It was very exciting to be present at the reopening of the new London Bridge station a few weeks ago. Not only is it a widely-acclaimed piece of architecture, it is part of the railway's long-term plan for change that will regenerate the surrounding area, playing an expanded role in connecting communities from the south coast to East Anglia, spreading opportunity to many other towns and cities.
It is a station of which all of us who work on the railway can be massively proud, and one for which it was a privilege to be present for the unveiling a few weeks ago. The full opening of the concourse and the opening of the final five platforms, allowing Cannon Street trains to resume calling at the landmark new station, is an investment that will improve the experience of commuters across London and the South East.
Completed on-time and on-budget over Christmas as a crucial part of the £6 billion Thameslink Programme, it was led by Network Rail in conjunction with Govia Thameslink Railway and Southeastern, supported by the Department for Transport and delivered by a number of contractors through the supply chain.
What's especially exciting is that the new station is the perfect example of Britain's partnership railway in action. It was not merely the work of one organisation, but, like many of the most significant railway projects, the result of years of both the public and the private sectors working together in a very close relationship to achieve a huge boost to the area economically.
No-one can pretend that the work to rebuild London Bridge was straightforward, and we thank passengers for their patience, but that's the case with any honest relationship between partners when trying to solve a difficult problem.
Of course, it wasn't just London Bridge where the action took place. Nationally, 260 projects, worth over £160m, finished on time. At Liverpool Lime Street, a signalling upgrade as well as upgrades to platforms and the installation of overhead electrical equipment was undertaken, a £340m railway investment in the Liverpool region as part of the wider Great North Rail Project which will enable an extra three services per hour, including direct services to Scotland. Between Preston and Blackpool, work has been underway to electrify the line. And in the Southampton area, an £8m renewal of track infrastructure took place, with more than 100 people working shifts 24 hours a day to replace 6,000 metres of cabling and 200 metres of track near Southampton Central. More than 32,000 rail workers – working a combined total of 522,000 hours - helped to deliver the successful ten-day investment programme that will improve journeys for hundreds of thousands of passengers and businesses.
The railway has learned a great deal from these projects and applied them to the redevelopment of that other great London terminus, Waterloo, part of a much bigger upgrade across the South Western network. And it will continue to do so as other major redevelopment projects are progressed. We look forward to delivering many more major upgrades: 2018 brings with it newly electrified lines to the west of England, the North West and Scotland to name just a few places, and a number of new trains to make our customers' journeys faster and more reliable. Transport for the North has just announced exciting plans for Northern Powerhouse Rail which will transform rail travel between the North's six main cities and Manchester Airport.
Our aim is to work together to connect communities, build the economy and deliver a better railway across Britain. Investment is key to delivering real improvements.
What else will 2018 bring for the rail industry? It will be a challenging year ahead. There is discussion about the future of franchising. It is important to remember that when franchising began two decades ago, the railway ran at a £2bn a year operating deficit for taxpayers. With passenger numbers, and thus revenue, growing considerably it now generates a £200m operating surplus for taxpayers. No operator will be awarded a franchise unless it can demonstrate best value for money for the taxpayer and the ability to deliver excellent services for passengers.
There is also an ongoing debate about whether the railway should be re-nationalised or not. This is for politicians to decide, but I believe that a changing and improving public and private partnership is the best model for Britain's railway and offer customers and taxpayers the best of both worlds. That is why in October passenger and freight train companies, Network Rail and their suppliers came together to launch 'In Partnership for Britain's Prosperity', a single long-term plan to change, invest and secure prosperity across the country.
Seemingly simple changes won't address fundamental challenges around funding, investment and fares that the industry faces. Private sector operators run services, specified and controlled, including many fares, by central or local government. Network Rail is a public-sector body and is transforming itself by devolving decision-making to local teams to enable effective partnership focused on the end customer. Rolling stock companies and the supply chains are privately-owned and diverse. Government investment in turn has been bolstered by private investment, at least £11.6bn, mainly in rolling stock, much of which is in 5,700 new carriages – which would be put at risk if the industry model were to change.
Finally, there has been the recent fare rise increase which has been criticised by many. Increases to regulated rail fares are set by governments in line with Retail Price Index (RPI) inflation from July the previous year. Other fares are affected by government too: where customers have more choice about how and when to travel, prices are set by rail companies to enable them to make payments to government. But money from fares is underpinning the industry's long-term plan to deliver the railway customers want and the country needs – the partnership railway doing more for the economy, customers, communities people. The Transport Secretary has stated his desire to move to the Consumer Price Index which we would support, but it is likely that the government will always have some involvement in the setting of fares. On average, fares will rise by less than inflation this year. For every pound paid in fares, 97p goes directly back to operating and improving services.
Working together in partnership across the industry and with government our long-term plan to improve will secure £85bn of additional economic benefits while enabling further investment and improvement for customers, communities and our people.
We look forward to being part of part of the debate during this important year for the railway and I hope to explore some of these issues with you in more detail as the year progresses.