1. This additional note is intended to clarify some of the points made by the Committee, which may rest on a misunderstanding of the language around demand, capacity and growth which is used in the report.
2. The growth figures which were highlighted by Mr Hill in paragraph 2.4 are revenue growth predictions.1 These are the train operators' own predictions as set out in their bids. As the report indicates, DfT has its own internal projections of likely revenue growth which may differ from those of operators. It is also true that train operators are likely to revise these estimates as the business develops, and have contingency plans (such as reducing costs) if the levels of growth do not materialise.
3. The July 2007 White Paper Delivering a Sustainable Railway said that the Government "wants the industry to be able to accommodate a 22.5% increase in passenger demand by 2014". This is the figure referred to in paragraph 3.5 of the NAO report. This uses passenger kilometres as the measure of demand. It is based on the total kilometres travelled by passengers on the English/Welsh railway network in 2007 (shortly before the publication of the White Paper). This target was broken down by Network Rail route in the accompanying High Level Output Specification (HLOS). HLOS also specified levels of peak demand to be accommodated, alongside specific loading factors at busy stations (for instance a increase of 5,300 additional passengers arriving at London Victoria in the three hour peak, with a maximum average load factor of 67% by 2014). These targets are set out individually for the biggest commuter centres: London termini, Birmingham, Cardiff, Leeds, Manchester. More detail is available in the White Paper and the HLOS, which is driving infrastructure improvements and the construction of 1300 new trains by 2014.
4. The capacity percentages set out in table 11 on page 20 of the NAO report were prepared on the basis of a different measure. Table 11 counts the total number of passengers that can be carried by the available fleet (seating plus a standing allowance) as a snapshot-for instance if it were all parked in the depot. This measure is relatively simple to calculate and understand, but misses many of the key variables of capacity in practice. The capacity which is available to passengers during a three hour peak will depend on the timetable, the calling pattern and the rolling stock, with many trains being used more than once. The increase of 22% in this fleet capacity by 2014 is therefore not comparable to the detailed peak targets in the HLOS or to the overall aim to accommodate an all-day increase in passenger kilometres of 22.5% by 2014.
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1 Train operator revenue can increase due to a number of factors, including more passenger journeys, an increase in regulated fares (currently rising at RPI + 1%), an increase in the face value of like-for-like unregulated fares, a change in the mix of fare types (such as more first class sold), a reduction in ticket evasion (for instance through station gating), or an increase in other sources of revenue such as advertising spaces and car parking.