(3 years, 1 month ago)
Lords ChamberI hear what the noble Lord has to say. Of course, it is not quite that simple, because some schemes which were taken out by Beeching will not be replaced because of population changes and all sorts of different reasons. But, of course, we do welcome ideas and I note his intervention on the Penrith line. But it is the case that, even where we want to restore the railway, the infrastructure in place needs to be substantially rebuilt to meet modern safety standards.
Highways England states that it is not funded to enable cycling and walking projects. But if local authorities are not able to take on a property, Highways England is responsible for making it safe, which sometimes costs a great deal of money. Can the Minister reassure us that the Government will consider the proposal to ensure that Highways England can use that money instead as a proper part of a partnership with local authorities in order to create proper cycling and walking projects?
I say to the noble Baroness that we would run the risk there of sharing responsibilities across two very disparate organisations that have different priorities. In my view, local authorities should be prioritising cycling and walking projects. They are able to take over these structures—Highways England would welcome them with open arms—such that they can put them within their active travel plans and make them useful for the future.
(3 years, 2 months ago)
Grand CommitteeMy Lords, I thank the Minister for her introduction. Like my noble friend Lord McNally, I am concerned that such lengthy SIs receive only seven-minute speeches, which inevitably undermines attempts at scrutiny.
I fear that my questions will be rather more down to earth than those of one or two of the previous speakers. On page 65 of the Space Industry Regulations, Regulation 95 says:
“A spaceflight operator must ensure that the spaceport or other place used for the operator’s spaceflight activities is fit for those activities.”
That is a very loose statement and is in itself pretty meaningless. Can the Minister explain what that will mean in practice?
Regulation 98 refers to the loading of dangerous goods on to a launch vehicle and the need for that to be specifically permitted by licence. The term “dangerous goods” in relation to spaceflight opens in my mind a worrying range of possibilities, so can the Minister explain what this would cover and how it will be dealt with as part of the licensing process?
Chapter 6 of Part 11 refers to security in relation to US technology. From the Explanatory Memorandum, I see that we have signed an agreement with the US on that country’s participation in space launches from the UK. This is probably a very good idea, but can the Minister tell us more? How extensive is that agreement? When was it signed? Have we signed or are we planning to sign agreements with any other countries? We remain a member of the European Space Agency, so are there plans to sign agreements with any European countries?
Section 4 of the Space Industry Act allows for exemptions to the need for a licence. This involves an element of recognition of authorisations and approvals issued by other countries. How will this be managed? Will it be done on an ad hoc basis, with one exemption for one potential launch, or will it be systematic on the basis of a country-to-country agreement, as referred to in the agreement with the US?
The CAA has been appointed as the single regulatory body for all aspects of commercial spaceflight. My noble friend Lord McNally asked about capacity issues. The Minister will know that I have said several times before that the CAA seems to be the maid-of-all-work on aviation, from regulating private aviation to drones, bringing home stranded passengers and now spaceflight. There has been criticism lately that, as an organisation, it is simply overstretched and has not been able to concentrate as it needs to on issues such as private aircraft safety or ensuring that airlines refund passengers appropriately when flights are cancelled. Can the Minister assure us that it will be given the additional funding it will need?
I have concerns about leaving the CAA solely in charge. For instance, licensing will require consideration of issues of national security, so what is the role of the security services, and will they have an automatic input into CAA decisions in this respect? After all, satellites raise highly technical and complex security issues.
The licensing of spaceports involves the evaluation of risks and environmental impact. This is a very crowded island, and even sparsely populated areas are not far from densely populated ones, so the potential risks are greater. Will there be an obligation on the CAA to consult local authorities and environmental bodies before granting a licence? The latter are of course different in the four nations of the UK, and planning legislation varies significantly.
As my noble friend Lord McNally said, HS2 has proved how controversial infrastructure in unspoiled rural areas can be. Protestors at spaceports would pose a particular hazard. How will the CAA work with and consult local police forces? Can the Minister spell out for us how devolution is taken into account in these regulations? The siting of spaceports, whether in north Wales, Cornwall, Scotland or wherever else, will be disruptive and, therefore, must be done with the grain of local opinion.
I recall that, during debates on the Space Industry Act, it emerged that, prior to a launch, local roads near the site would have to be closed for several days for security reasons. That would be disruptive to the local economy and services, especially in remote rural areas, where the closure of one road may lead to an additional round trip of 20 miles or more—so we must work closely with local people for this to work well.
Obviously, so-called return operators also have to be licensed, and the return might well be into the sea. UK coastal waters are also very crowded, so what consultation must the CAA undertake with the coastguard and other maritime agencies before granting a licence? I realise that the Minister will be unable to answer all my questions in the time that she has been allotted, but I am sure she will agree to write to me about those she cannot tackle now.
(3 years, 2 months ago)
Lords ChamberI think that that is a rather extreme assessment of what I have said so far. I reiterate that the integrated rail plan must come first. Without it, it is pointless having a plan for Northern Powerhouse Rail because, of course, the whole point is that everything has to be integrated. As I said previously, we will work with Transport for the North, which will submit the business case for Northern Powerhouse Rail. Once we have received that, we will be able to set out how the project will go forward.
Does the Minister acknowledge that continued speculation about the future of Northern Powerhouse Rail and the issuing of new timetables by the East Coast Main Line, which reduced rail links for northern cities, simply serves to undermine confidence in government promises to level up and therefore reduces the likelihood of private sector investment in northern cities?
The absolute priority for this Government is to get it right. Endless amounts of pressure—questions such as “When will it be published?”—is probably not particularly helpful and leads to an awful lot of speculation. As I have said previously, we are taking due consideration of what stakeholders are saying and we are working very hard to come up with a robust, deliverable plan. That is exactly what this Government are going to do.
(3 years, 2 months ago)
Lords ChamberI think the noble Baroness has just answered her own question: she stated that HS2 would be separate from Great British Railways. That is the case but in any event, as she pointed out, HS2 is under construction. It will be a while before it is an operating railway and then it will work closely with GBR.
My Lords, the Williams-Shapps report promises welcome expansion and better co-ordination of the railways. The Government also say that they are committed to levelling up the north, so can the Minister explain to us why the proposed new timetable for the east coast main line halves the number of trains from Newcastle to Manchester via Durham and Darlington? It also cuts one-third of the trains to London from Berwick and Darlington. In what sense is this expansion and levelling up?
As it happens, I had a conversation yesterday with all the northern leaders when we met as the northern transport acceleration council. They raised this issue, which is of course one of capacity because there are more services, for example, between Newcastle and London. We have heard the pleas from various areas of the north on the timetabling. We are taking that away and doing what we can, but this is one of the reasons why we need Great British Railways. Timetabling is fiendishly complicated and we need to ensure that local areas are heard and get the services they deserve.
(3 years, 2 months ago)
Lords ChamberTo ask Her Majesty’s Government what discussions they have had with representatives of the international travel industry about the impact of the action being taken by the Competition and Markets Authority against BA and Ryanair regarding refunds for customers.
My Lords, the investigation by the Competition and Markets Authority into British Airways and Ryanair is ongoing. It would be inappropriate for the Government to comment on an ongoing investigation by an independent regulator, but we have been clear that the rights of consumers and the obligations of businesses remain unchanged. It should not be unduly difficult for customers to receive a refund when they are entitled to it.
One struggles to think of another product where customers pay such a high price so far in advance of receiving a service. Yet some airlines have, as the Minister has indicated, avoided making refunds when they could not deliver that service. This has left not only passengers out of pocket but has had a disastrous impact on travel agents who often have to refund their customers without receiving the fare money back from the airlines. Have the Government investigated any of the proposals from Which? that passengers who have paid in advance for their flights should have their payments held safely in trust and disbursed to airlines at the time of the flight? Does the Minister agree that a resolution to this problem is long overdue and that the actions of a small number of airlines are damaging the industry as a whole?
The Government are taking a keen interest in this issue, but it should be noted that refund issues between airlines and travel agents are a contractual matter between those two businesses. The Civil Aviation Authority does not have a role in enforcing such contracts. On the action we are taking on behalf of consumers, the CAA has reviewed airlines’ compliance on refunds. The authority did this last summer and it has since worked collaboratively with airlines to improve their performance. I am pleased to say that most airlines are now paying refunds within seven days.
(3 years, 3 months ago)
Lords ChamberTelevision has given us “The Great British Bake Off”, “The Great British Sewing Bee”, “Great British Menu” and “Great British Railway Journeys” as programmes for our delectation and entertainment. Now the Williams and Shapps plan, determined not to be outdone, but hardly in a display of originality, is offering us Great British Railways. The Secretary of State is at pains to tell us that the proposed changes for our railways, extending the role of the public sector, are simplification not renationalisation. The changes may not mean full public ownership but they are certainly a further step closer to it, and would make the final switch easier, which is no doubt why the Secretary of State doth protest so much.
The plan does a demolition job on the failed, fragmented privatisation of our railways and the insuperable problems it has created, which the Secretary of State now admits can no longer be allowed to continue. The plan is basically a statement of hope and assertions about what the proposed new structure and Great British Railways will deliver. The shadow Secretary of State has already written to Grant Shapps with questions on 15 initial specific points and we await a detailed written response. I will, though, make a few points now.
The plan makes great play of 400 jobs that exist to determine the allocation of blame for delays. The need to do this will seemingly disappear under Great British Railways. Yet the Government talk about incentivising train operators to run services on time. Whether that also means penalties for running services late is not clear. Either way, there will presumably still be a need to determine where responsibility for a delay lies, since it would hardly be appropriate to attribute to a train operator, on a management contract with incentives to run services on time, responsibility for a passenger train delay caused by a track or signalling failure or another operator.
We need to know far more about how the proposed incentives regime will work and its potential rewards and for whom. Even Great British Railways is going to be incentivised. The plan refers to the perverse effect of incentives under franchising arrangements. We could be in danger of going down that same path again, despite the repeated assertions in the plan to the contrary. Train operators will continue to bear cost risk, but there will be incentives to run trains to time, to run clean trains, to run safe trains, to run high-quality services, to manage costs, to attract more passengers and to work with other railway organisations for the greater good. It will be some bureaucracy that will be needed to devise, manage and supervise that sort of regime if these are more than token gesture incentives—and all because the Government are not prepared to countenance Great British Railways operating the rail services itself.
That is also why the plan represents change from what we have at present, rather than the transformative, generational change that the Secretary of State wants us to believe. There is little more than a passing reference in the White Paper to the rolling stock leasing companies. No case has been made for why, almost alone, they need to continue in their present form, or indeed at all, in a situation where Great British Railways will have ownership of the railway infrastructure and assets, apart, it seems, from the rolling stock. This is despite the plan asserting that the new structure will increase Great British Railways’ purchasing power and economies of scale, and bemoaning the fact that we have so many variations in rolling stock.
Likewise, from reading the White Paper one would hardly know that we have elected metro mayors with responsibilities over transport. Giving metro mayors much greater responsibility, certainly for local rail services within their areas, and the associated resources, is not something that appears to be being entertained. It looks as though Mr Grayling’s boast as Secretary of State that he would not hand over control of rail services to a Labour mayor may still inform the Government’s claimed non-ideological approach.
We will need clarity on what specific responsibilities and powers are being transferred from the Department for Transport to Great British Railways, and what specific railway responsibilities and powers are being retained or created within the department. Likewise, we will need clarity on the impact of the proposals on the powers of the devolved Administrations. I assume that the transfer of undertakings regulations will apply to all staff transferred from their existing employer to Great British Railways or any other railway organisation. Legislation will be required to implement some of these proposals, not least in relation to the creation, governance, roles and responsibilities of Great British Railways and other statutory bodies whose remit is changed.
The plan refers to financial resources covering five-year periods. One assumes that also applies to Great British Railways. Those resources need to be guaranteed if service levels and quality are to be maintained and improved, and rolling programmes of investment sustained, but the plan does not make it clear whether that will be the case or how. We are already hearing noises that the Treasury is demanding significant savings. Indeed, the plan asserts that the new structure and working procedures will save £1.5 billion.
I pay tribute to the role and work of railway staff during the pandemic. I hope the Government are determined to see our railways make a full recovery from its effects and then develop further, because the plan blows a bit hot and cold on this. The foreword says:
“Much of the old demand will return … This government profoundly believes in the future of the railways. Without them, our cities could not function … We are growing the network, not shrinking it.”
Yet tucked away in the section of the plan on “Empowering rail’s people”, it states:
“The future of the sector hangs in the balance.”
That is a very different tone. Which represents the Government’s true thinking and intentions will become clearer when we find out whether the emphasis of these changes is on achieving a rapid reduction in costs, at all costs, or on growing the network and recognising that the value of our railways to the quality of life of our citizens and the economic well-being and strength of our country extends far beyond the content of a Treasury financial spreadsheet.
My Lords, I strongly welcome this long-overdue plan for reform and thank Keith Williams for his work on this. My only regret is that it has taken this long to get here. The industry has been crying out for reform for many years; one in three trains was late in the last year before the pandemic and two-thirds of contracts since 2012 have been awarded to single bidders—hardly a sign of a vibrant, competitive industry.
However, unlike some, I do not believe that the answer lies in a return to British Rail, which ended in stagnation and closures and as the butt of rather predictable jokes. This Statement harks back to the glory days of the 19th century, but the last 60 years have all been a bit of a mess. For a long time, the Transport for London contract structure has been touted as the answer, with the appropriate balance of risk for private contractors yet a fully integrated service. However, Transport for London has said publicly that it took it two decades of experience to get to the ideal contract model.
This is welcome, but it does not mean it will be easy—I do not for a minute imagine that the Minister thinks it will. The sheer scale of the thing is a problem. Great British Railways will be a massive organisation, bringing together Network Rail, many other DfT functions and some of the Rail Delivery Group functions. Currently DfT has three director-generals to cover rail services alone. The new organisation will be enormous and complex, and freedom from direct government interference will be essential for success.
The first problem is that, despite the name, Great British Railways is not really British, because it does not cover most of Scotland, Wales, Northern Ireland or London. Those have devolved services. So, my question is an important one: how will GBR liaise and link in with those other services? It is essential that that link is smooth and coherent. And what about the devolution of services to local authorities, which has been encouraged lately? Local authorities can add a great deal to the standard of service. There must be a role for them in order to raise the threshold. I rather feel that the word “Great” will be at the mercy of headline writers the first time something goes wrong—but I think there is the potential to get a coherent picture of the whole, so long as devolution is taken fully into account.
In interviews, the Secretary of State has indicated the likelihood of fare rises. First, how much power will the Department for Transport have to intervene and dictate fare rises? Secondly, is it wise to raise fares at a time when the Government are trying to reduce emissions and rail services are desperately trying to attract passengers back after the pandemic? Fares are up 50% in real terms since 1997; they are the most expensive in Europe. I welcome the details on flexible season tickets and other long-overdue innovations, but the Government predict savings of £1.5 billion within five years—so are fare rises justified?
The Minister will tell us again that taxpayers have subsidised the railways to the tune of billions of pounds in the last year. In fact, they have subsidised train operating companies, not the passengers themselves. Taxpayers also subsidised Eat Out to Help Out, but the Government are not expecting restaurant customers to pay more now to refill government coffers. So I put in a plea: rather than raising fares, now is the time to reduce them for a short period, to lure people back on to the railways and, as new travel and working patterns emerge, to encourage new leisure rail users?
Finally, freight. The combination of recentralisation, better co-ordination and the current lower passenger numbers provides a big opportunity for bold steps to improve and increase freight services. But that needs capital investment, too; will we get it?
I thank the noble Lord, Lord Rosser, and the noble Baroness, Lady Randerson, for their generally—I think—fairly positive welcome for these proposals. The noble Lord, Lord Rosser, had a long list of Great British XYZ, and perhaps I may say, as we come out of restrictions, I feel we have a Great British bounce back coming along. So, what are we going to do about our railways and Great British Railways, which will be one of the “Great Britishes” that will be so important to us as we go forward?
The noble Lord, Lord Rosser, seemed to be a little bit muted on the subject of the changes we have proposed. I do believe that we are proposing a once-in-a-generation change. It will be a massive transformation of the current way our railways operate, and it will lead to very significant improvements in service to passengers. But the noble Baroness, Lady Randerson, is absolutely right: it will not be easy. This is a national infrastructure with national services; it is hugely complicated now and will continue to be in the future. We know that. It will not be easy.
So the scale of transformation will have to be taken in bite-size pieces, and we will have to think about how the development of these phases will happen. Andrew Haines, who, as we all know, is the current chief executive of Network Rail and a well-respected industry leader, will be developing these interim arrangements for Great British Railways. It is important we do that. We could not have done it before because we had not announced the White Paper, and we will be establishing phases for the delivery of Great British Railways and all the phases that have to happen in between. We will be working collectively and collaboratively with the sector, and that is really important.
On the DfT side, I am well aware that there are an enormous number of very talented people in rail. We will continue to support Great British Railways as much as is needed in the short term. The DfT will establish the rail transformation programme, which will assist Andrew Haines and the wider sector as we make these changes.
The noble Lord, Lord Rosser, talked about how the blame for delays will not disappear. I agree. I asked exactly the same question about big birds and little birds, and whether you could be blamed for one and not the other. I am reassured that it will be vastly simplified and will not be as complicated and long-winded as it is now.
The noble Lord went on to mention the incentives regime. It is important that we have a really firm and accountable incentives regime, because we must lift the quality of services for the passenger. Therefore, we will incentivise high-quality, punctual services. We will ask operators to manage costs and to attract passengers. From a ministerial perspective, we will hold Great British Railways to account and it will hold the holders of the passenger service contracts to account via statutory powers and the ability to issue binding guidance—for example, on any of the elements the noble Lord mentioned.
We believe that there should continue to be private sector investment in rolling stock, but the noble Lord highlighted the slight tension that exists. We will ask Great British Railways to take a strategic approach to the overarching issue of rolling stock. It will look at supply chain sustainability, for example, and how to generate high-value jobs in the UK, but the TOCs will still be responsible for procuring value from the market and improving the passenger experience when the trains are running.
Devolution is a very important part of improving our transport system. I am speaking specifically about devolution to the local transport authorities. That would include the metro mayors. We are extremely keen to work with the metro mayors on devolution. The White Paper publication is a significant landmark as we start the process of these implementing reforms, but it is obvious that they cannot be devolved immediately. We will work together to think about how the structures with the metro mayors and the smaller local transport authorities will work and where they will be able to take a greater level of control of the services in their area.
Scotland and Wales are both extremely important in this regard. Both will exercise their existing powers and be accountable for them. The infrastructure is, of course, all owned by Great British Railways, with the exception of some of the valley lines in Wales, and we will work in partnership with Transport Scotland and Transport for Wales. We would expect a good relationship with them, because it is so important for the services to improve.
Great British Railways will have a five-year business plan, which will be drafted in the context of a 30-year strategy. It will set out the infrastructure funding settlement for that five years and the level of operational subsidy. This will give certainty and stability to the network as a whole.
The noble Baroness mentioned fare rises. I suspect that my Secretary of State would not rule them out, but we have to simplify the current mass of ticketing options and prices and the endless bits of paper that you have to carry around with you. We will look to introduce more pay-as-you-go, more contactless payment and more digital ticketing as soon as possible.
The noble Baroness mentioned some short-term incentives to get people back on to the trains. The Department for Transport has commissioned Network Rail to look at this. It has set up the rail revenue recovery group, which we will look to for advice on short-term and long-term interventions on fares. This links back into the recovery in demand, because we want people to come back to the trains and we hope that the number of passengers will grow further. Financial sustainability is linked to demand but not necessarily on a very firm basis, because it depends on how much passengers are paying.
Therefore, it is the case that we have to make sure that our railways are financially sustainable in the long term. On one side, we will look at how we can improve services to passengers, as well as at fares, and on the other side we have to look at how we will modernise the system with regard to some areas where there might be changes to the ways in which people work. We want to develop skills and perhaps use them more effectively within the system. That will be up to the industry, working with the unions, to develop the best and most highly-skilled workforce that we can for our industry.
I hope that I have been able to answer the questions asked by the noble Lord and the noble Baroness. I thank them genuinely for their positive engagement, and I am sure that there will be more questions to come. I look forward to comments and questions from all noble Lords, and I hope that they will consider joining me at the all-Peers briefing section with the Rail Minister on Wednesday.
(3 years, 3 months ago)
Lords ChamberTo ask Her Majesty’s Government when they plan to publish their transport decarbonisation strategy.
My Lords, we are working hard to finalise our bold and ambitious plan to decarbonise transport and expect to publish it shortly. We need to go further and faster to tackle emissions from the transport sector. The transport decarbonisation plan will set out a credible pathway to delivering transport’s contribution to carbon budgets and net zero by 2050.
I am glad that we will hear the details of the decarbonisation policy soon. Do the Government accept expert evidence given to the citizens’ Climate Assembly last year that to reach absolute zero by 2050 there has to be a two-pronged approach to road traffic: vehicle electrification and a reduction in car miles of between 2% and 4% a year? Previous government predictions have been for an increase in car miles. In the light of this new evidence, will the Minister reconsider the Government’s £27 billion road-building programme, which academics have recently criticised as being up to 100 times more carbon intensive than government predictions?
I reassure the noble Baroness that the £27 billion figure is not a road-building programme; it includes operating and maintenance of the strategic road network. She mentioned a two-pronged approach; this Government are taking a three-pronged approach, which we feel is better. The first area is technological improvements; for example, HGVs are very difficult to decarbonise, so we are going to spend £20 million on a zero-emission freight trial. The second area is regulation, where we are going to ban the sale of diesel vehicles from 2030. The third area is new behaviours—a modal shift. How do we get people on to public transport, cycling and walking?
(3 years, 3 months ago)
Lords ChamberMy noble friend is quite right. Indeed, the Rail Industry Association report in 2019 set out that one of the root causes of the challenges of electrification was the 20-year hiatus that had previously occurred in the electrification projects, which led to a loss of specialist knowledge. But we are looking at the supply side of this to bring forward the rolling programme of electrification; I specifically point my noble friend to the Traction Decarbonisation Network Strategy, which has a lot of information about the supply side. We are confident that, if we have the right programme in place, we can not only use the existing supply-side skills and expertise but grow them for the future.
Does the Minister agree that all the options in this report are better than diesel trains, which are just as bad as diesel cars for the environment and health? Can she therefore explain why the Government have fixed 2030 as the year to phase out all diesel cars while they are still promoting hybrid trains, which are of course simply diesel trains for large parts of their journey?
The noble Baroness will be well aware that decarbonisation of different modes has to happen at different speeds. For example, the reality on the railway network is that freight is a challenge, because it takes much higher levels of energy to pull freight cars along. Therefore, it is right that we look at each mode and try to decarbonise them as quickly as we can, and that is what we will set out in our transport decarbonisation plan.
(3 years, 3 months ago)
Lords ChamberTo ask Her Majesty’s Government what assessment they have made of the social and economic impacts of disruption to services following the withdrawal of some Hitachi high-speed trains being removed from service after defects were discovered in them.
My Lords, the vast majority of services across the national rail network are unaffected. The trains affected are Hitachi Class 800 series units operated by Great Western Railway on intercity services as well as some LNER services, Hull Trains services and a small number of TransPennine Express services. Most of the services used by schoolchildren and local workers are local services which have not been affected by this issue. The Government have asked operators to prioritise services used by schoolchildren where possible.
I thank the Minister for that Answer and I appreciate the amount of joint working that has taken place to enable some replacement services to run. The abrupt and total withdrawal of Hitachi trains from several routes caused massive disruption to passengers and businesses in some regions. It is an added blow to train operators, which had hoped to be attracting passengers back on to services. This is a crucial time as we establish fresh working patterns and the Government need to lure us back on to public transport. This appears to be an expensive design or manufacturing error.
Does the Minister agree that it is essential the cost is not borne by train operators, passengers or taxpayers? If so, are the Government in discussions with Hitachi about this issue? What steps do the Government intend to take to compensate the businesses and passengers affected? Does she agree that the Government need to fund a promotional period of reduced fares to attract passengers back on to the services, which have been so badly affected?
My Lords, the agreements in place to use the affected trains contain provisions that protect the taxpayer. We expect those who have contractual performance and train availability obligations to fully compensate the taxpayer.
(3 years, 4 months ago)
Lords ChamberI am afraid I have not read the report to which the noble Viscount refers. But it seems obvious that, over time, motors et cetera will become more efficient. It could be therefore that the amount of energy used will decline on a relative basis. The Government are also focused on flexibility. Flexibility is key, which is why we need smart technology that will centre on storage, demand-side responses and interconnectors to make sure we get the power to where it needs to be when it needs to be there.
My Lords, the number of electric vehicle charging points on motorways is already inadequate. To achieve the Government’s targets for increasing EV sales, there must be a massive expansion of the number of motorway charging points, but motorway services are often in rural areas where the electricity grid is already stretched. What work have the Government done so far to ensure that motorway service stations will have the electrical capacity that they will require, and what specifically do they plan to do in the next two years?