Response to the Wales Transport Strategy

January 2021 A NEW WALES TRANSPORT STRATEGY RESPONSE FROM THE RAILWAY INDUSTRY ASSOCIATION (RIA) 1. INTRODUCTION 1.1. This submission constitutes the response from the Railway Industry Association (RIA) to the draft Wales transport strategy (“A New Wales Transport Strategy”) consultation published by the Welsh Government.

2. BACKGROUND TO RIA 2.1. RIA is the trade association for UK-based suppliers to the UK and world-wide railways. It has some 300 companies in membership covering all aspects of rolling stock and infrastructure supply and covering a diverse range of products and services. As well as most of the larger, multi-national companies, 60% of RIA's membership base is comprised of SMEs. 2.2. The Oxford Economics 2018 report shows that the UK rail sector contributes annually over £36bn Gross Value Added (GVA) to the UK economy, employs some 600,000 people and generates £11bn in tax revenues. For every £1 spent on rail, £2.20 of income is generated in the wider economy, meaning rail is not just an important sector in its own right, but it is also crucial for UK plc, its economy and connectivity. Rail has been a growing industry with the number of rail journeys expected to double in the next 25 years, along with significant growth in rail freight traffic, regardless of shocks such as the present Coronavirus crisis. The full report Oxford Economics report can be accessed here.

2.3. RIA provides its members with extensive services, including: • Representation of the supply industry's interests to Government, Network Rail (NR), TfL, HS2, ORR and other key stakeholders; • Providing opportunities for dialogue and networking between members, including several Special and Technical Interest Groups; • Supply chain improvement initiatives; • Provision of technical, commercial and political information every week; • Export promotional activity, through briefings, visits overseas, hosting inwards visits; and • Organising UK presence at exhibitions overseas.

3. CONTEXT 3.1. The Welsh Government wants to look at where responsibility lies for the management of rail infrastructure in Wales, how funding is allocated to rail infrastructure projects across the UK and the share of investment Wales has received since 1994. The draft strategy also looks at the impact of the Covid-19 pandemic on the rail network in Wales, and the potential opportunities of the Union Connectivity Review.

4. WELSH GOVERNMENT’s 20-YEAR PLAN 4.1. The Welsh Government’s 20-year ambitions cover four areas. They need to be good for: i) the Welsh people and communities; ii) the environment; iii) the economy and places; and iv)) culture and the Welsh language.

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4.2. RIA believes that railway projects need to be a key part of the Welsh Government’s plans for transport and infrastructure development across Wales in the next 20 years. Railway projects have a vital role to play both in national and local development – they provide green investment across towns and communities in Wales and can generate economic growth, investment and jobs.

4.3. RIA believes that rail can support the Welsh Government’s commitment to achieve net-zero carbon emissions by 2050, in line with the 2016 Paris Agreement. Railways provide a clear and clean public transport mode for the mass movement of people across Wales, as it has the lowest greenhouse gas (GHG) emissions in the UK, with an available and technically proven route to zero carbon via electrification or, where appropriate, zero carbon self powered rolling stock.

4.4. RIA also supports the Welsh Government’s intention to encourage the movement of more goods by rail freight. This will lead to lower carbon emissions from road vehicles and reduce congestion on Welsh roads. According to the Department for Transport Rail Freight Strategy 2016, rail can deliver 76% emission reductions for freight compared with road. There is a great opportunity to decarbonise the entire goods route delivery, not just the last mile, by shifting more freight onto rail.

4.5. However, there is a need for far greater clarity and certainty on the policy roadmap for rail decarbonisation. Existing targets such as no-diesel only traction by 2040 and net zero carbon by 2050 need to be underpinned by further policy, guidance and targets so that the rail supply chain can make informed decisions now.

4.6. Network Rail’s Traction Decarbonisation Network Strategy (TDNS), published in September 2020, and the UK Government’s efforts to create the Transport Decarbonisation Plan, will bring some much-needed clarity of the development roadmap for alternative traction solutions, including battery and hydrogen powered trains, as well as available funding to electrify the network. RIA welcomes the Welsh Government's commitment to electrify the Core Valley Lines and urges it to continue working together with industry stakeholders to further develop the decarbonisation roadmaps.

4.7. Whilst the Coronavirus outbreak poses a challenge to the rail supply sector, in the long term it is clear that continued and accelerated investment in rail can help provide an economic recovery and achieve the UK Government’s aim of ‘building back better’. RIA believes that the need to travel and to transport freight by rail will not go away in the next 20 to 30 years and beyond. Therefore, the network cannot be neglected until customers – including passengers and freight – return, continuing to build and improve the network will generate jobs and investment, and deliver an even better, more connected, transport system for the future.

4.8. Improving access to Wales via public transport, including rail, will support the Welsh economy significantly (including both domestic and international tourism). RIA celebrates the Government’s aim to maintain and reinvigorate the heritage railways and would encourage the Welsh Government to further recognise the potential of the Welsh heritage railways as a catalyst to level up skills for the next generation of railway professionals.

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5. 5-YEAR PRIORITIES 5.1. The Welsh Government is looking to expand on various five-year priorities, including better connectivity across the transport network, upgrading public transport services, improving the image and cost of transport to the customers, improving safety and accessibility, and supporting innovations to achieve a more sustainable network.

5.2. Rail investment is crucial to connectivity and offers three benefits, as part of economic recovery: • Growth: Rail projects generate significant investment – for every £1 spent on the rail network, £2.20 is generated in the wider economy; • Geography: Rail projects support investment in all regions and nations of the UK, including areas of social deprivation where investment and regeneration is urgently needed – supporting the Government’s ‘levelling up’ agenda; and • Green: Rail is a green mode of transport and investing in rail will ensure the economic recovery is also an environmentally beneficial one. Rail is the only mode with a ready solution to zero carbon long distance heavy freight and has a major role to play in modal shift.

5.3. RIA welcomes the Welsh Government’s intention to support technological, digital and operational innovations across the transport network. In particular, RIA supports the need for a facility of the kind proposed by the Welsh Government’s proposed new Global Centre of Rail Excellence in Wales. There is limited capacity for rail vehicle and infrastructure testing capacity in the UK and facilities of the specification proposed, particularly the loop tracks and multi-disciplinary capability, will be a valuable addition to the UK capacity and capability. A facility of this nature will create an anchor for a regional education and innovation eco-system.

5.4. Coronavirus has highlighted the need to deploy proven but not widely utilised technologies including effective use of data and remote monitoring equipment. These technologies can enable rail services to be more responsive to demand, enable off site working and improve the efficiency of the railway. Although the Lab by Transport for Wales is very welcome, more could be done to create an environment which incentivises and supports innovation in rolling stock and operations – for example more targeted innovation, effective use of procurement for difference and creative match funding to leverage Government rail funding. Rail must be a priority when it comes to wider zero carbon and air quality funding initiatives.

5.5. RIA welcomes the Welsh Government’s intention to work closely with partners and the UK Government to achieve a well-maintained and managed transport infrastructure, and encourages to maintain a close dialogue with suppliers and continuing to engage with the industry. This will allow the supply chain to prepare for the workload and work best with the Government and other bodies to continue to deliver a world class safety standard on the railways.

6. A ‘MINI PLAN’ FOR RAIL 6.1. The Welsh Government has set out ‘mini plans’ for each transport mode and sector. The Welsh Government has recently taken on direct responsibility for the Core Valley Lines in Wales, with services delivered by Transport for Wales. RIA welcome this initiative not only 3/4

for its local transport benefits but for the benchmarking opportunity it provides with other Infrastructure Managers. The Welsh Government works closely with the UK Government to improve rail services in Wales, whilst also continuing to make the case for full devolution of rail to Wales.

6.2. RIA recognises the move towards devolution of funding can be an effective way of prioritising transport asks and ensuring efficient delivery which reflects local interests. Subnational and regional strategic transport bodies, such as Transport for the North, Transport for Wales, and Midlands Connect, can help to ensure that transport projects are more closely linked with local economic priorities. To be effective, however, these bodies need long term funding certainty to inform their strategic plans. This gives suppliers certainty and allows them to invest in skills and their companies, levelling up the local economy.

6.3. RIA agrees with the Welsh Government on its plan to work with Network Rail and the UK Government to decarbonise the Welsh rail network and would urge that rail suppliers are also included in this engagement, as key stakeholders.

6.4. The UNIFE World Market Rail Study 2020 predicts annual market growth of between 1 and 2.3% until 2025 is predicted, with annual volumes of up to Euro 240bn pa and countries are investing in rail infrastructure to support post-coronavirus zero carbon sustainable growth strategies, providing exporting opportunities. RIA regularly welcomes Welsh companies on overseas trade missions, with six Welsh companies joining us, supported by the Welsh Government on our RIA/DIT Virtual Rail Trade Mission at the end of January and works closely with the Welsh Government on support for your companies at International Rail Trade Fairs, such as Innotrans.

If you would like further information, please contact Policy Executive Isabella Lawson Isabella.lawson@riagb.org.uk , or call 07964 263836.

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