4. Statement by the Cabinet Secretary for Economy and Transport: Transport for Wales

Part of the debate – in the Senedd at 3:25 pm on 23 January 2018.

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Photo of Ken Skates Ken Skates Labour 3:25, 23 January 2018

For the first time, we have committed to a five-year programme of transport capital funding through Transport for Wales for both transport maintenance and new projects. This will ensure that these projects will be delivered in the most efficient and effective way, and with a headline target of driving 15 per cent to 20 per cent efficiencies across the five-year investment portfolio for new projects, which means we can make our funding deliver even more. This will also enable the construction supply chain to invest with confidence in the future in terms of both capital and skills. Furthermore, wherever an acceptable business case can be made, the economic action plan commits that the Welsh Government will seek to consolidate current supply arrangements directly into Transport for Wales.

In relation to the new Wales and borders rail service, we have made significant progress with the UK Government since last summer. The Secretary of State for Transport and I have discussed and reached agreement on the way forward on a number of issues and I am pleased that officials are making good progress. Chief among these issues was the financial implication of a complicated devolution context for rail. Discussions between officials, including from Her Majesty's Treasury, continue and the process for transferring the core Valleys lines railway asset is taking shape.

The agreed programme of activity has led to the procurement process for the new service continuing at pace and in line with our plans. Arriva Trains Wales withdrew from the bidding process back in October. As was stated at the time, it is not uncommon for bidders for major projects to withdraw during the tender process and Arriva were clear that their withdrawal was due to their own commercial reasons. The recent Carillion issue has been discussed in this Chamber and I issued a written statement on 17 January.

Transport for Wales had received three bids to operate and develop the next Wales and borders rail service and metro on 21 December last year. They'll be continuing to evaluate these bids over the coming months. By the end of May this year, our process will culminate with the award of the first rail services contract made here in Wales. This follows intensive evaluation and post-tender discussions, led by Transport for Wales, to ensure the contract fully captures the quality service and commitments offered at final tender. 

Both the Welsh Government and Transport for Wales are geared up to deliver against these dates, allowing proper time to transition to a new operator and a new way of operating through Transport for Wales in October. However, it must be remembered that until the full transfer of powers has taken place we will still require the timely approval of the UK Government to allow us to both reach preferred bidder stage and to award the contract.

The UK Government plans to lay an Order in the UK Parliament shortly to transfer rail functions to the Welsh Ministers, and, as a fall back, we have also agreed an approach to put further legal agency agreements in place to enable us to award, manage and deliver the next Wales and borders rail service. It remains imperative that the UK Government works at pace with us to deliver against the agreed programme.

Transport for Wales will shortly begin the process of appointing infrastructure delivery partners that will work with the operator and development partner to deliver areas such as station improvements, electrification and signalling for the south Wales metro. Transport for Wales is working closely with Business Wales to make opportunities available to local small and medium-sized entreprises and third sector enterprises. They have already hosted a number of well-attended awareness events relating specifically to the IDP procurement, most recently in Wrexham earlier this month. This is one illustration of how Transport for Wales is entering a new stage of mobilisation to allow it to proactively manage both the new rail service and the different metro schemes.

James Price is in post as chief executive officer, bringing over 15 years of experience of operating and delivering at a senior level. In addition, we have recently appointed independent non-executive directors Martin Dorchester and Nick Gregg to the team, addressing recommendations that have made by the Auditor General for Wales. Martin Dorchester is an experienced executive, having been group CEO of one of the largest logistics companies in Scotland, and Nick Gregg has been appointed as chair of the Transport for Wales board, initially for a period of 12 months. Nick has the skills required to be a highly successful chair, and brings extensive business experience to the board. Transport for Wales will shortly advertise for two further independent non-executive directors to join the board, and this will ensure a diversity of experience and views in decision-making.

I am mindful of the need to make sure that Transport for Wales can deliver effectively for the whole of Wales, and, following my announcement last month of the intention to set up a Transport for Wales business unit in north Wales, I have now instructed Transport for Wales to bring forward proposals for a north Wales office, and I expect this to be delivered at pace too. Meanwhile, in south Wales, good progress is being made towards the construction of the Transport for Wales offices in Pontypridd, led by Rhondda Cynon Taf County Borough Council, with whom we continue to work very closely. Looking ahead, once the new operator and development partner has been appointed, we will enter a period of mobilisation for the new service. Transport for Wales will work with the successful bidder to help ensure a seamless transition from the current franchise to the new arrangements, in the interests of passengers and staff. The travelling public should see no disruption to services in October when the new ODP takes over. Then, over the coming months and years, Transport for Wales, working with the operator and development partner, will transform the transport network, putting the passenger at the centre of their plans.