Part of the debate – in the Senedd at 4:45 pm on 3 November 2020.
Well, can I thank Russell George for the various questions that he's raised today? I do appreciate that Members may be disappointed that a statement was not able to be made to the Senedd Chamber on the Wednesday of the week when the announcement was made. Let me outline to Members the reasons why, and they are many. First of all, sensitive commercial negotiations have been taking place during the summer and into the autumn with KeolisAmey on the future of rail services, but, of course, the heads of terms that were agreed were only agreed and then signed off at 6 p.m. on the Tuesday evening, which meant it was simply not possible to then table this for debate or for a statement on Wednesday ahead of the recent recess. Also, given the uncertainty that this date would be achieved and that slightly more time would be required for briefings, obviously, for staff, the 2,500 staff, we therefore determined that scheduling it for Thursday was prudent. Thursday of that week was also the last date to ensure that all staff could be briefed and that the 90-day Transfer of Undertakings (Protection of Employment) Regulations 1981 consultation period could be instigated, and therefore it was not possible, then, to make the statement this week. Now, given our desire to ensure that not just customers but staff are at the heart of everything that we decide with regard to the Wales and borders rail services, I think it was only right and proper that workers heard first about the future of their employment and the services that they deliver. And I can add a further final but important reason why the timings were such, and it's because Keolis and Amey are two very significant international private companies, they have shareholders, and there are requirements on market-sensitive announcements and how these need to be communicated with shareholders, and therefore we were unable to say anything before those shareholders were informed.
Now, I would agree with Russell George that people care less about the brand that is carried on the side of a train than they do about how a train operates—whether it's on time, whether it's clean, whether toilets are available, what sort of catering services are available on board—but I disagree with Russell George on his assertion that the public sector is less able to deliver regular, reliable services than the private sector. We need only look at the likes of Northern to appreciate that the UK Government would agree with me on this point. The UK Government intervened with Northern Rail, took it over, brought into public ownership. So, what we are doing is, to a degree, consistent with what other Governments are doing. And I think Members would also recognise that in other areas of public transport delivery—buses, for example—the public sector plays an excellent role in some parts of Wales, and we would wish councils to play a greater role across all local authority areas in delivering bus services.
And in terms of comparing the decision that we've made with regard to rail services to our management of Cardiff Airport, I would just remind Members that, prior to this global pandemic, I don't think there is any Member in the Chamber that was questioning the success of Cardiff international airport in recent years—passenger numbers had increased to record levels since our taking over of that particular asset; we were delivering on a hugely ambitious vision for the airport. But, of course, regional airports the length of breadth of the UK, and further afield, are suffering terribly as a result of coronavirus, and it must be said that many more regional airports are in more vulnerable positions than Cardiff international airport, and that's because Cardiff international airport has a Government sitting behind it, able to protect it.
Now, in terms of costs associated with the decision that we have made, costs for the negotiations and the outcome of the negotiations will be available before the transfer takes place in February. But there are many other costs that we need to consider—one the cost of actually maintaining services at the levels that they are operating against the reduced fare box, and, regardless of the ownership model, there would still be a need to intervene with additional public money in order to keep trains operating. In terms of set-up costs, what I can say to Members is that TfW have already identified that it'll be necessary to ascertain certain assets from KeolisAmey to ensure the smooth transition and ongoing provision of services, but the important point is that these are assets and, therefore, they have a value, rather than just a cost. Once the value of these assets has been fully resolved, I will ask TfW to provide Members with a comprehensive update.
There will, obviously, be one-off administrative costs in respect of managing the TUPE process and—[Inaudible.]—of any required contracts. This will be significantly less, it must be said, than the ongoing management and performance fee being paid under the emergency arrangements. And then the costs of this will be less, on the whole, than the performance and management fee being paid by the Department for Transport to train operators under their emergency recovery management agreement, which takes me to the next important point that Russell George was asking about, and that was what other methods of taking forward the management of and delivery of rail services were considered by Welsh Government. Well, every option was considered, and, at a UK Government level, through DfT, there is no single option or model that has been taken forward for all franchise agreements. Some train operators have had the original emergency management agreement extended, others have been put into a new agreement for up to 18 months, and those agreements are known as emergency recovery management agreements. Some, of course, as Members are aware, have been given direct awards, while some are under the operator-of-last-resort model.
Many are not giving certainty to passengers in England. What we have done is offered a clear time frame for a smooth transition, a certainty for passengers and for staff. The key difference with our franchise agreement, which we signed in 2018, was that it incorporated not just rail services, but also the transformation of the asset, the core Valleys lines. That made it distinctly different. So, whilst we were able to consider all of those models that are being adopted in various franchise agreements in England, we determined that the model that we decided on was the most suitable for Wales.
In terms of the question asked about how long can this last, well, we await a UK position in regard to the Railways Act 2005 and whether that will have to be amended in some way. But our position is that we will be taking forward this new operating model for as long as we can, and we wish to make sure that we use the agreements that we have in place, the heads of terms that we're going to be negotiating the details of, to ensure that we have a transition in terms of rail services, but that we also deliver on the ambitious metro programme and, furthermore, that we use the joint venture with Keolis and Amey to guarantee that we can deliver integrated ticketing and other improvements in the way that rail services operate in the Wales and borders areas.
And then, finally, Llywydd, Russell George asked the really important question about our commitment to rolling stock, that £800 million commitment to rolling stock. We remain committed to delivering that £800 million upgrade programme, new trains—excellent new trains—operating on our railways. We are committed to that, and, of course, future Governments will wish to look at spending priorities in the longer term with regard to station upgrades, but, right now, I remain committed to investing wherever we can in those station upgrades. But I have to say the UK Government needs to make good on its historic underinvestment in rail infrastructure and also invest in rail lines and in stations.