2. Will the First Minister make a statement on the awarding of the Wales and Borders rail franchise? OAQ52261

4. Will the First Minister provide an update on the new Wales and Borders rail franchise? OAQ52285

Yes. Presiding Officer, I understand you've given your permission for questions two and four to be grouped.

Members will now be aware of the details of the new rail services contract, following the Cabinet Secretary for Economy and Transport's written statement on Monday.

Okay. Diolch. Just before the recess, you announced the winner of the new Wales and Borders rail franchise, and it's already been pointed out that you have broken a manifesto commitment for a not-for-profit railway company. But it also seems now that you're privatising the infrastructure from the core Valleys lines as well, and that's a real concern after what happened the last time that the Conservatives privatised rail—in particular, we had the Hatfield disaster, which led to private companies running Railtrack and being abandoned, and the creation of Network Rail as a public body. So, what I'd like to know is whether you've had permission from Network Rail to privatise this infrastructure, and the real question really is: why can't it be kept in public ownership, and what will happen to the 1,600 people that Network Rail directly employs in Wales? Will your Labour Government be transferring these to the private multinational corporations?

No. First of all, it's probably right to say that our first preference would have been to have had a not-for-profit public sector organisation or body able to bid for the franchise. That was expressly ruled out by the legislation in Westminster, something that I didn't welcome, neither now nor at the time. What we have, however, is a service that will be an excellent service. It will improve capacity across the whole of Wales, and everybody will see a positive difference to services. He suggests that the network has been privatised. Well, we've talked to the rail unions, to the RMT—personally, I've talked to them—to the TSSA, and also to ASLEF. They understand the way forward. We have made sure, for example, there'll be a guard on every train, to add to passenger security and safety. So, we work with the unions in order to deliver a rail network that will be, I believe, the envy of the rest of the UK in future years, especially given the chaos that we see existing in some parts of England at the moment.

This announcement is great news, particularly for many of us who campaigned for many years for the Ebbw Vale to Cardiff line to stop in Newport. It's gathered a lot of local support, including from the South Wales Argus, which has long campaigned on this issue, and it's a huge boost and will link communities across the region. I welcome the announcement that £800 million will be invested in rolling stock and that the franchise has committed to commissioning 148 brand-new trains for the next five years.

Yesterday's announcement stated that over half the new trains would be built in Wales. Can you give any further detail about what discussions are taking place with CAF Rail in Newport? 

Well, the CAF investment is hugely significant. As the Member has said, it is a hugely important capital investment. It will create 300 highly skilled jobs in Newport as well. I can say that the operator and development partner is expected to procure long-distance rolling stock fleet from CAF. That rolling stock will be assembled at the CAF facility in Newport. Of course, the contractual arrangements will be a commercial matter between the ODP and CAF itself, but it's an excellent example of working together in order to deliver jobs in Wales. There's no doubt in my mind that one of the things that attracted CAF to Wales in the first place was the fact that we have an exciting programme of investment in our railways.

Yesterday's statement by the economy and transport Secretary said that we'll see a second limited-stop express service every hour on the Wrexham to Bidston line from 2021 and, from 2022, see services stopping at Wrexham as part of a new two-hourly Liverpool to Cardiff service. How, therefore, do you respond to the statement made to me yesterday by rail user groups in north-east Wales that the two trains allocated to the route could be running an earlier service into Wrexham at around 8.30 a.m. and operating a more frequent service over the line during the evenings and on Sundays and that, provided that train crews can be sourced, this could be realised as early as December 2018 or the May 2019 timetable change?

Yes, I mean these are all part of the discussions on timetabling, but the intention as the Member has rightly said is to improve the service on the Wrexham to Bidston line and indeed, due to the Halton Curve, further than that, of course, to discuss with Merseyrail the possibility of using the Mersey tunnel as well in order for trains to be able go straight into Liverpool. Those discussions will take place in order to allow that to happen. It's a long-held ambition for trains from Wrexham Central to go into Liverpool, but, of course, the Wrexham to Bidston service is amongst one of the first candidates for improvement that people will see, and we want to see that line develop even further in the future.

One of the issues that was mentioned yesterday in press reports was that the payments made to the new franchisee will depend to some extent on their delivery of service, which sounds good. Now, some of the criteria that were mentioned included cleanliness, quality of service and punctuality, but one of the problems with the privatised rail services that we've had in the last 20 years is that, sometimes, with punctuality the rules can sometimes be avoided by trains being cancelled instead. I wondered whether that issue had been looked at with the awarding of the contract.

No, that can't happen. We are aware of what happened at Northern Rail. We've ensured as part of the contract that rail operators cannot get out of their obligations simply by running fewer or no trains, and, of course, as part of the announcement, there will be simplified compensation arrangements for passengers who have to wait as well. So, we want to make the service as user friendly as possible, and it's exciting that the operator wants to do the same. They want to make sure that they work with us in order to build a rail network for the future. The days of 40-year-old trains running on the Valleys lines particularly—those days are coming to an end, and I'm sure that the people of the Valleys will be delighted to see that.

First Minister, I welcome the announcements made as a result of the Wales and borders rail franchise and the south Wales metro. I particular welcome the commitment to include half-hourly services to the Vale of Glamorgan line from 2022. I've been campaigning for this for many years, and, of course, you recall that the Welsh Government reopened the stations at Rhoose and Llantwit Major in 2005. First Minister, do you agree with me that a half-hourly service that calls at Rhoose station for Cardiff Airport will also improve access to the airport?

Yes it will. I can also say that Transport for Wales, with support from the ODP, will also be procuring a bus service as part of an integrated approach to improving connectivity across the Vale of Glamorgan, connecting Barry and the airport, and that will be available no later than 1 January 2024.

I welcome the new contracts and particularly the long overdue new rolling stock for the Valleys lines, but also the reduction in fares for the upper Valleys, which will help many people get more opportunities to commute in and access jobs, particularly in Cardiff.

Could I just ask the First Minister to say something about the risks that may come from the contract in terms of the different approach to risk sharing? If we see passenger numbers and fares undershoot relative to expectations, what may be the implications for other Government services?

We don't anticipate that at all. The last franchise was let on the basis that there would be no growth in passenger numbers. There was an enormous growth in passenger numbers, and we see now the overcrowding that takes place on so many services not just on the Valleys lines, but across many services that run on the Wales and the borders franchise network. We have built into the agreement the expectation that passenger numbers will rise, particularly but not exclusively passengers going through Cardiff Central, and the agreement is based on seeing an increase in passenger numbers. I can't see the numbers decreasing. I can't see that people will want to travel less or not travel into work. We must be careful to make sure, of course, that there is sufficient capacity over the next few years that people feel that there is a comfortable and good-value alternative to the car. But what we can't do is keep on building roads into our cities in the hope that that will resolve the issue of traffic. It can't be done without demolishing houses.