passenger rail: dataset on financial performance ... · annual rail funding and journey growth...
TRANSCRIPT
Passenger rail: Dataset on financial performance, passenger benefits, and value of
franchising model 1997/98 – 2011/12
1
Key data considerations
2
• In January, ATOC commissioned KPMG to collate the publicly-available industry data on passenger rail operations and analyse the key aspects of performance in the period since the introduction of franchising. • This dataset has since then been presented by ATOC to a broad range of experts and academics to verify its content and their feedback has been taken into account. ATOC published its report “Growth and prosperity: how franchising helped transform the railway into a British success story” in July 2013, which is based upon this dataset and should be read alongside it. • Retrospective annualised data is provided back to at least 1997/98 (the first full year of privatised rail operations), or as otherwise stated. Each graph and table is clearly labelled with its source. • All prices are 2012 prices, or as otherwise stated.
Financial performance – train companies
Aggregate TOC-controlled costs and revenue - 2012 prices
£bn real 1997-98 2011-12 Change
Passenger revenue 4.0 7.2 +3.2
Other TOC revenue 0.6 0.7 +0.1
Total TOC revenue 4.6 7.9 +3.3
Staff costs1 (1.3) (2.2) (0.9)
ROSCOS (1.2) (1.5) (0.3)
Other operating costs2 (1.5) (2.2) (0.7)
Total TOC-owned costs (4.0) (5.9) (1.9)
Surplus generated by train operations 0.6 2.0 +1.4
1 Since 1997-98, the aggregate number of staff employed by train operating companies has increased by 26% from 39,721 to 50,136 2 These include fuel, train maintenance, HQ costs among others Surplus generated by train operations comprises revenues generated by the train operators less those cost lines they can control (staff, rolling stock and other operating costs). It has been calculated to show the surplus generated by the TOCs before payments are made either towards the network’s infrastructure costs, their own shareholders or to/from Government. Slide 4 on the next page splits the “surplus generated by train operations” between the operating margins of TOCs and the payments either to Network Rail or Government. The analysis covers all TOCs and concessions, including those managed by DfT, Merseytravel, Scottish Ministers, the Mayor of London and the Welsh Government. Source: ATOC analysis of TOC accounts, ORR and GB Rail Financial Information 2011-12
Since 1997-98, 96% of the £3.2bn increase in passenger revenue has resulted from passenger growth (and 4% from changes in fares) 3
Since 1997-98, surplus generated from train operations has risen from £0.6bn to £2.0bn
■ These figures are before access charges are taken into account. The access charge framework put in place by Government ensures that any changes are revenue neutral to train companies – i.e. any benefits due to a charge reduction are returned, pound-for-pound, to Government. This is part of contractual arrangements set out in each franchise agreement.
0.2 0.3
0.4
1.7
0.0
0.5
1.0
1.5
2.0
2.5
1997-98 2011-12
£bn
Financial performance – train operations
The vast majority of the £1.4bn increase in surplus from operations has gone to Government, which has chosen to re-invest into the industry via Network Rail
Surplus generated from train operations
£2.0bn
£1.4bn increase since 1997-98: £1.3bn in net payments to NR £0.1bn in TOC operating margins
TOC operating margins Payments to Network Rail (net of subsidy received from /premia paid by Government)
Surplus generated from train operations
£0.6bn
Source: ATOC analysis of TOC accounts, ORR and GB Rail Financial Information 2011-12
4
Journey growth
Since 1997-98, annual growth in journeys has grown on average by c4%, compared to c2% in the 15 years beforehand
Passenger journey growth
Period Journey CAGR
60 years to 2011-12 0.58%
1982-83 to 1996-97 1.73%
1997-98 to 2011-12 3.98%
Source: National Rail Trends.
Rail journeys (y/e 31 March)
Train operations privatised between Feb 1996 and March 1997
5
External demand drivers
Source: National Rail Trends; ONS - GDP, Q4 2012 Dataset
Rail journey and GDP growth
Rail journeys per head of population
Year Annual journeys per capita
1982-83 11.5
1997-98 14.9
2010-11 22.4
Source: National Rail Trends; AA motoring annual motoring cost reports (data represents a car of 1,101-1,401cc price of £10k-£17k).
Source: National Rail Trends; ONS Mid-year population estimates
80
85
90
95
100
105
110
115
Index 1
997 =
100
Real rail cost per mile Real car costs per mile
Rail prices and motoring costs
53%
33% 27%
73%
0%
10%
20%
30%
40%
50%
60%
70%
80%
1982/83 - 1996/97 1997/98 - 2011/12
% M
ovem
ent
GDP Growth Journey Growth
6
Rail market share
Year Rail Journeys (billion passenger miles) Market share
1982-83 18 5.8%
1997-98 21.5 4.7%
2010-11 33.8 6.9%
Source: ATOC analysis, based on TSGB, NRT and BR Annual Reports
The growth in journeys has out-performed key external demand drivers.
Since privatisation journey growth has been more than double GDP growth and rail use per head of population has increased by 50%. At the same time, trends in rail fares and mileage-related motoring costs have been broadly comparable.
Rail average price per mile Motoring costs per mile
0
20
40
60
80
100
120
140
160
180
200
Index: 100=
1994
-95
Total Rail commuters into central London
Total LSE rail journeys
Growth and London South East
Rail usage in London and the South East has increased at a quicker rate than both the general growth in commuter numbers in the peaks and the rate of journey growth achieved by London Underground.
Journey growth
1997-98 to 2011-12 Journey growth
London Underground 41%
London and South East rail 73%*
* LSE figure is 72.5%, as distinct from 72.6% for overall national rail. Source: National Rail Trends; LUL Statutory Accounts
2010-11: 183
2010-11: 132
1997-98: 115
1997-98: 113
Source: TfL, Travel in London Report 5 – Central London Peak Count (CAPC) Supplementary Report, Supporting Workbook
Growth in rail journeys versus growth in commuter numbers
Rail compared to London Underground
7
Government investment
Annual rail funding and journey growth (2012 prices)
Source: National Rail Trends; Network Rail / Railtrack Plc Accounts., Terry Gourvish British Rail 1974-1997 (data series compiled from BRB annual reports). Government receipts from Railtrack / ROSCO sales have been excluded from figures. Note: Government subsidy is the sum of the net subsidy to Passenger Services and the subsidy to Network Rail.
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■ The past decade has seen a major increase in the rate of spending on rail. This has come from both Government subsidy and grant and Network Rail funded investment from borrowing against the RAB. This has been used to support Network Rail’s major investment programme either through Network Grant or access charges.
■ However, it is noticeable that the increase in investment and the growth in passenger journeys is not closely correlated:
■ The upturn in journey growth began between 1997-2001 in a period where investment in rail infrastructure actually declined; and
■ Most of the investment has been to address the maintenance backlog on the “steady state” Network inherited by Network Rail rather than on enhancements (see slide 10).
Increased Government support for the industry has helped fund infrastructure investment. This has contributed to the TOC growth story but does not fully explain it.
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10
1982-8
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1983-8
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1984-8
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1985-8
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1986-8
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1987-8
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1989-9
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1990-9
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1991-9
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1993-9
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1994-9
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1995-9
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1996-9
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1997-9
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1998-9
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2010-1
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2011-1
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Millio
n jo
urn
eys p
.a.
£bn
Government subsidy Railtrack/NR funded investment Passenger journeys
0
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600
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1,000
1,200
1,400
1,600
0
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1982-8
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1983-8
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1984-8
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1985-8
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1986-8
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1987-8
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1988-8
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1989-9
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1990-9
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1991-9
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1992-9
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1993-9
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1994-9
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1995-9
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1996-9
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1997-9
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1998-9
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1999-0
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Millio
n jo
urn
eys p
.a.
£b
n
Net Subsidy to Passenger Services Subsidy to NR Passenger journeys
Government support
While overall Government support has gone up since privatisation, direct payments from Government to TOCs have declined from £1.4bn to £81m in a decade. Passenger growth has meant Government has had more money to spend on infrastructure investment.
Annual rail subsidy and journey growth (2012 prices)
Source: National Rail Trends; Network Rail / Railtrack Plc Accounts., Gourvish British Rail 1974-1997 (data series compiled from BRB annual reports). Government receipts from Railtrack / ROSCO sales have been excluded from figures.
9
Network expenditure
Analysis of Network Rail/ Railtrack expenditure, 2012 prices
Railtrack / NR Expenditure since 1997-98
2011-12 prices £bn %
OMR on the steady state network 83.8 85%
Enhancements 15.0 15%
Source: ATOC Rail Industry financial trends since privatisation, Gourvish British Rail 1974-1997 (data series compiled from BRB annual reports)
10
0
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2
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6
7
8
9
£b
n
Opex, maintenance and renewals (OMR) Enhancements
The majority of the increase in Network Rail’s expenditure has been on OMR in order to clear the maintenance backlog inherited from British Rail and Railtrack.
Since privatisation, only 15% of expenditure on UK rail infrastructure has been on enhancements. Most of these enhancements (57% = £8.6bn) have occurred since 2007-08 so the benefits are only now being felt.
0.0%
1.0%
2.0%
3.0%
4.0%
0
50
100
150
200
250
300
350
1997-98 2011-12
Mile
s (
mill
ions)
Train miles PiXC
Inter-city frequencies
Trains per day
Off-peak hour frequency
1994 2013 1994 2013
Manchester to London 17 47 1 3
Leeds to Edinburgh 2 15 0 1
London to Norwich 19 37 1 2
Leeds to London 17 32 1 2
Birmingham New St. to London 31 49 2 3
London to Sheffield 15 30 1 2
Bristol to London 23 33 1 2
Glasgow Queen Street to Edinburgh 37 61 2 4
Leeds to Huddersfield to Manchester 48 63 3 4
Cardiff to London 22 31 1 2
Passenger services - capacity
TOCs are using the network more intensely, providing higher train frequencies with a growing fleet, but containing crowding at around 1997/98 levels despite huge passenger growth
Source: National Rail Trends, Department for Transport statistics
Train miles up 36% since privatisation, PiXC maintained at 1997-98 levels
Average rolling stock age
Source: National Rail Trends; ATOC analysis
Source: ATOC analysis
0
5
10
15
20
25
Years
Change in total fleet size
1996-97 2012-13 Growth
Total vehicles in passenger use 10,400 12,351 19%
Source: OPRAF Passenger Rail Industry Overview; NR/ ROSCO/ ATOC Long Term Passenger Rolling Stock Strategy for the Rail Industry
Data series only available from the year 2000-01
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70%
75%
80%
85%
90%
95%
Movin
g A
nnual A
vera
ge (
MA
A)
%
Passenger services - performance
In 2011/12, 91.6% of trains arrived as planned (short distance services within 5 minutes of scheduled arrival time; long distances within 10 minutes)
Public Performance Measure (PPM, y/e March)
Source: National Rail Trends (PPM was first published in June 2000, but was calculated back to 1997-98).
Hatfield (Oct 2000)
Source: ATOC analysis, earlier data could not be sourced
Delay minutes per 1,000 train miles
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0
50
100
150
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250
Index 1
999-0
0 =
100
TOC on self Railtrack/ Network Rail
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Safety
Source: Andrew Evans, Imperial College. The 1975 peak includes the Moorgate Underground station disaster. Timeline provided from 1965 as consistent data is available to show the historic trend
Safety has continued to improve, with frequency of passenger fatalities decreasing
Train incident fatalities in Great Britain, 1965-2008
The grey shaded area indicates a period where figures are collated on a different basis, i.e. not split out between ‘5 or more fatalities’ and ‘less than 5’
0.00
0.05
0.10
0.15
0.20
0.25
1997-9
8
1998-9
9
1999-0
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2000-0
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2001-0
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2011-1
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£
Fares
In real terms, the average price paid per passenger mile has been almost flat since 1997/98. The increase in price paid for Season Tickets (where most fares are linked to Government policy) is offset by lower price paid for other (mostly TOC-controlled) ticket types outside peak times
Source: National Rail Trends
Average price paid per passenger mile (y/e March, 2012 prices)
Source: Lennon (data only available from 2003)
Price paid per passenger mile, Standard Season & other tickets (y/e Dec, 2012 prices)
Growth analysis
Price 2003
£/mile
Price 2012
£/mile
Price
Growth
% miles
2003
% miles
2012
Std Season 18.0p 18.6p 3.3% 29.9% 27.3%
Other types 22.2p 21.9p -1.7% 70.1% 72.7%
Average price paid per passenger mile
2012 prices 1997-98 2011-12
Pence per mile 19.6p 20.4p
60
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100
110
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03
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Ind
ex: 2
00
3 =
10
0
Standard Seasons Other ticket types
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Price comparisons
Electricity and gas prices have increased by 34% and 98% respectively since 1998 in real terms. Average price paid per passenger mile only increased by 4% over the same period.
Comparison of trends in rail fares and utility prices (2012 prices)
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Source: Rail fares from National Rail Trends; Water, Electricity, and Gas from ONS, CPI and RPI Reference Tables
40
60
80
100
120
140
160
180
200
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Index 1
998 =
100
Water
Electricity
Gas
Rail
Passenger satisfaction
In 2013, over 500 million more journeys rated as ‘satisfied’ or ‘good’ were taken, compared to 1999 - on the same-sized network.
Source: Graph produced by ATOC based on National Passenger Survey (started in Autumn 1999).
Trends in National Passenger Survey results
Annual-equivalent journeys rated ‘satisfied’ or ‘good’
1999 2013
Overall 708m 1,232m
16
Customer satisfaction with ticket price value for money is greater outside the London commuter area where a smaller proportion of rail users are season ticket holders. Spring 2013 NPS scores for Value for Money were 53% for Regional and 54% for Long Distance TOCs, compared to 38% for LSE operators.
Key: Passenger ratings per journey in %: Green - ‘satisfied or good’; Grey - ‘neither satisfied nor dissatisfied ; Red -‘dissatisfied or poor’
Europe comparison
Since 1997/98, UK passenger growth has outstripped state-operated European comparators. GB Train companies are among the most efficient in Europe. The 2011 Eurobarometer survey also shows the UK in the top quartile of European peers for satisfaction with punctuality/reliability, journey times, frequencies, connections and information provision.
Journey growth, UK and European networks
Sources: Flash Eurobarometer 326 - survey on passengers’ satisfaction with rail services
31%
14% 10%
49%
0%
10%
20%
30%
40%
50%
60%
% g
row
th
France Germany Netherlands UK
Source: UIC Railisa database
17
1998-2010
Note: The UK journey growth figure differs from that on slide 6 because this graph covers a shorter time period, with the UIC Railsia data only being available until 2010
Operating margins
Note: Margins quoted are per TOC accounts. Where necessary reported results are pro-rata to meet a 31 March y/e.
Source: Analysis of TOC accounts.
Average TOC operating margins
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3.6% 3.5%3.0%
2.6%
3.5%
4.9% 5.2%
4.1% 4.1% 4.2% 4.1%3.6%
3.0% 3.1%
0%
2%
4%
6%
8%
10%
12%
14%
1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
% o
pera
ting
marg
ins
TOC operating margins
Operating margins have decreased by 15% since 1997-98. The combination of competitive bidding and the prolonged impact of the recession meant that in 2011 margins, were lower than in 1998.
Operating margins
Note: Supermarket figures are an average for Tesco PLC, J, Sainsbury PLC and WM Morrision Supermarkets PLC
Source: Statutory accounts
19
Snapshot comparison of operating margins of TOCs and major supermarket groups
Average TOC operating margins are below those of the major supermarkets. In 2011, average TOC operating margins were 3.1% versus 5.3% for supermarkets
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2006-7 2007-8 2008-9 2009-10 2010-11
% o
pera
ting m
arg
in
Supermarket TOC