First win Intercity West Coast franchise

[HH]

Busmen? funny, I heard a nasty little rumour that First ran more TOC's in the UK than any other company, maybe I imagined it.

Moir Lockhead was a "busman" through and through. And would have been proud to admit it. He is no longer running the company, and even when he was, he largely left running the rail companies to rail people.

But you can't beat a good prejudice can you?

 

[RPI]

Moir Lockhead, like you say, left the rail side of the business to his "Railmen", and Sir Moir himself has even been quoted as saying that First was now a train company that just happened to run buses.

 

[Lewisham2221]

Why are First the only rail company who's bus operations are regularly brought up in rail discussions? I don't know if any of you have noticed, but Arriva, Stagecoach and NatEx all run buses too...

 

[WatcherZero]

You miss out one key element - the Franchise Premium. Profit is Revenue less costs less premium. Premium cannot change. All the other numbers can.

The trial starts BEFORE the commitment.

Give it up. I don't know what your beef is, but almost everything you post is factually incorrect.

Firstly how can there be a trial if the commitment already exists, a trial will evaluate the operational and revenue implications of a move and then a decision will be made, you dont do a trial after a making a final decision and the Government and First wont want a loss making service going ahead if passenger predictions fail to materialise.

Secondly the premium can change, the 15% profit share is a variable element of the franchise payments which will vary by market conditions and performance and means if First gets less revenue than predicted their franchise payments will be smaller. The same way there is also variation in payments by a cumulative 4% of GDP over the length of the franchise. If the economy is 4% lower in ten years than the Government predicted it would be First would be recieving revenue support, if its 4% larger than predicted First makes extra franchise payments.

These two functions are cut back cap and collar elements of the franchise, much less drastic than todays which on some franchises like Northern can be as high as 80% while on most is in the 30-40% range. But it remains to ensure that the Government shares in unexpected growth and the franchise is to some degree insulated from less impressive growth and not incentivised to just throw in the towel when if it enters choppy waters.

 

[snail]

Busmen? funny, I heard a nasty little rumour that First ran more TOC's in the UK than any other company, maybe I imagined it.

Funny that. I heard that Stagecoach were a bus company too. Don't want them running a TOC, do we?

 

[Whistler40145]

Would we think differently if Stagecoach had held the ICWC franchise with Virgin being the minority shareholder?

 

[tbtc]

No, he isn't.
I'm not anti-First, and if they've won, they've won.
But I do think losing the Virgin brand from the rail map is not good news, and not what even the DfT wanted.
It reduces diversity and just hastens the day when the busmen run everything.

I'd suggest that the "bus men" are running less now than they were a few years ago (given that Stagecoach, National Express, Arriva, MTL, Prism etc were all run by "bus" people plus half of Virgin).

Now we have "rail" people running a lot of franchises - they just happen to be "rail" people from the French/ Dutch/ German rail companies...

I don't get this snobbery about "bus men" - it's not like people complain about Virgin being a "record company" is it?

 

[transmanche]

it's not like people complain about Virgin being a "record company" is it?

Which might say a lot about SRB's skill at marketing and spin. The Beardy One hasn't owned Virgin Records for 20 years! (It was sold to EMI back in 1992, although there have been rumours that he might be interested in buying it back)

In fact many Virgin businesses have been sold (either completely or partially) over the years, with the Virgin brand being licensed. It's often only many years later when the business is subsequently sold on and the new owners don't want to pay the licence fees that the Virgin name is dropped; e.g. Virgin Radio, Virgin Megastores, etc.

 

[WatcherZero]

I'd suggest that the "bus men" are running less now than they were a few years ago (given that Stagecoach, National Express, Arriva, MTL, Prism etc were all run by "bus" people plus half of Virgin).

Now we have "rail" people running a lot of franchises - they just happen to be "rail" people from the French/ Dutch/ German rail companies...

I don't get this snobbery about "bus men" - it's not like people complain about Virgin being a "record company" is it?

Virgin hasnt been a record company since 1992 when it sold to EMI, though its recently started looking around for an aquisition to get back into the Industry.

 

[HH]

Firstly how can there be a trial if the commitment already exists, a trial will evaluate the operational and revenue implications of a move and then a decision will be made, you dont do a trial after a making a final decision and the Government and First wont want a loss making service going ahead if passenger predictions fail to materialise.

Easy, you trial to see how many services you run. As we don't know the exact nature of the commitment, however, all is speculation.

Note that VT was also going to run most of the same services as First, including Blackpool. Why not ask about their commitment?

Secondly the premium can change, the 15% profit share is a variable element of the franchise payments which will vary by market conditions and performance and means if First gets less revenue than predicted their franchise payments will be smaller.

This is wrong. There is no 15% Profit Share and the Premiums are fixed, save that they are indexed. Note also that the sharing is only one way. The DfT take no share of losses. I repeat, Franchise Premiums are Fixed.

As I said before the Profit Share mechanism is more complex than this, and each bidder was able to vary it. The maximum start point is 7.5% EBIT.

The same way there is also variation in payments by a cumulative 4% of GDP over the length of the franchise. If the economy is 4% lower in ten years than the Government predicted it would be First would be recieving revenue support, if its 4% larger than predicted First makes extra franchise payments.

Again this is not entirely correct. The mechanism is more complex. Revenue Support kicks in if the National GDP index in any year is approximately 4% lower than that which the DfT forecast. This is very approximate, as it is higher at the start of the franchise and lowers (as a %) as the index increases, being a fixed variation of 5 points, plus the calculations are raised to the power of 1.25.

These two functions are cut back cap and collar elements of the franchise, much less drastic than todays which on some franchises like Northern can be as high as 80% while on most is in the 30-40% range. But it remains to ensure that the Government shares in unexpected growth and the franchise is to some degree insulated from less impressive growth and not incentivised to just throw in the towel when if it enters choppy waters.

Again an over simplification. On today's there is an upside and downside on Revenue - Share or Support, plus a Profit Share. In the new there is only Revenue Support and Profit Share; there's no cap AND collar on Revenue. The Revenue Support is solely determined by National GDP, which is quite different to today's % of revenue calculation. It can still get to 80% though - in fact if it kicks in it goes straight to 80%, there's no 50% band.

Equally the Profit Share element is much larger in the new franchise, and would give DfT a much bigger share of the cake if any TOC started making large profits.

 

[junglejames]

They actually put in their 2000 East Coast bid to buy 60 TGV's for the East Coast and upgrade the line for 200mph running by 2009.

Without knowing whether it went in the official bid or not, the initial idea wasnt an upgrade of the ECML to 200mph. It was a brand new High Speed line covering part of the way up the ECML. Not sure how far it was going to run. So the southern section would have had 2 lines. The classic, and the High Speed.

 

[eastdyke]

Without knowing whether it went in the official bid or not, the initial idea wasnt an upgrade of the ECML to 200mph. It was a brand new High Speed line covering part of the way up the ECML. Not sure how far it was going to run. So the southern section would have had 2 lines. The classic, and the High Speed.

From contemporary press reports the new line was to go Peterborough-Newcastle, so yes Welwyn Viaduct etc was not relieved nor was Newcastle-Edinburgh. I have no idea whether the two ends would have served the existing connections or as to what provision was intended for the feeder routes and connections to Doncaster, Leeds & York etc.

Speaking as a non-Londoner, the beauty of our treasured National Rail system is its interconnectability. (And after all we are quite a small island, not a vast continent)

 

[Stats]

MPs will debate the West Coast franchise decision in Westminster Hall on Monday at 4.30pm. Don't get too excited. It will be an anti-climax.

 

[tbtc]

From contemporary press reports the new line was to go Peterborough-Newcastle, so yes Welwyn Viaduct etc was not relieved nor was Newcastle-Edinburgh. I have no idea whether the two ends would have served the existing connections or as to what provision was intended for the feeder routes and connections to Doncaster, Leeds & York etc

From memory there were three sections:

• South of Doncaster (I can't remember whether this was London - Doncaster or Peterborough - Doncaster)
• Durham avoider (using the Leamside line to get a faster alignment between Darlington and Newcastle)
• Morpeth avoider (a short stretch in Northumberland to get away from that slow curve)

The idea was that the "classic" ECML could then be used for services like London - Retford - Sheffield.

 

[6Gman]

MPs will debate the West Coast franchise decision in Westminster Hall on Monday at 4.30pm. Don't get too excited. It will be an anti-climax.

And so it should be!

The awarding of a contract should be an objective decision, not a party political wrangle.

 

[tbtc]

MPs will debate the West Coast franchise decision in Westminster Hall on Monday at 4.30pm. Don't get too excited. It will be an anti-climax.

It could be a bit embarassing when MP's show their "knowledge", like that Merseyside MP who was unhappy that First were going to spend any money on advertising...

 

[eastdyke]

From memory there were three sections:

• South of Doncaster (I can't remember whether this was London - Doncaster or Peterborough - Doncaster)
• Durham avoider (using the Leamside line to get a faster alignment between Darlington and Newcastle)
• Morpeth avoider (a short stretch in Northumberland to get away from that slow curve)

The idea was that the "classic" ECML could then be used for services like London - Retford - Sheffield.

Nope, that was not the reported 'Virgin' plan, I think those bits were/are something else.

BBC reported here:

http://www.google.co.uk/url?sa=t&rc...nYGAAQ&usg=AFQjCNEqRDuwzfje9O5CGCTVrn-0MFHKYg

 

[Stats]

Nope, that was not the reported 'Virgin' plan, I think those bits were/are something else.

BBC reported here:

http://www.google.co.uk/url?sa=t&rc...nYGAAQ&usg=AFQjCNEqRDuwzfje9O5CGCTVrn-0MFHKYg

Nope, tbtc is right. Virgin's bid was for a new 200mph line between Connington and Colton Junction, upgrading the Leamside Line for high speed operation and a new 14 mile line between Killingworth and Chevington, bypassing Morpeth.

 

[eastdyke]

Nope, tbtc is right. Virgin's bid was for a new 200mph line between Connington and Colton Junction, upgrading the Leamside Line for high speed operation and a new 14 mile line between Killingworth and Chevington, bypassing Morpeth.

I think that you are talking about the 'Railtrack' solution.

Virgin wanted a long run of 200mph track, no stops, this one says 'It would begin near Peterborough and join the existing line near York'.
The Guardian reported here:

http://www.guardian.co.uk/business/2001/jan/19/2

Some of Sir Richard's 'previous' is also mentioned in the article.

 

[Stats]

Not sure if this link will work

http://webcache.googleusercontent.c...dband&cd=18&hl=en&ct=clnk&gl=uk&client=opera#

As described by Rail
Virgin proposed a new section of High Speed Line. It would have run from Woodwalton, just south of Peterborough, and then to the west of the city (with a Parkway station), run north past Grantham, Newark and Retford (with a junction to connect to the Sheffield line) before crossing over the ECML near Bawtry. A station at Finningley (now Robin Hood) Airport would have been provided and then the line would have reconnected with the ECML just south of York, having thrown off a branch to Leeds via Micklefield and the eastern approach (the route GNER is now proposing for the ‘electric horseshoe’). From there, of course, the existing alignment is fast, wide and not as congested. Between Darlington and Newcastle, the congestion and poor line speed problems would have been resolved by electrifying and upgrading the Leamside Line and running express services that way, across the Tyne east of the city centre. A further short section of High Speed Line would be built north of Newcastle to bypass the notorious curve at Morpeth

Also Durham CC LTP 2001-2005
The Virgin Rail Group’s proposals provide for the
Leamside Line in County Durham to be upgraded
for high speed operation, bypassing Durham
station, and a new section of line constructed in
Northumberland bypassing Morpeth. In addition the
proposal suggests that a further section of new line
could bypass Newcastle to the east.

 

[eastdyke]

Not sure if this link will work

http://webcache.googleusercontent.c...dband&cd=18&hl=en&ct=clnk&gl=uk&client=opera#

Thanks for putting me right and thank you for the link, it did work. The date appears to be 2006 and from a far more substantive source than mine!

My Newspaper sources clearly headlined rather than detailed the proposal.

Are there any Rail specific or other Industry sources from 2000?

Cheers.

 

[F Great Eastern]

Step forward Bob Crow:
http://www.telegraph.co.uk/finance/...Coast-rail-franchise-faces-strike-threat.html

 

[ainsworth74]

Well that's really going to help things along isn't it :roll:

 

[tbtc]

RMT general secretary, Bob Crow, said: “The fiasco over the award of the West Coast franchise has left both staff and the travelling public without a clue as to who will be running this key transport artery in little more than 10 weeks' time.”
The union, which is finalising preparations for a strike ballot...

Amazing! Bob Crow's solution to all this uncertainty is, erm, to go on strike? Yup, that'll solve all the uncertainty at once - bound to.

Whether the economy is doing well or struggling, whatever the weather there'll be Tories claiming that the only solution is tax cut for big business and there'll be Bob Crow claiming that the only solution is another strike... it's the only song he knows.

“It is still not out of the question that there will be no one to run it if the Government don’t stop messing about

Well, yes, it is out of the question. That's what DOR are there for. The trains won't all stop running at the stroke of midnight!

 

[SprinterMan]

This looks promising:

http://www.firstgroup.com/corporate/latest_news/?id=008681

A FirstGroup spokesman said:

"We are pleased that the Secretary of State for Transport has confirmed that the Government intends to proceed with the award of the InterCity West Coast franchise to FirstGroup.

Our focus is to ensure a smooth transition with continuity for staff and passengers alike. With that in mind, we are getting on with preparations to start the new franchise on 9 December so that we can deliver the many benefits and improvements that are planned without delay or disruption."

--- old post above --- --- new post below ---

Step forward Bob Crow:
http://www.telegraph.co.uk/finance/...Coast-rail-franchise-faces-strike-threat.html

This is playing out like a really complicated film, and if the movies have taught us anything, this will end up with the RMT union vs a very uneasy First/Virgin alliance :P


Adam

 

[F Great Eastern]

Just a standard response to the comments made in the Transport Committee on Wednesday, don't read too much into it.

 

[Wath Yard]

But I thought staff wanted to remain employed by Virgin. So RMT are holding a ballot for a strike against an employer its members want to remain employees of, and the employer has done everything in its power to keep them as its employees, but the union wants them to be transferred to a state owned company.

Its like the start of Soap (You need to be over 40 to understand the reference).

 

[David]

Long post incoming

Step forward Bob Crow:
http://www.telegraph.co.uk/finance/...Coast-rail-franchise-faces-strike-threat.html

Just looking at the RMT rail news archive, what little time and respect I had for Bob Crow has now gone. Comrade Crow has nothing good to say about First, but strangely, is very quiet when it comes to talking about SRB and/or Virgin Rail ....

RAIL UNION RMT warned today that the profiteering chaos of rail franchising is about to descend into total anarchy as it was reported this morning that First Group – who only months ago pulled the plug on their Great Western franchise to dodge £800 million in payments to the UK taxpayer – are being touted as favourites to take over the West Coast route from Virgin.

First are rumoured to be talking about 20% “cost-cuts” confirming an RMT news alert earlier this month that 500 catering and train staff jobs are on the block with shops and catering axed from the trains to jam in more seats and fatten up profits.

First RMT press release about the ICWC franchise, dated 30th July.

RMT General Secretary Bob Crow said:

“The West Coast tendering has descended into a shambles with arm-twisting, empty promises and a poisonous cocktail of fare increases and job cuts contaminating the atmosphere. This is the chaos of privatisation in all its gory detail and reinforces RMT’s case that if the East Coast can be run in public ownership then the West Coast can as well.

If the rumours that First Group are now in pole position on the West Coast turn out to be true it will prove that there is no outrage that one of these greedy rail companies can perpetrate on the British people that will get them barred from the franchising casino.

“First pulled the pin on the Great Western route to dodge £800 million in payments back to the taxpayer and here they are just months later sitting pretty on the West Coast deal. If they pull this off it will turn the UK rail industry into a global laughing stock and the British taxpayer will be rightly outraged.

2nd press release spreading lies, this one dated 2nd August.

RMT General Secretary Bob Crow said:

“Whoever wins the West Coast route next week, and all the signs point to First Group, they should be left in no doubt that RMT will mount a massive industrial, political and public campaign to stop any attacks on our members jobs and the services that they provide to the travelling public.

“From the leaked figures it is clear that this franchise in being let on pure McNulty terms with a gold-plated, 12 year contract linked to massive cuts to jobs and passenger services and huge increases in fares as the winning bidder battles to extract every penny that they can in profit.

“RMT will work with MP’s and communities along the West Coast route to stop the savage assault on staffing levels and budgets that we expect to be at the core of this new franchise arrangement.

3rd press release, repeating the same lies, and this time threatening strike action, dated 10th August.

4th press release containing the same lies, but this time, promising industrial action, dated 15th August.

5th press release, this one demanding guarantees from First over jobs and conditions, also dated 15th August.

6th press release. this time demanding that the Virgin and First bids be fully disclosed, dated 4th September.

7th press release, this one promising strike action, dated 13th September.

In all those press releases, nothing bad is said about SRB. Is he paying off Comrade Crow and the RMT to sound off against First for him?

 

[eastdyke]

In all those press releases, nothing bad is said about SRB. Is he paying off Comrade Crow and the RMT to sound off against First for him?

The man has a fat salary and needs to be saying something.

Does what he says always need to make sense?

 

[mbonwick]

Well, yes, it is out of the question. That's what DOR are there for. The trains won't all stop running at the stroke of midnight!

Except DOR don't have a safety case - and you need named people in posts for that. Oh, and it has to go through the ORR.

Tony Miles on WNXX reckons they could just about get DOR ready to go for December if they started now (within the next week) and if all parties and bodies co-operate fully....like that will happen.

There really isn't enough time between the awarding of a franchise and the commencement - yet another flaw in the wonderful system:roll: