c2c sold by National Express to Trenitalia

[pemma]

From what I've read no train franchise is "lucrative" compared with bus operation.

It's easier to change bus operations to make them more lucrative. If it's a commercial service then the timetable can be changed or the route can be withdrawn by giving 8 weeks notice, while even a contracted service might have break clauses if passenger numbers are lower than expected. Plus for contracted services operators usually bid for each route individually so they don't bid for the routes they don't want.

In Cheshire East GHA Coaches had a lot of contracts which meant a lot of services went out to tender in the summer of last year when they collapsed. It was interesting to see that the contracts Arriva won had limited or no competition (they were the only bidder for the 130 Macclesfield to Manchester Su and BH service) but the ones where there were quite a few bids generally went to little operators e.g. the Congleton town services went to Hollinshead Coaches who only had coaches prior to winning the contract.

 

[AlterEgo]

This is rather a shock to everyone in the business, however I am surprised that Trenitalia wants to move into the UK rail market considering the low margins and crazy bids that have won the last few franchises.

Quite surprised to hear the news also.

c2c is a generally well managed operation - what's Trenitalia's record like? No idea.

 

[Alfie1014]

There will probably be a"consideration" for buying out c2c.
DB eventually had to cough up an LHCS set for buying Arriva.
But DfT will welcome a new competitor for upcoming franchises.
From an Italian perspective, FS is under considerable competitive pressure at home and is being readied for partial privatisation.
Trenitalia also took over Arriva's routes in Germany when DB bought them.
I just hope they don't inflict their domestic web site on us!

Traditionally there has been a change of control 'passenger dividend' we'll have to wait and see what transpires. Interesting move on behalf of FS, their ventures abroad have not always gone so well (Czech major stations being one) and aren't they in the running for operating the Greek Railways?

End of an era for NX who were at one point the largest operator of franchises, was it 8 in the late 1990s/early 2000s, ScR, MML, Central Trains, Wales and West, Valley Lines, GX, WAGN, c2c plus Maintrain?

 

[pemma]

I wouldn't use the term "Lucrative" more suicidal! Great example is Stagecoach were struggling from day one with East Coast and there are likely to be a few more TOC's struggling with poor growth at the moment.

Well Keolis never seem to want to bid alone for a local franchise but are happy to support Go-Ahead in their bids but they did try to get franchises like EC and TPE by themselves.
--- old post above --- --- new post below ---

and aren't they in the running for operating the Greek Railways?

Do they have a contractor for rail replacement taxis?

http://www.bbc.co.uk/news/magazine-18032721

 

[pdeaves]

what's Trenitalia's record like? No idea.

Not much on the top wallah here, but what it does say is interesting: https://en.wikipedia.org/wiki/Barbara_Morgante.

 

[Mollman]

From what I've read no train franchise is "lucrative" compared with bus operation.

Is that from one of the pro-bus franchising guff? There are many bus operators who are struggling to make a profit to just reinvest in newer vehicles let alone provide a shareholder dividend. They have been hit by cuts to supported services, cuts to concessionary reimbursement (this is not a subsidy as they are being forced to carry pass holders for free) and increased congestion especially where there is the 'bus lanes are bad' brigade.

Going back on topic, hopefully the white livery of C2C will be replaced by something more professional looking. It was a shame they got rid of the old blue livery which was very smart (but of course not corporate image!).

 

[A0wen]

Yet another foreign state railway operator with a UK franchise...

Whereas NX and First both run operations outside the UK, despite being British companies.

So what do you want, a one way street where only British companies can run UK rail franchises, but they can also run franchises outside the UK?

 

[61653 HTAFC]

Will the new company be allowed to run the c2c franchise until whenever the c2c franchise is due for renewal?

I don't see why not. Plenty of TOCs have changed ownership during a contract, right back to the early days of privatisation with First taking over the management buy-outs at NWT and GWT, and the Arriva rescue of Merseyrail and Northern Spirit when MTL got into difficulties.

 

[Mordac]

Have NX said anything about whether they're also wanting to get rid of the Midland Metro?

 

[AlterEgo]

Not much on the top wallah here, but what it does say is interesting: https://en.wikipedia.org/wiki/Barbara_Morgante.

Looks like someone set up that page just to slag her off - certainly doesn't meet Wikipedia standards.

"Since when she was nominated CEO of Trenitalia, Barbara Morgante has never improved the train service in the Abruzzo, Italy, as it was requested since many years from whom need the train service on daily basis in the Italian Abruzzo region to go to work or simply to reach their homes."

 

[Bletchleyite]

Is that from one of the pro-bus franchising guff?

No.

There are many bus operators who are struggling to make a profit to just reinvest in newer vehicles let alone provide a shareholder dividend. They have been hit by cuts to supported services, cuts to concessionary reimbursement (this is not a subsidy as they are being forced to carry pass holders for free) and increased congestion especially where there is the 'bus lanes are bad' brigade.

There are, but the big groups won't tend to be interested unless the profit margin exceeds about 10%. No TOC is that high.

 

[fredk]

Traditionally there has been a change of control 'passenger dividend' we'll have to wait and see what transpires. Interesting move on behalf of FS, their ventures abroad have not always gone so well (Czech major stations being one) and aren't they in the running for operating the Greek Railways?

End of an era for NX who were at one point the largest operator of franchises, was it 8 in the late 1990s/early 2000s, ScR, MML, Central Trains, Wales and West, Valley Lines, GX, WAGN, c2c plus Maintrain?

Don't forget Silverlink too.

 

[CosherB]

Yet another foreign state railway operator with a UK franchise...

zzzzzzzzzzzz ... :roll:

 

[richw]

Quite surprised to hear the news also.

c2c is a generally well managed operation - what's Trenitalia's record like? No idea.

As they are keeping the same management I'd expect it to continue to be well managed

 

[Simon11]

Have NX said anything about whether they're also wanting to get rid of the Midland Metro?

Well, they're keeping it but the contract is up for tender in the next year.

 

[LNW-GW Joint]

Don't forget Silverlink too.

And a share in Eurostar UK.
Oh, and NXEC/EA...

 

[physics34]

zzzzzzzzzzzz ... :roll:

its a valid argument.

 

[Expression357]

Well, they're keeping it but the contract is up for tender in the next year.

Noting that NXG are a bidder in the Manchester Metrolink concession - I don't think there is any desire to move out of light rail concessions.

 

[Simon11]

Noting that NXG are a bidder in the Manchester Metrolink concession - I don't think there is any desire to move out of light rail concessions.

Translate the following page and it will reveal who has won it.

http://www.lesechos.fr/industrie-se...ace-pour-le-tramway-de-manchester-2044237.php

However it should have been public news in mid December and hasn't been announced yet, so I wonder if anything has happened. Maybe Southern problems have put TfGM off??? Or some other bid problem??

 

[fredk]

zzzzzzzzzzzz ... :roll:

Please elaborate on why you think it is acceptable for foreign STATE OWNED "companies" to run rail franchises and generate profit from us passengers here in the UK to spend it on their own networks?

Abellio recently admitted that their UK operations required very little investment and generated a good amount of profit which they could invest on their home network.

It simply seems wrong to have these state owned companies playing in the supposedly free private market. These organisations have vested interests in their nature to provide for their own taxpayers first and foremost.

 

[Simon11]

Please elaborate on why you think it is acceptable for foreign STATE OWNED "companies" to run rail franchises and generate profit from us passengers here in the UK to spend it on their own networks?

Abellio recently admitted that their UK operations required very little investment and generated a good amount of profit which they could invest on their home network.

It simply seems wrong to have these state owned companies playing in the supposedly free private market. These organisations have vested interests in their nature to provide for their own taxpayers first and foremost - foreign work is simply a way for them to earn quick and dirty cash.

Have you considered that these foreign companies could also be subsiding our network if they make losses and some of these foreign companies are already failing or not making money on some rail contracts

 

[KTHV]

I look forward to the increase in standards on Italian Rail as a result of this deal going through.

Will be good to see the profits from British Fares in action when I pop down to Italy on holiday next year.

 

[Moonshot]

Please elaborate on why you think it is acceptable for foreign STATE OWNED "companies" to run rail franchises and generate profit from us passengers here in the UK to spend it on their own networks?

Abellio recently admitted that their UK operations required very little investment and generated a good amount of profit which they could invest on their home network.

It simply seems wrong to have these state owned companies playing in the supposedly free private market. These organisations have vested interests in their nature to provide for their own taxpayers first and foremost.

Nothing to stop the likes of National Express bidding for rail contracts in Germany. We will increasingly see European Networks open up to franchising as its now EU policy.

 

[strawbrick]

Please remember that when talking about "% profit" there is a vast difference between profit as a a) % of capital invested and b) % of turnover. I would suggest that for most franchises a is much higher than b.
I would also suggest that most franchises have a very positive cash flow so they do not have to borrow money to pay the bills, indeed in the case of annual season tickets and the like the incoming bills may be many months away ...

 

[Barn]

Please elaborate on why you think it is acceptable for foreign STATE OWNED "companies" to run rail franchises and generate profit from us passengers here in the UK to spend it on their own networks?

Abellio recently admitted that their UK operations required very little investment and generated a good amount of profit which they could invest on their home network.

It simply seems wrong to have these state owned companies playing in the supposedly free private market. These organisations have vested interests in their nature to provide for their own taxpayers first and foremost.

Why does it matter who ultimately owns companies if they have tendered the best offer to run the franchise?

 

[tbtc]

End of an era for NX who were at one point the largest operator of franchises, was it 8 in the late 1990s/early 2000s, ScR, MML, Central Trains, Wales and West, Valley Lines, GX, WAGN, c2c plus Maintrain?

And a share in Eurostar UK.
Oh, and NXEC/EA...

I'm going to miss the National Express days - they transformed a few franchises (e.g. Edinburgh Waverley - Glasgow Queen Street was half hourly when they took over, only hourly from Edinburgh to Dunfermline, only two trains an hour on the MML from St Pancras), introduced dozens of new DMUs, had some colourful liveries (I still like the orange/ purple/ green ScotRail livery, though I know it was garish!).

You could make an argument that they rescued the private railway by taking on the basket case of PRISM (Wales & West, Valley Lines, WAGN, C2C) - steadying the ship at a time when those TOCs seemed to be tanking (e.g. Valley Lines sending 150s to Northern Spirit because they wanted cheaper Pacers instead since they couldn't afford the Sprinters).

Some mistakes made, some questionable decisions (though I'd argue that anyone following GNER on the ECML faced a tough battle), but lots of good. Or is this just my nostalgia for the late '90s?

Please elaborate on why you think it is acceptable for foreign STATE OWNED "companies" to run rail franchises and generate profit from us passengers here in the UK to spend it on their own networks?

Abellio recently admitted that their UK operations required very little investment and generated a good amount of profit which they could invest on their home network.

It simply seems wrong to have these state owned companies playing in the supposedly free private market. These organisations have vested interests in their nature to provide for their own taxpayers first and foremost.

If we have a privatised railway then I don't really care who makes the 3% profit on my ticket price.

We enthusiasts all complained when a "bus company" won a franchise. Now we all complain when a "foreign government" win a franchise.

But, if we are to have a privatised railway then isn't it better to have an organisation with experience of running railways (rather than one with no experience)?

I get the whole "private v public" argument, but that's a different kettle of fish - if the railway is privatised with organisations bidding to run TOCs then who would be better to win some (than an organisation that already runs thousands of train journeys)? The RMT? G4S? Camelot? WH Smith? Innocent Smoothies? Seriously - who would you rather ran TOCs? (unless the argument is that we should have a fully nationalised railway, but that's a whole other argument)

 

[coppercapped]

Please remember that when talking about "% profit" there is a vast difference between profit as a a) % of capital invested and b) % of turnover. I would suggest that for most franchises a is much higher than b.
I would also suggest that most franchises have a very positive cash flow so they do not have to borrow money to pay the bills, indeed in the case of annual season tickets and the like the incoming bills may be many months away ...

I would point out that one of the bonds that any franchisee has to post is to cover the cost of season ticket fares paid to ensure that the subsequent operator is not out of pocket honouring the tickets. This bond is several tens of millions of pounds - it costs a lot of money to post it. Under accounting rules the season ticket payments are counted as debt - as they could be refunded - until the journey is made. Then the proportion due to that journey can be credited. As it's a season ticket this is difficult so I suspect that the calculations are made on a weekly or monthly basis.

 

[LNW-GW Joint]

Any UK company was able to buy c2c from NX.
They didn't bother, quite possibly because of the current hostility of the unions.
So they've got the Italians.

Many bus services are owned by Arriva, Abellio, Transdev etc, but nobody seems to care about that.
Rail is no different.
Ryanair is Irish, but huge numbers of Brits are quite happy to line Michael O'Leary's pocket.
It's a free market (even after Brexit).

Edit: FS announcement of their acquisistion: http://www.fsitaliane.it/fsi-en/Med...E-ACQUISITION-OF-ENGLISH-RAILWAY-COMPANY-NXET
Apparently c2c is "English".

The NXET acquisition – with a roughly euro 200 million turnover, 600 employees and a 74 Bombardier fleet – means a further achievement for the FS Group internationalisation strategy, one of the pillars of the 2017-2026 Industrial Plan
The high-quality services and operations run by NXET – 400 rides for over 42 million passengers/year who use the 26 stations served by the line (London – Shoesburyness) – confirmed by the top place in the British franchises’ punctuality rank, make an excellent fit with Trenitalia’s customer-centric approach

Looks like they put the Italian through a translator with rather odd results.

 

[bb21]

I would also suggest that most franchises have a very positive cash flow so they do not have to borrow money to pay the bills, indeed in the case of annual season tickets and the like the incoming bills may be many months away ...

It is a franchise requirement to have healthy cash flow and figures are reported to the DfT each period. If not, the TOC can very quickly get into trouble.

Season ticket income will have been included in the budgeting process, the planning of payment schedules and the negotiation with creditors regarding payment terms. It is most certainly not the case that "the incoming bills may be many months away". With a very small number of exceptions, cash flow must be managed carefully at all TOCs to prevent breaching the benchmark set by the DfT.

 

[fowler9]

I didn't know Virgin was "foreign"?
A Virgin consortium may well win WCP, but they'll have to fight for it.
Arriva is based in Sunderland, not Berlin.

Arriva is a subsidiary of Deutsche Bhan.