1. Will the Minister make a statement on the future of the Wales and Borders rail franchise? OAQ(5)0069(EI)

Yes. The Wales and borders franchise is due to end in October 2018, and we have started the process of procuring an operator and development partner, who will also operate services and develop the south Wales metro.

I’d like to thank the Cabinet Secretary for that, and note, with thanks, the statement that was made this morning on rolling stock. Within the statement, the Cabinet Secretary said that, on core Valleys lines, passenger operations—which includes from my constituency—making use of diesel-only traction will be phased out, and conventional electrification, stored-energy systems, and hybrid systems would be considered. I have met with Arriva Trains Wales, and they said that, in the short term, though, that’s not going to be possible—there is a shortage of rolling stock and a shortage of carriages, so people are standing up. Now, given the damning report that listed failures of the UK Government’s electrification of the line, that isn’t allowing diesel rolling stock to be transferred temporarily to Valleys lines. I’d like to know whether the Cabinet Secretary has a plan for that, and could he also elaborate perhaps on whether the Wales and borders franchise will include new rolling stock as part of the franchise?

Well, there are a number of important points that the Member has raised, and, of course, some of the problems that have recently been highlighted could be avoided if we could have responsibility, powers, and a fair settlement devolved to Wales, so that we can ensure that the needs of passengers are met in the full. Now, it’s up to Arriva Trains Wales to appropriately manage capacity on the current franchise terms, but we have also provided additional rolling stock to Arriva Trains Wales to assist in overcrowding on many lines, including those that the Member has identified. Whilst there is a very limited diesel rolling stock currently available, we are in dialogue with the rail industry at the moment, to try to identify solutions that could deliver additional capacity in the short term.

Now, the majority of routes and services within the Wales and borders franchise, including the Valleys lines, are dependent upon the £180 million Welsh Government support every year, in terms of franchise subsidy payments and funding for additional services and rolling stock. Arriva Trains Wales lease the vast majority of rolling stock used on Wales and borders services from two privately owned rolling stock leasing companies. And I understand that four of the pacer trains used predominantly on the Valleys lines are owned by local authorities in south Wales.

Now, the Member will know from the statement that’s been issued today by me that, with the new competitive dialogue taking place with the four bidders for the next round of the franchise, fresh criteria will be put in place that enables growth in terms of passenger numbers to be met, by an increase in the amount of rolling stock that’s available, and not just in terms of quality, but also vast improvements in terms of the quality of rolling stock.

Cabinet Secretary, you’ll be aware, obviously, that the Welsh Government’s stated ambition is to deliver a new not-for-profit rail model, but the current bidders, as you’ve outlined, to become the Wales and borders operator and development partner won’t themselves be not-for-profit companies. So, clearly, there’s a potential for some misunderstanding. Now, I want to see a proper model, which sees profits reinvested in the services and infrastructure, and a truly not-for-profit model, and others, such as the RMT union, have similar ambitions. Will you confirm today that you share that general principle, and will you provide details on what you are doing to move towards that goal?

Yes, of course. The Member will be aware that there are restrictions in place, through legislation from Parliament, that prevents only not-for-profit operators from bidding for the franchise. But we have designed the procurement system as such that it does not disadvantage any not-for-profit bidders, should they wish to come forward—none have, but what we have done is design a solution that fits with our limited powers. We are seeking changes to those powers, to enable, potentially, Transport for Wales, for example, and another not-for-profit operator in the future, to run the services that could be part of a future franchise. But, for the time being, we have designed a model—we’ve been as innovative as we possibly can—to ensure that as much of the franchise through concessions in the next round can be operated on a not-for-profit basis. The process of competitive dialogue will also place, right at the forefront of deliberation, service quality for passengers, rather than profit motive, and I would share the aspirations that the member has outlined today—for all money to be retained within Wales and to be reinvested in the network. It’s what passengers expect from their public services.