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Virgin Trains East Coast franchise to end 24 June 2018 and is temporarily re-nationalised
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ModernRailways
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I used to travel with East Coast around twice per week (return journeys). I would often travel in First Class booking around a month in advance. The tickets would usually set me back around £80-120 (2 advance singles, one outward, and the other inbound). Now, that same journey would cost double and usually that's in Standard Class too. I often caught the same train and there was a guy who worked in the Commons who would often be on the same train, he was able to claim expenses for an open single ticket, he opted to go for a first class advance which was cheaper and he'd be claiming less. He got food and drink on board the train and it was all perfect for him. I got the same train last year, and he was still travelling it, I said hello and asked why he was slumming it in Standard now. His simple response was the cost for first is ridiculous now and he could no longer guarantee getting a decent meal, plus that he was no longer getting free journeys every now and again.
Rewards going away, and overall pricing has gotten too high. I travelled to Edinburgh a few weeks ago as a last minute thing, and the pricing has went up but not too significantly. That to me is saying that maybe VTEC have realised they've pretty much got a monopoly on getting into London from the East Coast and say raising the prices to match. Between Newcastle and Edinburgh you also have Cross Country so there is quite a lot of capacity there, Newcastle to London you have VTEC or Grand Central (from Sunderland).
You'd probably be best asking this sort of thing in the careers sub forum. I'd imagine little would change though for you. They'll still need staff and recruitment will stay relatively similar throughout with the same staff likely dealing with it. It may be worth firing over an email to the HR department to query it though.
Rewards going away, and overall pricing has gotten too high. I travelled to Edinburgh a few weeks ago as a last minute thing, and the pricing has went up but not too significantly. That to me is saying that maybe VTEC have realised they've pretty much got a monopoly on getting into London from the East Coast and say raising the prices to match. Between Newcastle and Edinburgh you also have Cross Country so there is quite a lot of capacity there, Newcastle to London you have VTEC or Grand Central (from Sunderland).
You'd probably be best asking this sort of thing in the careers sub forum. I'd imagine little would change though for you. They'll still need staff and recruitment will stay relatively similar throughout with the same staff likely dealing with it. It may be worth firing over an email to the HR department to query it though.
LNW-GW Joint
Veteran Member
While that is true on Day 1 of DfT taking over, I don't think you can be definite about the expansion of EC services that the VTEC franchise promised.
The business case which funded the extra services has been shown to be undeliverable, at least in the short term.
I'd expect the DfT to review the expansion plans pretty quickly, even if it is a management contract.
But the IEPs will be delivered and operated, because the supply contracts are in place.
VTEC's failure to deliver future premiums to DfT also has an impact on investment in other franchises, as the funds won't be there.
WatcherZero
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They were front and back loaded with more modest premium growth in the middle, every year after the first year they paid more in premiums than East Coast returned to the government, they are in this year alone paying 30% higher monthly premiums than in the last year of East Coast and it would haven risen considerably further in the last two years touching twice the premium East Coast was returning to government in real terms.
Picking up on this from earlier: how unique is this 10% figure to the ECML franchise? Are there any other franchises with a similarly low season ticket percentage? Or is the ECML a big outlier on this?
61653 HTAFC
Veteran Member
That video from the Stagecoach bloke... Wow!
Reminds me of that Iraqi Minister of Information guy, who was nicknamed "Comical Ali" by the Western media after he appeared on state TV declaring that there were "No American troops in Iraq" as American tanks rolled over the horizon in the background!
Reminds me of that Iraqi Minister of Information guy, who was nicknamed "Comical Ali" by the Western media after he appeared on state TV declaring that there were "No American troops in Iraq" as American tanks rolled over the horizon in the background!
It isn't the franchise system that is broken. It is the government's handling of it, in its constant delays and poor judgement. Rrmember that in the first franchising round in the 1990s tne Franchising Director (at arms length from government) successfully let 25 franchises in two years. The DfT take that long over a single franchise.
centraltrains
Member
If these franchises are oh so profitable, why don't the government just run them and use the profits to start trying to paying back that massive debt we seem to have.......
Why is the end date so unspecific over than "few months"? Surely they can't be allowed to be that vague?! What stops Stagecoach/Virgin just stopping and giving up?!
Why is the end date so unspecific over than "few months"? Surely they can't be allowed to be that vague?! What stops Stagecoach/Virgin just stopping and giving up?!
Tetchytyke
Veteran Member
I'd hesitate to describe it as successful. Connex were a disaster. MTL went bust. North Western Trains were on the verge of going bust. Silverlink were a disaster. Central Trains couldn't cope with the size of their franchise. South West Trains sacked all their drivers then couldn't work out why they bad no staff to drive trains.
Franchising has been a potted history of incompetence and failure. The only successful franchise I can think of is Chiltern, to be honest.
LNW-GW Joint
Veteran Member
The government wants to mop up all the bond money before letting Stagecoach off the hook (£200m or whatever).
The cost of running the franchise will then fall on DfT, which is bad news for the industry (lower premiums to recycle).
On top of that they are clearly not ready to walk in with a new management team.
They will have to take over all VTEC's contracts and staff.
Agent_Squash
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SWT certainly did figure out why they had no one driving trains, and hired them back. You're taking incidents in isolation and making them seem like the whole franchise - SWT was hardly suffering driver shortage last year was it?
Tetchytyke
Veteran Member
Which contractual obligations have they failed to deliver as of today? I'm genuinely curious. Name them and I'll change my opinion.
Tetchytyke
Veteran Member
Eventually. But I'm challenging the assertion that the original franchises were all let successfully and without hitch. Because they weren't. Other than Chiltern and the first GNER, they were all let with varying degrees of incompetence and failure.
If incompetence and failure has persisted in the scheme for 25 years, I'd say the scheme IS broken.
The failure to meet target over delays, infrastructure failurs of signalling and wires in 2016 and and 2017 were appealing. Reputational damage and the consequential loss of discretionary tral.
he didn't say successful franchises he said they were all let successfully within 2 years - 2 vastly different things but I think you know that but are carrying on your tirade regardless
Tetchytyke
Veteran Member
Issues with electrification in Bolton affect VTEC...how exactly?
Which ECML projects haven't been delivered to date? Go on, name one. It should be easy if it's so obvious.
I'll just add that the NAO think otherwise.
LNW-GW Joint
Veteran Member
NR was not party to the VTEC franchise agreement, and in the event couldn't offer the number of paths that VTEC had been promised to boost revenue.
(This was before NR came under direct DfT control).
The Hendy review then cut back NR expenditure and either deferred or cancelled CP5/6 upgrades which would have delivered more paths (power upgrade etc).
NR might have put its CP6 plans up to the DfT (3-tracking, flyover at Peterborough etc) but they are not agreed/funded yet and will anyway be late.
Any replacement operator will face the same issues, so revenue/premiums will be hit.
Nigel Harris has an editorial piece on this in the current issue of Rail.
Which NAO report are you referring to?
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BRX
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I'm constantly seeing conflicting figures given for the amount of premium VTEC vs EC were paying. Is there anywhere where all this is clearly set out, as well as the amount of capital invested by VTEC, and so on?
The continual wire failures around Retford in 2016 etc. Even Yesterday the major signalling issues between Edin and Berwick, there really have been continual and significant failues to delivery the required level of reliability. The growth to deliver to 30% increase in payments had to come from a higher yield using the existing assets. Yes they bid too high but they have been let down by NR.
Yes, they are paying this 30% more at an unaffordable cost however.
East Coast managed not to go bust, and with a "better" soft product, and lower fares that passengers like.
Tetchytyke
Veteran Member
The reasons for their investigation are because of this. It'll be interesting to see what their final report looks like.
I'll ask again: which promised improvements have Network Rail failed to deliver, as of today?
VTEC are, of course, compensated for infrastructure failures. But the biggest issues recently have been caused by the failure of VTEC equipment (I'm sure they're not scrimping on maintenance for the old trains, just as I'm sure their sister didn't in the late 90s on the WCML and XC).
That's pretty much what I thought.
Some of the "promised upgrades" were cut a long time ago from CP5, others were never in CP5, and whether they will happen at all depends on the funding agreement for CP6.
How any of this is a failing of Network Rail is quite beyond me.
Still, a company that can't answer back are a convenient whipping boy for Messrs Grayling and Griffiths. "It wasn't me Guv". But of course.
I heard this but have also not seen any fact relating to this.
Sounds like a journalistic spin. Yet there is merit to not accepting an extension so they can get on with putting plans in place for a longer franchise. Not many (any?) train companies have done this in the past but an extension isn't compulsory.
EC Rewards:
Not too sure why people labour on this.
It was a free rewards system. I got annoyed when O2 changed the way their Priority Moments app works, so you can't use the code more than once. But I didn't set up a Twitter feed or continue to moan about not being able to get something for free.
No company has to reward anyone. Most places I shop don't do rewards of any kind. Asda certainly don't!
Stagecoach for Future Franchises?
It seems they're on their way out one way or another. The rise and fall of National Express was a surprise to many. But after seeing a bigger experience of them on the East Mids route, my conclusion is Stagecoach are simply caretakers who don't want to innovate. Makes me think they see the MML route as nothing more than a metro route rather than an inportant Intercity operation.
I'm surprised by the news of East Coast, as I always thought they'd strip West Coast from Virgin in favour of them running [the East Coast].
But if you're continually suing the government in one way or another, under a united brand of "Virgin", then sooner or later the government wil just get sick of your business and find ways to get you out. I understand if the government is doing things wrong mind, and I guess can't really comment as I don't know the facts, warts and all.
Tetchytyke
Veteran Member
If a franchise isn't successful, has it been let successfully?
Quite and as part of their franchise agreement th
No that's not what he was inferring and you know it.
his specific words were they 'let 25 franchises successfully in 2 years and the dft hasn't managed one'.
If I am going to have to spell it all out for you in black on blue writing then youll certainly have dropped in my estimation of you.
Tetchytyke
Veteran Member
Indeed they don't. However frequent traveller schemes, set up to reward regular customers, are well known to encourage repeat custom. Airlines, never companies to give something away for free, understand this with their frequent flyer schemes.
It's a commercial decision whether you do a frequent traveller scheme or not. But don't act surprised if your frequent travellers decide to be a bit less frequent if there's nothing in it for them.
Not even GNER, widely regarded as a highly well run early franchise?
Look at it a different way. Connex were successfully managed out of the market without disruption. North Western Trains were quietly taken over without disruption. Examples such as South West Trains reflected operational issues that, yes the franchisee needed to learn from, but the point is it did, and it turned into a highly regarded franchise.
It all got managed as processes rather well, with much less disruption and more speed than you see from the DfTtoday.
Bletchleyite
Veteran Member
It's no great surprise that GNER were well regarded when they basically did nothing but continue as-was with a bit of blue paint? There was not even an interior refresh.
Asda DO reward customers - their prices are lower that their competitors, rather than a cashback type reward scheme that Tesco run.
S/V on the other hand scrapped the EC Rewards, replaced it with in my humble opinion worthless Nectar points, AND jacked up the prices. And they wonder why it went to pot?
Err, Project Mallard?
I'm still unclear how any such delays by NR can be claimed to be at the root of VTEC's problems. Yes, additional paths would have grown the market a bit, but there would also have been some displacement of existing passengers onto these new journeys, so that these would not be additional income. Any revenue growth would be likely to be over multiple years and not explain why the franchise is in such dire straits now.
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