the AD Little report.

The ‘do minimum’ option is referred to in this Review as the “Steady State”.

The ‘do something’ option is: radical expansion of the service offering of NIR – the “Expanded Offering” option (the Vision Timetable).

Consideration of closure of parts of the network also constitutes a possible future for NIR.

The expanded service offering has been developed with the customer at the heart of the plan, with the service offering based upon the following guiding principles:

Enhanced train performance and service reliability;
Increased service quality and frequency for customers;
Improved asset utilisation and productivity gains;
Reductions in the cost to Government per passenger journey;
Transfer of journeys from road to rail; and
Better on-going stewardship of assets that make up the rail network and supporting systems.

The major cost elements of the ‘Do minimum’ option are those associated with putting in place an effective asset renewals programme:

The 25 year total cost (including Optimism Bias factors) for the NIR “Steady State” asset renewals programme is Ł533 million (including Ł181 million on those sections north of Ballymena and north of Whitehead);
Capital items associated with replacement trains and items to meet safety and related requirements totalling Ł112 million; and
Additional operating and maintenance costs of approximately Ł6 million annually.

The “Expanded Offering” option builds on from the “Steady State” in that it involves an estimated Ł52 million in additional capital expenditure over a twenty five year period. Additional O&M costs associated with the “Expanded Offering” option amount to Ł231 million (or an average of Ł11 million per annum additional NIR operations costs ‘over and above’ current expenditure from 2006/07). The level of long term patronage for NIR associated with underlying growth in economic activity will not be sufficient to meet public policy transport targets as developed in the Regional Transportation Strategy:

The underlying demand growth indicates an expectation of growth of approx. 48% over the next 25 years (from 6.5 million journeys to 9.6 million in 2028/29).

The “Expanded Offering” option indicates a substantial uplift in NIR patronage ‘over and above’ the “Steady State” associated with a radical enhancement in services. The “Expanded Offering” growth forecast indicates Total NIR patronage raising from 6.5 million in 2002/03 to 13.4 million in 2028/29 – an average annual rate of 3.0% (Compound).

Detailed analysis indicates that only the “Expanded Offering” option is likely to deliver significant net economic benefits to the Northern Ireland community. Closure of the “Non-core” parts of the network¹ could deliver net gains in the medium to longer term albeit in the face of considerable community resistance.
¹For this Review, defined as those sections north of Ballymena and north of Whitehead.

Summary of Main Findings

In the absence of an effective and efficient NIR, the community of Northern Ireland would be worse off.
NIR provides services to a diverse range of customers across Northern Ireland and into the Republic of Ireland.
Limited scale economies and restrictions associated with substantial single track sections strongly influences the potential of the NIR network.
Even allowing for obvious limitations, NIR performs well for various indicators against members of its peer group.
In order to realise the full potential of the railway, it will be necessary to put in place an investment programme that incorporates a ‘life cycle’ approach to asset renewal and stewardship.
Recent investment initiatives (commenced in the late 1990s) have not yet fully redressed the historical infrastructure deficits.
Capital investment alone will not deliver the railway necessary for Northern Ireland’s future. A better performing railway will require enhanced management practices, improved marketing and improved service quality across all aspects of the business.
A well planned and executed asset renewals programme combined with improved fleet utilisation will provide NIR with the sound basis from which to
build on in order to successfully deliver significant benefits to customers and the wider NI community.
The benefits of investing in NIR will flow to both users and non-users of railway services in Northern Ireland and will include elements such a travel time savings, reduced traffic accident costs and environmental benefits.
The draft new timetable (“Steady State” option) does not represent a level of service offering sufficient to radically alter NIR’s future and deliver net economic benefits from the substantial investment involved.
The “Expanded Offering” option delivers a net economic benefit to the NI community and includes an expectation of increased rail market share and a
lower average PSO per passenger journey. The “Expanded Offering” represents good ‘value for money’ albeit with a risk and uncertainly profile that will require management and monitoring.
The move from “Steady State” to the “Expanded Offering” option delivers a quantum uplift in total benefits for a relatively modest total cost increase. In
essence, the majority of investment (in particular, the twenty-five year asset renewals programme) is required under the “Steady State” option and the
renewals requirement common to both options.
The case of the “Non-core” parts of the network is not clear cut when broader social, environmental and economic factors are considered. The financial case for retention of services is not strong, as the sections involved will require an estimated Ł181 million in asset renewals over the next twenty-five years. However, under the “Expanded Offering” option long term PSO per passenger on the “Non-core” is forecast to decline slightly.
The “Expanded Offering” includes the “Non-core” sections of the network and
clearly represents the preferred investment strategy.
The network of NIR represents an important strategic asset for future generations and should be subject to appropriate safeguards. This includes the lightly-used parts of the network. Furthermore, there may in the longer term emerge a case
for development of parts of the existing network to serve NI’s major airports – both of which are contiguous to the existing NIR network.
The ideas currently emerging in Great Britain with respect to the future of rural lines whereby they would benefit from greater local involvement in their
marketing, management, and operation needs consideration in the Northern Ireland context.
Adoption of the “Expanded Offering” will necessitate implementation of a wide range of supporting practices and management initiatives to ensure that delivery risks are managed effectively and that the full benefits of the investments are captured for the wider NI community.

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