Deloitte response to rail reform proposals
8 March 2012
Responding to the rail reform proposals outlined today by Justine Greening MP, Secretary of State for Transport, Ian Simpson, partner and head of transport at Deloitte, the business advisory firm, said:
“There are significant challenges in turning today’s announcement into real cost-savings for the rail industry.
“The Command Paper has set the broad direction of reform with announcements on franchises, fares and ticketing, governance and collaboration. All these levers now need to be pulled if the industry is to meet the efficiency target of £3.5bn savings per year by the end of the decade.
“To do this, the industry needs a deeper understanding of its cost bases and drivers with targeted plans to reduce costs using new processes, systems and organisational structures. More fundamentally, however, a change of culture across the industry will be required.
“The move toward longer franchise agreements will help support long-term investment in the railways and go some way to improving performance in the rail sector but it is not a panacea on its own.
“On smart-ticketing, the challenge is to get all the stakeholders involved in transport to agree and adopt a common approach. Technical standards exist for interoperable ticketing, but much remains to be done on the commercial and practical arrangements. In particular, a comprehensive settlement system to be agreed, designed and built.””
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The information contained in this press release is correct at the time of going to press.
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