First win Intercity West Coast franchise

[tbtc]

Spurned spouse! Clutching at straws!!
It is simply business and a lot of money at stake!!
Hopefully improvements will be made to future bidding for running a TOC.
Stupid parameters in place.
Choice should be who has the best operating plan, and provide the best service for the public.
Second a sound deal for the taxpayer.
Having improved rail services can benefit communities immensely - far more than the DfT rake off!

Its desperation. How do they plan to run the franchise for a few months with so many staff on fixed term contracts that expire shortly? What happens to the plans for ordering new stock?

The rules are quite simple. If you provide at least all of the services stipulated by the DfT and provide a bid that is "deliverable" then the highest bidder wins.

You can promise more services (as First have, to Bolton, Shrewsbury etc), you can promise to maintain things that aren't in the DfT's guidelines (like Wrexham), but as long as your bid is "deliverable" then it comes down to the money.

To be fair, at least the financial aspect is a fair way of comparing two bids. Otherwise how do you decide between running services to Stirling (as Virgin planned to) or running them to Bolton (as First plan to)? There's no way you can compared oranges to apples.

The premium that First are offering is peanuts compared to all of the investment that the Government are planning for CP5 and the ongoing cost of propping up loss making routes like the Heart Of Wales line though.

 

[Mojo]

Interesting Facebook status from London Midland this morning...

London Midland better than Virgin - it's official...

I'm sure many of you will have heard all about the fight by Virgin Trains to overturn the Government decision to award their franchise to FirstGroup from December, and the concerns over a drop in customer service. Whilst this won't affect our services on the Euston line, we're delighted to tell you that the latest stats from the Office of Rail Regulation show our performance and customer service backup has once again surpassed that of Virgin, so you're in good hands. Things still go wrong and there are lots of improvements to make, but we're heading in the right direction.

 

[Masboroughlad]

What implications does the new franchise have on Alliance Rail's Open Access plans? Does it open the door again or close it completely?

 

[jon0844]

I loved the fact Virgin didn't mention the support from celebs to get signatures. If you got enough people in the limelight to ask people to do something they likely will. What does it prove?

People will get bored and move on. Are we still saying anything about Kony? Are we even still being outraged about what happened to Pussy Riot? Live moves on and people have short term memories.

Let Virgin get people on to the streets to protest. See how many turn up (if they're not given some forms of inducement).

 

[Pen Mill]

Interesting Facebook status from London Midland this morning...

Why not !

If one group's capitalising then why not another . Well done LM ! a nice timely kick in the shins for the bearded wonder.. love it !

 

[tbtc]

Interesting Facebook status from London Midland this morning...

But if Virgin's bad performances are because of WCML infrastructure problems south of Milton Keynes then how come London Midland are able to... oh, wait, it's another smokescreen...

 

[ainsworth74]

What implications does the new franchise have on Alliance Rail's Open Access plans? Does it open the door again or close it completely?

Well their Blackpool plans are, I would imagine, stone cold dead at this point. As for their other fantasy schemes of running down the WCML from places like Leeds I'd imagine their also fairly unlikely at this point (not that those have ever really been likely).

 

[davido39]

Wow 111 pages on this thread and counting, just shows the various opinions we have here. Wonder if we'll be here in 14 years time again when the bidding starts for another operator.
You never know we could be discussing the governments take over after First had to give the Franchise, or we could be discussing how First pulled it off and be lamenting the demise of the franchisee and the new franchisee Lever Brothers (joke) could really clean up the franchise (pun intended) by bringing everything in house. Who knows what could happen 14 years is nearly a quarter of a century and a lot can between now and then!

On another note I can see a Police helicopter out my window and its going backwards! :-0

 

[Whistler40145]

Who knows where things will be in 14 years time?

 

[michael769]

Well this plumbs a new depth, even for Branson

http://www.bbc.co.uk/news/business-19386005

Free of what precisely?

 

[E16 Cyclist]

Or it could be that people are worried that First have overbid and the service will deteriorate or some fares will be hiked to meet premium targets. Not helped by the general perception in polls, comments and interviews as well as railway industry surveys that First isn't as good as Virgin. And because their brand is weaker (and frankly less well known) this may limit their ability to attract customers and pay premiums.

All this was really well illustrated with National Express. People perceived the brand to be less worthy than GNER, they overbid, service deteriorated, which made the problem worse, margins crumbled and that franchise failed.

The problem is these deals have been done in secret, the process is not transparent, and the government of the day may be pushing an agenda that may make things worse for railway customers. Such as extracting the maximum amount of premium to cut overall railway subsidy because they are under pressure from lobby groups, people with political ideology, or factions within the government.

I think First are a lot smarter than national express on that score they seem to have some very capable people leading their business whereas national express kept chopping and changing, whilst some people are calling their growth targets ambitious they probably would be if the plan is to either hope more people start using the service or hike the prices up as much as they can each year and cut back the onboard service.

But there is plenty of room there for innovation to encourage growth, for example for most of the day the majority of first class carriages are only carrying around fresh air but i'm sure theres plenty of people out there myself included who would happily pay a £10 or £15 premium to sit in a first class seat with free wifi but without the rest of the first class product a sort of weekend first if you will. If you could do that with one or two carriages on each off peak train and then offer more advance fares in standard class straight away your increasing your revenue and in turn increasing your growth.

The proposed 15% reduction in anytime fares could actually increase revenue by persuading people to upgrade from using for example off peak tickets because the cost of anytime tickets are been far too high. Other revenue streams such as seat back tv's as on fgw or the travelling chef product could also increase revenue and ultilise excisting staff.

I'm also led to believe there is excess capacity on the WCML following the upgrade which they intend to use offering these new services which again could see more people using the service.

I think history has shown that the national express model of bidding high and cost cutting didn't work and i'd hope first have learnt from that and their growth forecasts come from plans to encourage rather than discourage growth

 

[F Great Eastern]

Apparently Branson will donate any profit to charities if they are allowed to keep running for an interim period. No doubt someone will soon trot out some lines about charity losing out on money if the DFT will not take up such offer.

For me, a charity donation subject to certain conditions, is not a charity donation, it's something else....

 

[jon0844]

Didn't Branson claim to want to run the lottery for free/no profit? And people went mad when he didn't win (he's been a master of PR for some time) even though it wasn't actually as good a bid.

Clever spin though. Now charities are indeed losing out if Cameron doesn't step in and let Virgin carry on. No doubt a load of kittens will be drowned now too. And won't anyone please think of the children?

 

[SprinterMan]

Apparently Branson will donate any profit to charities if they are allowed to keep running for an interim period. No doubt someone will soon trot out some lines about charity losing out on money if the DFT will not take up such offer.

For me, a charity donation subject to certain conditions, is not a charity donation, it's something else....

It's both bribery and a guilt-trip. I have gone from liking Virgin Trains a few weeks ago, to thinking they were classless and childish a few days ago, to full-on HATING them now. I am boycotting them from now on, and will never use another Virgin train again. When I go back to Bangor from Sudbury in September, I am going FGW from Paddington to Newport then getting the WAG Express from there.


I mean really:

http://railwayherald.com/uknews/virgin_offers_to_run_wcml_service_for_free

In the latest bid to get the Government to re-examine the decision on the West Coast franchise, Sir Richard Branson has offered a ‘no-cost’ option to provide time for such a review to take place.

There has been much debate and comment in the media and the city about the viability and deliverability of First Group’s bid for franchise, but the views of the traveling public are perhaps best noted by the response to an ePetition (click here), which needed 100,000 signatures in order to be eligible to be debated in the House of Commons. To date, that petition stands at 126,099, with several high-profile names publically supporting the move including Stephen Fry, who wrote on twitter “Something dodgy about Virgin losing their franchise?” before providing a link to the petition!

Writing in the Sunday Telegraph, Sir Richard said “the e-petition was a fantastic example of British people voicing their frustration at Whitehall diktat”, adding that “the contract for West Coast is due to be signed on Tuesday but we are asking for that to be delayed so that the issue can be debated properly.” Backing up this request, Sir Branson continued “If this process means extending the current franchise beyond December for a few months, I and my partners at Stagecoach would happily run the extended franchise on a not-for-profit basis, or donate profits to charity.”

But Virgin are not the only one’s looking to review the DfTs choice of franchisee, Louise Ellman, chair of the cross-party transport committee of MPs, is reported to have written to the Transport Secretary, Justine Greening, asking her to postpone sign-off on the contract to allow concerns over deliverability and the effect on services, among other things, to be properly reviewed.

This is just sick now.

Adam

 

[Retorus]

This is all very childish and pathetic from Virgin, the legions of sheep signing that petition will ensure that it gets discussed though. Tedious.

 

[Whistler40145]

This now getting worse & in bad taste.

 

[RPI]

I hardly think introducing Pacer units to The West Country had the people cheering First,

Not true, the fact that 4 car pacers came to replace/supplement 2 car and 1 car Sprinters on most diagrams actually took the sting out of their use, people whinged about how crap the seats were-but a crap seat is better than no seat.

 

[jon0844]

So a Government isn't allowed to carry out a tendering process in the correct and legal manner if the public doesn't like the outcome? Opinion based on the voice of a high profile business leader working for a losing team?

Why not choose the company wanting to run the ECML by getting ITV to produce a TV show, hosted by Ant and Dec and produced by Simon Cowell. Let's ignore logistics and that rubbish and concentrate on things like staff uniforms and theme tunes for advertising campaigns.

 

[E16 Cyclist]

So a Government isn't allowed to carry out a tendering process in the correct and legal manner if the public doesn't like the outcome? Opinion based on the voice of a high profile business leader working for a losing team?

Why not choose the company wanting to run the ECML by getting ITV to produce a TV show, hosted by Ant and Dec and produced by Simon Cowell. Let's ignore logistics and that rubbish and concentrate on things like staff uniforms and theme tunes for advertising campaigns.

I'd watch that lol

 

[Gareth Marston]

The original plan at privitsation was that the private sector was assumed to be so vastly more efficient than BR that it would not need so much Govt money. They would make super profit that could be taxed to provide subsidy to the bits that were "loss making" but Govt wouldn't dare try and close for fear of political backlash. Future Govt involvement was hoped to be merely facilitating this transfer of money.InterCity was profitable under BR in the late 80's it was this sector that the bulk of the premium payments would come from.

Current policy is to reduce Govt support though theirs no publicly available figure as to what Govt really wants to bring it down to. The First deal is consistent with the original privatization expectations and current policy. Look at what First have promised to pay in the latter years and then multiply that across ECML , Greater Western and the other IC franchises that will be re let in the next few years and you see where were Govt is trying to go.

The real debate is not First v Virgin but whether UK Plc should be using public money to support its railway or not.

Apologies if someone else has made this point but with 111 pages to go through...

Meanwhile the best railway system in the world knows its Govt will support a third of its costs and runs in a far more efficient vertically integrated entity and 40% of the country's population has an annual rail/bus pass that costs around £2000.

 

[fgwrich]

So a Government isn't allowed to carry out a tendering process in the correct and legal manner if the public doesn't like the outcome? Opinion based on the voice of a high profile business leader working for a losing team?

Why not choose the company wanting to run the ECML by getting ITV to produce a TV show, hosted by Ant and Dec and produced by Simon Cowell. Let's ignore logistics and that rubbish and concentrate on things like staff uniforms and theme tunes for advertising campaigns.

Carefull, cowell might hear you! he seems to hear enough...unfortunatly! :roll:

You know, i didn't get another Apprenticeship that i really could have done with last Wednesday. That’s now number 5 down, yet you don't see me immediately running to twitter, facebook and the government’s e petitions website... B*gger off Branson.

Incidentally, id love to know how Souter feels in all of this. As it's been stated, they never seemed the best of business partners - always the odd couple, and to have his Stagecoach brand being roped back into the Media with this Free Franchise idea?...

 

[WatcherZero]

Didn't Branson claim to want to run the lottery for free/no profit? And people went mad when he didn't win (he's been a master of PR for some time) even though it wasn't actually as good a bid.

Clever spin though. Now charities are indeed losing out if Cameron doesn't step in and let Virgin carry on. No doubt a load of kittens will be drowned now too. And won't anyone please think of the children?

Very similar situation, Virgin bid to operate the lottery as not for profit giving 100% of earning to the charities (£160m per year to charity as opposed to Camelots £50m per year) and Camelot offered to give about £1-2bn directly to the Government coffers as a franchise payment. Both bids had problems, Virgins bid had legal competition issues around operating as a not for profit company while Camelots bid had problems with the lottery terminals not being reliable and paying out when they shouldnt. The Government was about to award it to Virgin but then Camelot took out a Judicial review and had the decision overturned, they argued as they were paying the biggest premium to operate the lottery they should win and the judge agreed. Competition was rerun and Camelot pledged to buy out its shareholder Gtech (who made the dodgy lottery terminals) removing that obstacle and winning the second round 4-1.

 

[F Great Eastern]

So just in case I am confused here, Virgin, who claimed they could not give a penny more to the DFT as it would not be viable and would risk making the company have financial problems, are now offering to "donate" extra sums to charity if it will help them? Doesn't that kinda go against their whole argument?

In my view charity donations in connection with government contracts should not be permitted that is not just by Virgin, but by any company or industry. I give money to charity myself and my company does as well, but the difference is we donate money because we want to donate, not because of we are thinking what is in it for us.

 

[Oliver]

Is the farcical bidding process down to the current Government?

Why do you call it farcical?

The DfT issues a specification of the services it wants. Bidders are pre-qualified to remove no-hopers, and the remaining 4 or 5 put in their bid which meets the DfT spec and can also include extras. The DfT then selects the company it wishes to run the service. Seems to me basically a suitable way for the government to award a contract.

 

[Whistler40145]

What I call farcical is the embarrassing mess Virgin Trains have landed themselves in.

I also comment that no Charity could accept donations in this way due to Charity Commission rules. I know as I work for a Hospice which is a Charity.

 

[radamfi]

The similarity to the lottery bid has been mentioned on here, and is well known. But what some people may not realise is the similarity to the Virgin Radio campaign to get on FM in 1994. Virgin bid for, and was awarded, a licence to broadcast nationwide on AM. He knew full well that it was only on AM. Within a year, he set up a campaign to get Virgin on FM, courting public support, saying that they were doing what no one else would do etc. etc. He claimed it was similar to how Virgin Atlantic got their planes 'upgraded' from Gatwick to Heathrow, taking no account of the technical limitations that meant that it was unrealistic to expect any further national licences on FM. But he did get in compensation a licence to broadcast in London on FM.

Within a few years, he had got fed up of radio and sold the station. By that point, the station had changed out of all recognition and had effectively 'sold out' by becoming bland. Other companies continued to use the Virgin name until Absolute Radio decided it didn't want to pay for it.

So Branson has a long track record with this sort of behaviour.

 

[cambsy]

Virgin did a decent job with West Coast, got tilting trains running again, far better services than BR days, were at least ambitious, First refurbishment of HST is the worst, hate the high back seats and very few table seats, Catering poor, grumpy slow buffet hostess other Saturday, was on first class 7 day ALR, no host to bring coffee etc, really poor, think Virgin deserve to keep franchise and signed petition.

 

[bnm]

I also comment that no Charity could accept donations in this way due to Charity Commission rules. I know as I work for a Hospice which is a Charity.

What rules exactly? That's a sweeping statement that I can find no basis for in law.

 

[calc7]

It's both bribery and a guilt-trip. I have gone from liking Virgin Trains a few weeks ago, to thinking they were classless and childish a few days ago, to full-on HATING them now. I am boycotting them from now on, and will never use another Virgin train again.

With all due respect, I don't think a few passionate enthusiasts from a forum on cheapo student fares is really Virgin's concern here. Many are the same people who would rather see a Deltic + MkIIs crawling up the Trent Valley.

Whatever the facts are surrounding the physical operations (I don't buy any comparison with FGW's PPM as it's apples and oranges) and whether First could do better, Virgin's customer service is very good and goodwill forms a not-dismissible entry on the balance sheet. I reckon their brand adds value. Ok, yes, 98% of the people travelling on Friday, 7 Dec will travel again on Friday, 14 Dec. But Virgin really have built up a solid loyalty, particularly on the EBW and Manchester routes.

If just 1-2% of these customers decide not to travel due to (perceived) inferior customer service under First, or loss of loyalty, these 10% growth predictions may become hard to hit.

I'm just trying to counter all these "Virgin's brand counts for nothing" posts - to be honest, we should be glad that the public/media are actually getting passionate about who runs their trains for once (even if there is some misguidance)!

 

[jon0844]

People are allowed to be disappointed that Virgin didn't win. I was too but accepted they lost. Why can't Virgin and everyone else? When I heard what Virgin began to do, I felt ashamed as a former employee for a Virgin owned business.

Next time I go to the theatre for a matinee performance and like the show, I'll refuse to leave and demand to stay in to watch the evening show. If my seat is reserved for someone else, I'll just Tweet that it's unfair and I will probably buy more during the interval than the next person. In fact, I'll even say they can't even afford a programme. All I need is for a celeb or two to say I should be allowed to stay and to tell security to back off and stop being nasty jobsworths...