Page 3: The market
In order to invest intelligently in rail provision to meet increasing demand, it is necessary to understand how demand will change over time and the factors that will contribute to this change. Railtrack is therefore developing a number of models which will enable the organisation to understand both the overall level of demand for transport services and rail’s potential within that demand.
The passenger transport market has grown in line with the growth in economic prosperity. In Britain, total passenger miles travelled have increased by 250% since 1960. The rail market, however, has shown little overall growth (the lion’s share of the market increase has been car transport). Government and industry forecasts show that the demand for passenger transport will increase substantially over the next 25-30 years. The critical factor for Railtrack is what element of this demand will be for travel by rail.
In the years leading up to 1998, the rail passenger industry experienced a period of very substantial growth with rates of increase of 10% a year. However, optimism associated with this figure needs to be weighed against the fact that the mid 1990s was a period of economic boom in which growth would be expected.
Currently, Railtrack’s central forecast is that rail passenger demand will increase by around 15% over the next ten years. However, figures ranging from 5-30% are possible. The higher figure would be associated with Government policies such as taxes on workplace parking and steadily increasing fuel prices.
London is a very important part of the passenger transport market – around 48% of all peak time journeys to central London on public transport are by rail. Increasing use is being made of rail for off-peak journeys for leisure and shopping. Railtrack believes there is a considerable opportunity for growth in the use of rail travel in and around London.
Currently, three-quarters of all rail freight lifted (measured in tonnes) and carried (tonne kilometres) is linked to just four industrial activities - coal-fired electricity generation, the production and distribution of iron and steel products, petroleum products distribution and the construction sector. However, for the first time in many years, rail freight value is growing, with a 5% increase in tonne kilometres in 1997/98 in comparison with 1996/97. Intermodal and international traffic is growing by 12% and 20% per year, respectively.
Business organisations are beginning to recognise that they will need to seek alternatives to road transport for an increasing proportion of activities. The Government is expecting private industry to pay the full environmental cost of distribution, e.g. by increasing fuel taxes and possibly, in the future, through road pricing. Railtrack estimates future growth scenarios of 80% in rail tonne kilometres, with alternative figures ranging from 40% to nearly 200%.
An important part of any justification of investment in rail development is to show how this development will fit in with the current network. This can be exemplified by Railtrack’s existing objectives for the development of its investment in infrastructural developments and services in London, i.e. to:
- maximise use of the existing network and ensure that the existing network is managed efficiently and used safely
- develop new journey opportunities and new markets including better interchanges with other transport modes
- develop cross-London routes and orbital links to minimise journeys that currently involve crossing central London
- ensure that enhancement schemes are planned to meet the needs of customers, the train operating companies, and their customers.
An example of a key plan to meet these objectives in London is the Thameslink 2000 project, which will provide additional routes through the heart of London by upgrading and installing extra connections to the present Thameslink route. On completion in 2004, the number of train paths through London will be increased from eight each way per hour in the peak to a maximum of 24 each way. The route will be capable of operating 12 car-length trains and cross-London journey times will be reduced.