Tag: transport

Reshaping transport provision: Time to end Wait and See

Posted on by Rhys David

The plan by First Group to quit its UK bus operations could release one of the building blocks needed to create a more integrated transport network across Wale.

There is a tendency in Wales in economic matters to wait to see what happens, an expectation that external agents will always determine what happens and that the limit of Wales’s influence is to try to ameliorate any ill-effects. Yet, what is needed very often is a much more pro-active approach whereby the initiative is taken in Wales to shape what happens, in the best interests of those involved.

Just such a case has occurred with the announcement by First Group that it is considering selling its UK bus operations to concentrate instead on the US market. Now, it just happens that First Group for better or worse runs the buses in Wales’s second city, Swansea, having inherited the operations of the former South Wales Transport and United Welsh, the two previous operators of the bulk of services in the area.

Aberdeen-based First (also operators of the Great Western Railway franchise) has made its intentions to quit the UK bus market following pressure from an activist investor, unhappy after a series of bad rail investment decisions hit profits. In West Wales First Cymru runs local bus services not just in Swansea, its operations extending across to Neath, Port Talbot, Bridgend and Maesteg in the East and Haverfordwest, Tenby and Carmarthen in the west, plus express services to Cardiff.

Various bidders will no doubt emerge for First’s operation, including those in Swansea, but it is doubtful if any of them will come from private sector companies within Wales. So, as Plaid Cymru leader, Adam Price pertinently asked in questions to First Minister Mark Drakeford in the Senedd early on June 4th, does this not provide an ideal opportunity to extend within Wales the principle of public ownership of transport services? This could create another building block towards the creation of an integrate transport system in Wales, which could bring together control and management of rail, road and other public transport services. After all, the Welsh Government has taken a step in this direction with the acquisition of Cardiff Airport.

Firstly, however, it is worth offering some background. Britain’s bus services were deregulated under the 1985 Transport Act, with the promise of bringing lower fares, new and better services through greater competition, and, in consequence, increased usage. Previously, scheduled bus services had been run by National Bus, (which had brought together a patchwork of state-owned, semi state-owned and private companies), municipal bus companies and a small number of private operators.

At the time of deregulation more than threequarters of bus turnover was in the hands of the public sector but to raise revenue for other purposes many local authorities took the opportunity over succeeding years to sell off their bus operations to private sector companies, principally Arriva, Stagecoach , First Group, Go-Ahead and National Express. Only 12 municipal operations remain, including Cardiff Bus (UK’s third biggest) and Newport Bus. Three other local authorities run buses in Wales, Caerphilly, Monmouthshire and Pembrokeshire but only on a very limited number of routes where no alternative provision is available.

The Government held back from deregulating bus services in London. Instead, it vested overall transport powers in Transport for London, which directly runs London Underground, London Overground and Docklands Light Railway, and franchises bus services to ten private operators, including German state-owned Arriva (Deutsche Bahn), Dutch state-owned Abellio, and French state-owned RATP. It is also responsible for Crossrail and London’s roads.

Deregulation has failed to deliver its promises and the London model, whereby services come under the office of the Mayor and the London Assembly, has proved much more effective. The 30 year plus period of private operation outside London has created private monopolies rather than genuine competition.  The Competition Commission noted in a report the emergence of “geographic market segregation” whereby the big five operators (Arriva, First Group, Go-Ahead, National Express and Stagecoach) leave each other to operate in their chosen territories, undisturbed by competition. [1]

The companies are free to cut services as and when they choose in this unregulated environment and have increasingly been doing so as subsidies from local authorities for uneconomic routes are withdrawn, leaving many parts of the UK, including Wales, with limited or no provision. Services have, nevertheless, been mostly profitable for the operators and fares have increased since1995 by more than 150 per cent against a rise in the cost of living of not much more than half that figure.

 The Welsh Government recognised  in the case of Cardiff Airport that it was important the facility was in the hands of an operator with a strong public service mission and First Minister Mark Drakeford in his reply to Adam Price indicated there was no current intention to sell the airport back to the private sector.

There is an equally strong case for an early approach to be made now by Welsh Government to establish whether First Group would be prepared, preferably in advance of the wider sale of the subsidiary, to divest First Cymru to a Welsh Government-owned not for profit entity.

The price First Group might demand is not clear and will depend on the profitability of the Welsh operations and the value of the assets (the bus fleet, engineering workshops and depots). First Group might also not want to break up its business before or at sale time, though the transfer of assets between transport companies is an established practice. Though It may not be the best yardstick as it was a much smaller company, ComfortDelgro acquired south Wales bus operator, NAT, which now runs services in Cardiff, Newport and the Vale of Glamorgan, for £14m in 2017.

The mechanisms by which such a transfer to the public sector could be achieved and the structures required will need to be explored but the opportunity has been created for Transport for Wales to be given the wider responsibilities that its title implies. As set up, its remit as a not-for-profit company is to provide support and expertise to the Welsh government on Welsh transport projects. Unlike Transport for London it does not own or manage such projects on a day to day basis. Its role is merely to plan, commission and arms-length manage. It employs only a relatively small staff.

It has a very limited bus remit, its main workload being in the rail sector where it was responsible for procuring the most recent Wales and Borders rail franchise (won by Keolis Amey of France/Quebec. It is also charged with bringing forward the South Wales and North Wales Metros. A current task is to investigate the causes of the decline in bus patronage in Wales, with the aim of proposing a range of solutions and exploring what has worked elsewhere. [2]

Transport for Wales would need to be reconstituted to take on an executive role but a new body with statutory powers could represent a first step towards creating a provider that could work much more effectively to integrate transport in Wales across buses, rail, airports, seaports and roads. Alternatively, as an intermediate step, the Swansea Bay City Region could be given the task of running bus services, putting it on a similar footing to the English cities that have accepted devolution deals, and which now have transport responsibilities in their portfolios.

The example of Cardiff Bus and Newport Bus, both of which run modern fleets could be adduced as evidence of how good public service provision can work and produce returns for the taxpayer rather than profits for the shareholder. Public pressure for moves towards clean air technology is also much more likely to be effective when directed towards operators within the public sector than to those operating as private companies. Since acquiring NAT, ComfortDelgro has chosen to recycle some of its older London buses for use as school transports in Cardiff. Wales, is of course, already familiar with cast-offs from rail companies and the London Underground on its rail network.
There is also a wider economic case. Large sums of money are spent by the Welsh Government subsidising public transport in Wales through the concessionary fares offered to bus pass holders. Bus companies also qualify for a UK Government fuel rebate to help keep services viable. Except in Cardiff and Newport, a proportion of Government bus pass funding is finding its way into the profits of companies based in England, Scotland, France, Germany, the Netherlands and Singapore. It would be much better if this money was recycled in Wales in the creation of better overall transport provision.

The expertise question will no doubt arise, but it has already been demonstrated by the comparative success of Cardiff Airport since it was acquired from its absentee Spanish ownership that public sector control can work in commercial areas. (Local authority-owned Manchester Airport is the prime example of this, turning the northern city into a commercial and financial powerhouse). And unless Wales tries and risks failing, it will never acquire skills of this sort.

If Wales fails to acquire First Cymru in one form or another, the business might well be acquired by Abellio, Arriva, or RATP. Would it really make more sense for Welsh bus operations to be owned by the Dutch, German or French governments than by the Welsh government?

Rhys David is chair of Nova Cambria, the Welsh think-tank

June 1st, 2019

[1] Where competition has occurred, it has usually involved a new entrant seeking to undercut on existing routes rather than developing new ones. This has resulted usually in the incumbent having to cut less profitable services to protect revenue and profitability. In Cardiff Singapore-owned New Adventure Travel, (NAT) has been challenging the municipal operator. Cardiff Bus has recently reported losses and has been forced to re-order its services and schedules.

[2] Keolis Amey Cymru trades under what is in effect a fig leaf name -Transport for Wales Rail Services – which is the branding that has now replaced Arriva Trains Wales on Wales and Border Services. This carries the suggestion of a stronger public sector involvement than is the case.

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Cardiff: Whatever happened to planning?

Posted on by Rhys David

The vision that led to the creation of Cardiff’s outstanding city centre more than 100 years ago has sadly gone missing in recent decades and an incoherent jumble has been created, Rhys David argues.

One of the joys of watching Michael Portillo’s Great Railway Journeys series on television – especially those focusing on the Continent and the US – is the sight of the magnificent railway stations he visits. National or provincial capital, big town or small, the arrival of the railway has usually been celebrated with an impressive building that could make a statement about the destination the visitor had arrived at.

In most cases the station main entrance leads out into a central square where civic pride could be further demonstrated with an open public space or small park, perhaps surrounded by dignified municipal or commercial properties. In Cardiff, too, the station was built to project pride in the growth of the new coal metropolis. Isambard Brunel even went to the trouble of moving the River Taff to get the right alignment for his railway through south Wales. The Great Western Railway put up a building in 1934 which has received perhaps the ultimate accolade – inclusion and three-star status in Simon Jenkins’ most recent buildings blockbuster, Britain’s One Hundred Best Railway Stations.

The work by architect Percy Culverhouse is described by Jenkins as clean and confident, and a rare example of proto-art deco. It captures, he claims, the moment when neo-Georgian was flirting with new decorative forms, its finest feature being the main concourse’s superb display of modulated art deco, its space lit by a superb sequence of hanging lights.

It dominated its location when constructed, the only other tall buildings in sight being Charles Bernard’s 1868 Royal Hotel in St. Mary Street and Henry Tanner’s General Post Office in Westgate Street. The new Cardiff General (now Cardiff Central) faced on to a square, originally the grid pattern working class streets of Temperance Town. This was bounded by Wood Street, the river and the rear of lower St. Mary Street. Following demolition of the properties, it was first an open space, and then the city’s bus station.

No longer. The area is named Central Square, but the description does not hold.  Into it have been crammed a series of concrete and glass monoliths that completely bully the station and fail to make the slightest nod to the history of the area and its original form. Government and commercial offices, lawyers, university departments, as well as the BBC’s Wales headquarters are being crammed into this area together with a token bus station for long-distance coaches.

Further development is planned on the other side of the station on the extensive Brains brewery and adjoining sites. The result: thousands of people, many of whom will want to be mobile during the day will arrive by car every weekday into an already heavily congested area, effectively accessible only along the bus-clogged Westgate Street and the Wood Street bridge over the Taff. It is little wonder the Royal Hotel has protested that existing high levels of atmospheric pollution can only increase.

The massing of the BBC building along Wood Street, whatever its modish green credentials, overwhelms its surroundings and joins several other uninspiring blocks completed or due for construction that look like they have been dropped in randomly from above. A corridor running through to the Principality Stadium tells you where priorities for the redevelopment lie – ensuring rapid access and egress to the stadium on rugby and pop concert days. Don’t be surprised if this processional way – and much of the rest of the Central Square environment becomes an unpleasant wind tunnel on winter days. The station frontage, too, is set to lose its clean, unobscured lines, buried under a steel and glass canopy for new retail – the obsession of Britain’s station owners. If money is to be spent on the station, how much more sensible and convenient it would be for passengers just to cover the exposed, elevated platforms against wind, rain and seagulls!

Cardiff’s planners have fallen in love with the idea that a landscape dotted with mini-skyscrapers equals prosperity so that it would seem anyone with a plan for a multi-storey building is shown the red carpet.  A towering stump has now emerged to overpower the former Pembroke Terrace Presbyterian Church of Wales in Churchill Way, catering for the latest developers’ fad – student accommodation. Another student block developer was sufficiently emboldened to put forward plans for a corner of Park Place previously occupied by solicitors, Blake Morgan, which would ruin the setting in which Cardiff’s most important ensemble of buildings – the City Hall, Museum, and Law Courts sits.

As marketing expert Roger Pride has recently pointed out, by contrast the few fine old buildings Cardiff possesses lie neglected and he rightly calls for more imaginative uses for architectural gems, particularly around St. Mary Street and not yet more bars and restaurants. He lamented the loss of Cory Hall opposite Queen Street Station and the neo-classical fire station in Westgate Street (now the site of a hideous car park). He could have mentioned others that have gone, including the old Taff Vale Railway’s Queen Street Station itself, Ebenezer Welsh Congregational chapel, (swallowed by Marks & Spencer) and the vast Wood Street Congregational Church (where Southgate House stands).

Other historic buildings have languished for decades in a state of decrepitude, bridesmaids at the redevelopment wedding but never the bride: the GPO building in James Street and the adjoining Cory’s Building, or the buddleia-bestrewn Bute Street (Cardiff Bay) Station, believed to have been the work of Brunel. The GPO in Westgate Street, too, lies empty, and House of Fraser’s James Howell store awaits an uncertain fate. In case it does not continue in something like its present use, have the city’s planners even thought about an action plan to try to find an appropriate use for this iconic building or will developers determine what happens to it?

The student block bubble could, too, be about to burst, as declining student numbers suggest. Some developers have been trying to escape the conditions under which planning permission was granted, seeking temporary dispensations to let the apartments to non-students until demand catches up. This brings with it the danger that Cardiff – and many other university cities – will be left with unsuitable buildings that because they were meant for students have been built to much lower standards than is required for normal domestic occupation. If too many are built, or student numbers fall, they will need to be adapted for other uses or will remain empty.

It must be said, of course, that Cardiff is a succes d’estime.  The chefs Sarit Packer and Itamar Srulovich, writing in the Financial Times this summer, seem to have been blown away by their first visit, loving the Castle Arcade, the animal wall at Cardiff Castle, and the buzzing atmosphere. Indeed, Cardiff has established itself as a visitor destination, able, like historic Bath, Bruges and Bologna to support Hop-On Hop-Off buses around its attractions. Visitors, drawn to a weekend break or to attend a sports fixture, opera or a pop concert, seem impressed. As a city it punches above its weight.

One cannot help thinking, however, that not a huge amount of thought has gone into how the city’s constituent parts should be organised, what concentrations of activity should be allowed where, and what is appropriate in which place, leaving it with what the visitor stepping out of that art deco concourse at Cardiff Central might now regard as a bit of a (congested) mess. Nearly 20 years ago the distinguished architectural critic, Deyan Sudjic described the Cardiff Bay redevelopment as a sad example of a city that, given a choice between the second rate and the excellent, had no hesitation in grabbing the former with both hands. Plus ça change.

Rhys David is an author and economic commentator. This article also appeared on the website http://www.WalesBusiness.org

August 22nd, 2018

Nantgarw: The Welsh cog in world aeroengines

Posted on by Rhys David

Mention Nantgarw to Weng Jiabao, the Chinese premier, and his eyes will light up. The second most powerful man in the world’s most populous nation is one of a stream of dignitaries who have visited the giant GE aero-engine maintenance plant near the former mining village close to Cardiff and come away highly impressed. Indeed, on a  visit to London several years later he made sure the former Welsh Development Agency chairman, Lord Rowe-Beddoe, received an invitation to one of the occasion’s formal dinners and sought him out to tell him  he would never forget the hospitality he had received (or in all probability the opportunity to press some of the buttons on the huge pieces of test equipment on site).

GE’s 1.2m sq. ft Cardiff plant, like the Nissan plant in Sunderland or the Halewood factory of Jaguar Land-Rover, both of which have recently benefited from investment by their overseas owners, is an illustration that Britain’s less favoured areas can cut it in big and competitive engineering operations. Employing more than 1,000 highly skilled individuals, the plant, winner of the Company of the Year trophy in the most recent IWA Business Awards, is in the words of its Welsh managing director, Adrian Button,  harder to get into than Oxbridge.

It recruits from around 10 miles  for its 25 annual apprenticeships, receiving more than 900 applications in the latest search.  After an initial three years apprentices spend another two  training on the job before becoming fully productive,  a five year investment by the company in its staff.  There are a further 50 graduate or sandwich course interns who join for a year across a range of management and engineering disciplines and are then taken on if they and the company decide they like each other. “It’s not possible any longer simply to put an advertisement in the paper and recruit the people we need,” says Button.

With a turnover of more than £1.2bn a year GE’s Welsh plant is a big cog in the wheel that keeps the world’s aircraft flying, looking after a total of  90 power plants at any one time and sending back to airlines this year a total of 500 good-as-new engines that could then stay on wing for a period of five to six years and last up to 40 years. Engines are trucked into Nantgarw from many parts of the world and are subjected to inpection by borescope (a flexible telescope for looking into inaccessible locations) so that engineers can determine what work needs to be done.

Some may need to be completely disassembled into as many as 20,000 pieces, which will then be cleaned, non-destructively tested, and x-rayed, for the serviceability of each part to be determined. They are then repaired, replaced and put back together, firstly as modules. Some will be sent to other GE centres of excellence as far away as the US or Singapore for specialist repair. Nantgarw itself carries out such work on behalf of the group on large engine cases. After repair every engine is put through further tests typically lasting six hours, before a final test replicating conditions encountered in flying, in particular take-off.

The Nantgarw plant looks after several different engine types but principally the CFM56, the world’s most popular engine with 20,000 currently in service worldwide on narrow body aircraft. The plant also has other engine work, notably the GE90, the  biggest aero-engine in service, developed exclusively for the Boeing 777. “We are lucky here that the engines we have the capability for are leading-edge, new technology products. All airlines are looking to buy aircraft powered by the most efficient engines,”says Button, a Llantrisant native who joined GE as a quality engineer, then went off to run a GE ignition plant in Jacksonville in the US  before returning to manage Nantgarw.

Nantgarw’s competition is both internal and external from some 20-30 plants sharing at least some of its competencies across the globe. Some airlines, such as Air France/KLM and Delta in the US, have their own maintenance operations and indeed GE’s Welsh plant derives from a previous British Airways facility set up after the second world war. British Airways remains a big customer as, too, are Emirates and several Chinese airlines.  The low cost airlines –  big narrow body airline operators relying heavily on the CFM56 – figure prominently in the order book, preferring not to undertake their own maintenance. Easyjet, Ryanair, Tui and Thomson among others all send their engines to Nantgarw.

Business like this has to be won, however, not just in competition with other big maintenance organisations but against other GE plants. Parent GE, which has long held on to a position among the world’s top ten companies, with products ranging across financial services, healthcare, imaging and power generation as well as aero-engines, has aviation division plants at several locations in Britain, in Prague, Singapore, Malaysia, Brazil, and across the US. The CFM56 and the other engines Nantgarw works on is maintained in a number of these and they could either win or be allocated work the Welsh plant currently handles in negotiations the parent has with the airlines.

Nantgarw has managed to continue to thrive, however, generating profits for its owner. “We always run the risk of losing  to competitors. We are never the lowest on cost. Others will have rates of labour that are much lower but we win work based on the quality of what we produce here in Wales and on our turnaround times,” says Button. “Our workforce is highly skilled with a  technical background second to none. Another advantage, he asserts, is that as a small country Wales has the capacity to move quickly. Support from the Welsh Government  – which last year  helped to fund 100 posts being created to service the GE90 – has been strong. Close links have also been established with local universities, including, a few miles further north along the A470, Glamorgan, which has its own aeronautical department.

To continue to offer  high quality, well-paid jobs the plant must, according to Button, continue to win business to work on the latest GE engines. The Boeing 777’s new triple composite engine, is a target. “We would like to have the investment to offer that.” It is a business, too, in which nurturing good customer relationships is vital. The Nantgarw team has to make sure that airlines from as far afield as China that currently entrust it with their aircraft are willing to continue to do so.

As a good corporate citizen, GE has reciprocated Government and local support. Its  social responsibility programme  has won  a number of awards, including at another IWA  ceremony, the Inspire Wales Awards 2012, for its work with Llamau, a charity helping socially excluded, homeless young people in south Wales. It has strong relationships with a number of schools in the area and has recently broken through the £1m mark of support for children’s hospice, Ty Hafan. It has also made efforts to attract more girls on to its apprenticeship schemes but finds itself  up against the choices girls make at 13. If they have not been able to offer maths and sciences at GCSE they are unlikely to secure places.

As far as possible purchases are made locally, though much of the plant’s requirements has to be obtained from international suppliers. Nevertheless, some £20m a year is spent locally on support and other purchases, and items such as tools are also obtained locally if possible.

Complacency would nevertheless be dangerous. The aviation business is already growing much faster in developing markets such as China, India, Brazil and the Middle East than in Europe where a greater degree of saturation has been achieved and it is inevitable that aero-engine maintenance will grow just as rapidly in those territories. It also means, however, there is a bigger world market for Nantgarw to chase.

More could be done, Button believes,  to improve Welsh competitiveness. GE would like to bring freight into Cardiff Airport but finds it has to use London Heathrow or Manchester. Nantgarw reports to GE Aviation’s headquarters is in Cincinnati so a direct flight from Cardiff to the US would also be helpful, a priority other businesspeople in Wales have also identified.

The key, however, is to stay at the forefront of GE Aviation’s business. “The plant currently has the capability to work on engines that have a potential life of 40 years so we have that market in front of us. We have to maintain that  position. We are not going to sit back. We must go out and grow, “ Button says.

Rhys David

June 18th 2012