Written Statement: Future of Rail update

I am writing to members to update on progress regarding the future of the Wales and Borders rail service and, specifically, the future delivery model Transport for Wales will be implementing which will allow us to adapt our plans to a post-Covid era. 

Firstly, despite the enormous challenges presented by Covid-19 and the particular challenges presented for public transport operators, as a government we remain absolutely committed to delivering our ambitious vision for a high quality, low carbon and integrated public transport network across Wales.  From the start of this crisis, we have provided steadfast support to the sector to ensure it was able to deliver critical services at the peak of the coronavirus pandemic and be prepared for the difficult winter months to come. Whilst rail passenger numbers dropped to as low as 5% of pre-Covid numbers at the peak of the pandemic, our support has meant that people who depend on public transport have been able to continue to use these services. 

As we have moved to ease restrictions, we have seen a gradual increase in passenger numbers, but clearly this will now be impacted by the resurgence of the virus and we are responding accordingly. However, it remains important that we plan for the post pandemic demand on rail services. 

The reality is however, that there remain some stark economic challenges for the rail and bus sectors not just in Wales, but across the whole of the UK and it is right that we work with all of our partners, including Transport for Wales, Keolis and Amey to ensure we provide the most stable platform possible from which to build back from this crisis, whilst continuing to deliver on our ambitious vision for the future of public transport in Wales. 

The delivery of key commitments, such as the creation of the Metro, the delivery of brand-new rolling stock for the Wales and Borders rail network and other improvements remain a priority for Transport for Wales and partners. This is in spite of the challenges we are currently facing as a result of the coronavirus pandemic. Transport for Wales continue to work closely with all partners and their supply chain to ensure they deliver our plans and services with safety as the top priority. 

A stable platform for building back better is dependent on the right delivery model, suitable for a post-Covid environment and I am pleased to inform members that Transport for Wales have agreed the principles of a new publicly owned model, which will allow them to continue to put customers and communities at the heart of everything they do, with safety as their first priority. I have approved the basis of a new relationship between Transport for Wales, Keolis and Amey which will be made up of three key components:

• From February 2021, the delivery of day to day rail services will be the responsibility of a new publicly-owned subsidiary of Transport for Wales, allowing government to have an even greater role in the delivery of rail services in Wales and the borders, reflective of the new commercial realities of the post Covid-19 environment. With huge uncertainty over passenger revenue, this provides us with the most stable financial base to manage rail services as we emerge from the pandemic.
• Infrastructure management and transformation of the Welsh Government-owned Core Valley Lines will continue to be delivered under the current contract. This will provide stability for the programme to ensure effective delivery of the south Wales Metro transformation work which is already underway.
• A new partnership with Keolis and Amey, led by Transport for Wales, will be developed, which will allow the people of Wales to continue to draw on the international experience and expertise of these partners to help TfW to deliver important commitments such as integrated ticketing, on demand transport systems, cross modal design and delivery, in addition to the ongoing integration of light and heavy rail.

This model will continue to help deliver our vision for a high quality rail service through effective vertical integration of track and train, building on the work already achieved through the transfer of the central Valleys Lines earlier this year.

I have asked Transport for Wales to start the detailed discussions and implementation based on the principles outlined in an agreement with Keolis and Amey. I have asked them to provide updates to members in due course, as the transition to the new delivery model gets underway. 

I want to be clear with members that there are some difficult days ahead and some difficult decisions ahead as we come to terms with the new economic realities of coronavirus. Many public services across Wales are now more expensive to deliver than they were prior to the crisis and this is true of bus and rail as a result of the sudden reduction in patronage, which is an important funding source for the network.  However, our ambition to continue to deliver a high quality public transport system remains, to ensure that our wider climate change and social justice priorities are met. Whatever the future looks like, good quality, integrated public transport is critical.

I am sure members will share our desire to see Transport for Wales and partners continue to deliver on our ambitious plans for the future and I hope that members will welcome this update which will create a platform for building back better as we all adapt to the post-Covid-19 world.