[R] signifies the Member has declared an interest. [W] signifies that the question was tabled in Welsh.

The next item is the urgent question. I have accepted an urgent question under Standing Order 12.66 and I call on Russell George to ask that urgent question.

Will the Minister make a statement on the role of Transport for Wales in the procurement process to operate rail services in Wales, in light of the announcement that four bidders are competing for the next Wales and Borders franchise? EAQ(5)0055(EI)

Yes, the procurement process to select an operational and delivery partner is being undertaken by Transport for Wales, a wholly owned, not-for-profit company established by the Welsh Government to provide support and expertise to deliver the next Wales and borders rail franchise and the next phase of the metro project.

Cabinet Secretary, it is disappointing, I think, that a statement was made to the media last week, even a briefing made available to the media, before a statement was brought here before Members. This is one of the biggest procurement exercises that Wales has ever seen and I should say that there is a great deal of cross-party consensus on the need to address Wales’s transport infrastructure, and a will, I think, to work together and take this forward. That’s why I think it’s particularly disappointing that the Assembly has been bypassed in this regard.

Cabinet Secretary, can you expand on what your officials told the media last week on the structure and governance arrangements for Transport for Wales, the procurement process, and Welsh Government’s vision for a not-for-profit model? Can I also ask how the Welsh Government intended to manage the risks highlighted in the auditor general’s and the gateway review in terms of franchised procurement and the franchise map?

I noted your answer to Leanne Wood earlier as well. Can you outline how Transport for Wales is taking forward the franchise development when the franchise map has not yet been agreed? Can you also confirm whether or not Transport for Wales is public facing? Can AMs meet with the managing director? Will they be subject to scrutiny from Members, and also from the Economy and Infrastructure Committee?

Finally, earlier this month you told the Chamber that you wanted to see Transport for Wales’s head office in the Valleys. But it appears that you have reversed this commitment and I’d be grateful for clarification on that point.

I’d like to thank the Member for giving me an opportunity to confirm that the headquarters of Transport for Wales will be located in the Valleys. When I made my statement, which was comprehensive, back in July I said it was my intention to ensure that that happens, and I can tell Members today that it is still my intention, once we have identified suitable premises, for the headquarters of Transport for Wales to be located in the Valleys.

Presiding Officer, I set out details back in July for taking forward the Wales and borders franchise and the next phase of the metro, and last week’s announcement was part of the procurement process. In terms of what my officials told the media or anybody else, there is nothing new in what was presented other than the four bidders that have been named. Transport for Wales, as the Member is aware, is a not-for-profit, wholly owned subsidiary company of the Welsh Government and will act in a professional advisory capacity to support our procurement and delivery of the next Wales and borders franchise. It employs 22 members of staff—experts who I’m confident will be able to address the concerns of the report that the Member identified. In terms of the map, which was raised earlier in First Minister’s questions by the Member Leanne Wood, we have reached an agreement with the Department for Transport on the map, including the provision for services that will extend to Bristol and to Liverpool.

In terms of the operation of cross-border services, the Member will be aware that we’ve already established and agreed one agency agreement with the Secretary of State and we are in the process of finalising an agreement with the Secretary of State on a second agency agreement that will concern cross-border travel. However, I recognise that there are real and legitimate concerns across the border amongst many passengers who start and finish their journeys within England. For that reason, I am determined to make sure that we have the right processes in place for their complaints or, indeed, for any of their concerns to be expressed and to be dealt with appropriately. For that reason, I anticipate ensuring that the cross-border forum that currently exists continues well into the future.

Naturally, following on from that, there is concern on this side of the border about the quality of rail services, by the people of Wales. As has already been mentioned, we have seen these four companies bidding for the Wales and borders franchise and, naturally, to be fair, you have answered written questions from me on this very issue, of how exactly the railways will be operating under the franchise and whether the railways will stay fundamentally the same. What you’ve said, and to quote you:

‘routes operated under the next Wales and Borders franchise to be broadly unchanged.’

I’ve listened to the responses that have been given already today, but what does ‘broadly unchanged’ mean in this context? Will the most profitable railways remain as part of this franchise? Because if they don’t, we may find ourselves in the bizarre situation where, from this Assembly, we’ll be able to give a right to run the Wales and borders franchise to a private company from anywhere in the world and we’ll be funding their shareholders too, in countries abroad, while having virtually no power over investments in our own railways here in Wales.

So, can I ask, in the future—and I do understand that the work on this franchise is ongoing—are there any plans in the next franchise to claim more investment in the rail network here in Wales? Thank you.

I’d like to thank the Member for his questions. We were very disappointed that the UK Government has not agreed to invest more in the network within Wales and those parts of the network in England that are operated as part of the current franchise. Historically, the network has been underfunded and I think the latest statistics suggest that only 1 per cent of the network spending has come to the Welsh routes. So, without a shadow of a doubt, there is a need to significantly increase the amount of investment in Welsh routes. Indeed, we would like to see those funds devolved so that we could ensure that a correct and appropriate amount of investment is available.

Presiding Officer, I think I should say that, in order to ensure fair and open competition and, indeed, to protect the integrity of the process, it’s not going to be possible for me to release any specific details, or the Welsh Government will face the risk of legal challenge insofar as the procurement exercise is concerned. However, I would like to, in response to the Member’s questions, just outline again what I stated in July with some details about the actual dates.

We’ve gone through the process of the consultation with the public. I think I said back in July that we had received something in the region of 190 responses from a very wide range of stakeholders. That consultation informed the initial stage of discussions with would-be bidders. Last week, four bidders were identified and named as having an interest in taking forward the next franchise. By November of this year, bidders will have responded to our call for outlying solutions.

Leanne Wood mentioned earlier a specific issue in her consistency regarding rail travel. What will happen next is that, as bidders develop their technical solutions, their focus will be on how to achieve our critical objective of delivering four services per hour to each of the Valleys. So, what’s going to be taking place up to November is that a series of outline solutions will be presented to Welsh Government. Following that, we will open up a consultation that will last approximately 12 weeks. That will be managed and operated by Transport for Wales. Again, it will enable the public and will enable stakeholders to give views on the future franchise. Dialogue will then commence with the bidders in the new year—we anticipate in January 2017—with the final tender process taking place between July and September of next year and then, as Members are already aware, the contract will be awarded by the end of 2017, with operations beginning in 2018.

The Member for UKIP earlier asked about dates and time frames for the operation of the metro. As the First Minister has already identified, phase 1 is actually being delivered, with £13 million of investment in the network. We expect the mobilisation of phase 2 to commence from 2017 onwards, with early works commencing on the metro phase 2 in 2018, so that by 2023 metro services in areas of the city region will be completed and operational.

Cabinet Secretary, UKIP welcomes the fact that there are four bidders competing for the rail franchise. Does the Cabinet Secretary not agree that competition is healthy and should result in the best possible deal for Wales?

Competition can be helpful; the problem with the current franchise is that, when the contract was awarded, it was based on—as Members have already identified this afternoon—zero growth. That, in turn, led to all increases in passenger travel and passenger tickets, all of the revenue that was gathered from them, to be generated as profit for the operator. If we look at the current franchise and the numbers of passengers that have taken journeys on the rail network, 18 million passengers took journeys on the network in 2003; by 2013, that number had increased to 29 million. We cannot possibly afford to be in the same situation again, where we do not build into the contract contingencies for increases in capacity. That’s why I think it’s fair to say, during the process of the consultation that took place earlier this year, a huge proportion of the concerns that were raised with us related to capacity and the quality of rolling stock. In terms of questions that have been raised in this Chamber previously—again, by Leanne Wood, actually—in terms of the quality of rolling stock, each of the four bidders has significant buying power in terms of new rolling stock, and so we would expect that primary concern that passengers have expressed through the consultation, of quality of rolling stock, to be fully addressed in the next franchise.

I thank the Cabinet Secretary.