Virgin Trains East Coast franchise to end 24 June 2018 and is temporarily re-nationalised

[morgainelive]

Having done several journeys I am seriously unimpressed with the number of trains that are cancelled or delayed.

Today there are wire issues again at Wakefield and a cancelled train due to operational reasons I am now likely to miss my Blackburn connection.

The service is getting worse everyday there's something wrong with wires trains or train crew the east coast is one big mess .

I hope they bring it under government operation again. It's just bad all round.

 

[Agent_Squash]

Having done several journeys I am seriously unimpressed with the state if trains that are cancelled or delayed. Today it's wire issues again at Wakefield and a cancelled train due to operational reasons where I was told 1 minute before departure at Peterborough onto a packed train to Grantham then delayed again at Grantham I am now likely to miss my Blackburn connection as it once per hour #great the service is getting worse everyday there's something wrong with wires trains or train crew the east coast is one big mess I hope they bring it under government operation again it's just bad all round also better maintenance of the overheads too

Track maintenance is the role of Network Rail, not Virgin.

 

[morgainelive]

That I do know but information is so slow to cone through about cancellations at pboro or reasons why the poor staff at pboro who I just say are very good must have a hard time

 

[gsnedders]

Track maintenance is the role of Network Rail, not Virgin.

And that is already under Government operation therefore.

 

[RT4038]

Integration could still be there even if it meant having half a dozen companies running services up and down the ECML. Maybe using the Open Access model could be the way to go, whereby the entire timetable of both OAOs and TOCs are integrated into a single pre-defined timetable where potential TOCs and OAOs bid for the paths along the line with the more lucrative ones costing more.

Plus the services would be all shown in a single generic ECML timetable which would show all services no matter who runs them rather than just the current set up which shows the single East Coast services. OK, there is a risk that if a path isn’t bided for then HM Government would have to step in and run it themselves with whatever they can lay their hands on even if its some class 321 with an onboard trolley, its better than nothing.

Sounds like the sort of model that has served the de-regulated bus industry so well ...... with the 'stepping in' authority gradually reducing the amount of money available to 'step-in' (down to nil in some areas) and then blaming the operators for not operating a comprehensive service commercially. Doh!

This is quite apart from the Government wanting the maximum 'premium' from the East Coast line to subsidise the basket case Regional lines elsewhere.

 

[IanXC]

That I do know but information is so slow to cone through about cancellations at pboro or reasons why the poor staff at pboro who I just say are very good must have a hard time

I don't like to suggest you're contradicting yourself, but I do wonder how both can be true.

 

[Scotty]

I read it that the news about cancellations reaches the staff slowly...

 

[td97]

https://www.ft.com/content/9631d7a2-5790-11e8-bdb7-f6677d2e1ce8

UK East Coast rail franchise expected to be scrapped ‘in days’

Government to renationalise line or negotiate ‘not-for-profit’ deal with Stagecoach and Virgin

 

[tgrb]

East Coast descision within days according to the FT on Twitter

UK East Coast rail franchise expected to be scrapped ‘in days’

https://twitter.com/ftwestminster/status/996072472117170181?s=12

 

[Domh245]

Well I suppose 3 and a half is a "very small number of months" in government speak!

 

[FQTV]

Expect the DfT is waiting for a suitable day , when there are other items in the news to "cover it" ....

Probably when there's a certain wedding taking place in Windsor...

You don’t by any chance have Saturday night’s Lotto numbers to hand as well, do you?

 

[Roy Badami]

Sounds like DfT's preferred option is for VTEC to carry on running the franchise on a not-for-profit basis. I wonder how likely VTEC are to agree to that?

 

[jyte]

Trying not to be cynical here, would a % management fee count as non profit?

 

[SaveECRewards]

Sounds like DfT's preferred option is for VTEC to carry on running the franchise on a not-for-profit basis. I wonder how likely VTEC are to agree to that?

If they do run it on a not-for-profit basis I hope the government insist that they trim down the ridiculously top heavy management structure. A big complaint of VTEC (by staff) is VTEC have hired a lot of managers that just seem to be there to shield the people at the very top from actually doing much (and generally have very little railway experience).

Running 'not for profit' would still mean these managers still get paid for contributing very little. Stagecoach can still make money on a not-for-profit deal by continuing to hire sets from EMT and a preference for Stagecoach when running replacement buses. If they decide to keep the Virgin brand then Virgin will still receive payments for licensing the brand. If any external Stagecoach/Virgin companies are contracted to provide services to VTEC they'd continue to get paid unless their contract was terminated. In East Coast days, National Express Services Ltd had the contract to provide the call centre and customer relations to the EC franchise, so even when NX was stripped of their franchise they still made some money until the callcentre contract came to an end (once it came to an end that's why East Coast customer relations moved to Plymouth as NX wanted too much money to renew the contract). In the case of Virgin Group they have an agreement with Virgin Red (and Flying Club for those who choose miles rather than Nectar) so Virgin would also still continue to make money out of VTEC from these sources if they continued to operate under the Virgin brand.

So it's likely Stagecoach and Virgin would make some money out of a not for profit arrangement which is much better for them than losing money like they are now. It also runs the risk of the same managers that have caused the rock bottom morale to continue to be employed.

I don't know first hand the extent of the bloated management structure, just what I've heard from staff but I've heard from station staff at KGX that they increased the number of managers responsible for the station while reducing the front line staff and similar for on-board.

 

[HH]

It won't be not for profit; it might be on a management fee. I hope that DfT get some good advice, if so, as I would expect Stagecoach to pull a few fast ones, based on previous history.

 

[FQTV]

Sounds like DfT's preferred option is for VTEC to carry on running the franchise on a not-for-profit basis. I wonder how likely VTEC are to agree to that?

As far as I can see, the issues are that Stagecoach shareholders would have to agree to continue to tie up some capital and retain considerable liabilities (employment-related, mostly) for a marginal return.

Shareholders might support that if they perceive that it would be prudent to maintain company’s public reputation, or an opportunity to mitigate poor PR and repair a reputation commercially and corporately.

In this case, however, it’s not Stagecoach’s commercial reputation; it’s Virgin’s. The question (and perhaps the reason for the protracted nature of what seems to be going on) is why would or should Stagecoach shareholders continue to tie their funds and resources up to protect Virgin’s reputation.

On the other side of the table, there’s then presumably a political disinclination to release the current operator and return the franchise to Directly Operated Railways.

I can foresee the Public Accounts Committee and the Transport Select Committee contouring to have quite a lot of interest in the process and outcome of this.

 

[LNW-GW Joint]

As far as I can see, the issues are that Stagecoach shareholders would have to agree to continue to tie up some capital and retain considerable liabilities (employment-related, mostly) for a marginal return.
Shareholders might support that if they perceive that it would be prudent to maintain company’s public reputation, or an opportunity to mitigate poor PR and repair a reputation commercially and corporately.
In this case, however, it’s not Stagecoach’s commercial reputation; it’s Virgin’s. The question (and perhaps the reason for the protracted nature of what seems to be going on) is why would or should Stagecoach shareholders continue to tie their funds and resources up to protect Virgin’s reputation.
On the other side of the table, there’s then presumably a political disinclination to release the current operator and return the franchise to Directly Operated Railways.
I can foresee the Public Accounts Committee and the Transport Select Committee contouring to have quite a lot of interest in the process and outcome of this.

Other franchise bids are at stake.
If Stagecoach/Virgin pack in ICEC voluntarily (if they get the option), it won't say a lot for their commitment to WCP and EM.
They are half way through putting the WCP bid together (with SNCF), and are poised to start on EM.
Big stakes.

Grayling also has to work out if he will get more premiums out of an in-house team than if Stagecoach/Virgin stay in charge (while taking the risk on revenue).

 

[Failed Unit]

I hope we don’t end up paying for the Virgin brand. I know it happened on west coast. Branding doesn’t get bums on seats. Quality does.

 

[transmanche]

Grayling will do everything he can to avoid DOR running East Coast again, that would be just too embarrassing politically.

(Although perhaps far less embarrassing than some of the other shenanigans going on in government at the moment.)

 

[Bletchleyite]

I hope we don’t end up paying for the Virgin brand. I know it happened on west coast. Branding doesn’t get bums on seats. Quality does.

From what I can see the VTWC operation is markedly better than the VTEC one - the latter almost seems to be attempting to milk the money being paid for the brand to a ludicrous extent while actually basically being the same thing as EMT.

 

[SaveECRewards]

From what I can see the VTWC operation is markedly better than the VTEC one - the latter almost seems to be attempting to milk the money being paid for the brand to a ludicrous extent while actually basically being the same thing as EMT.

There's a rumour among VTEC staff (heard from a few different ones) that David Horne has been pencilled in to run VTWC. Not sure what's supposedly happening to their existing MD.

But that's one of many rumours floating round, I thought if he was going anywhere it'd be back to EMT as he was highly regarded there.

 

[Domh245]

I thought if he was going anywhere it'd be back to EMT as he was highly regarded there.

Why would they send someone who they view as doing well back to a franchise that could be ending soon

 

[SaveECRewards]

Why would they send someone who they view as doing well back to a franchise that could be ending soon

I forgot about that franchise nearing the end. But then that applies to VTWC as well. Even if Stagecoach aren't banned from bidding for franchises (there's pressure from some areas but Grayling said they'd not be blocked), there's a chance they might not win EM and WCP.

 

[SaveECRewards]

It seems if the operator of last resort does take over the franchise the limited company will be called "London North Eastern Railway" - that doesn't mean they'll trade as that. I seem to recall NXEA that originally traded as 'one' was called London Eastern Railway Ltd.

https://beta.companieshouse.gov.uk/company/04659712

Of course this doesn't mean that's happening, just the government preparing in case it did.

If you look at the name history:
DFT OLR1 LIMITED 16 Jul 2016 - 14 Feb 2018
GW RAILWAY LIMITED 18 Jun 2013 - 16 Jul 2016
STRUTTON RAIL LIMITED 07 Feb 2003 - 18 Jun 2013

Anyone know what was happening with the Great Western franchise in 2013 that might have made the government have the OLR ready for possible operation? But the fact the 'GW RAILWAY' is in the list of previous names proves that just because the government has changed the name of the company doesn't mean that it's definitely going to happen.

 

[mirodo]

Anyone know what was happening with the Great Western franchise in 2013 that might have made the government have the OLR ready for possible operation?

The termination of the bidding process for the new franchise, and extension given to Firstgroup:

FIRSTGROUP has won a 102-week contract extension of its Great Western franchise, as the Department for Transport continues with its bid to rescue the floundering franchise programme. The news has come exactly a year since FirstGroup's victory in the West Coast competition was reversed, following a challenge by Virgin.

As with c2c earlier this year, the agreement, running until 20 September 2015, has only been announced a few days before the existing Great Western franchise would have ended on 12 October.

https://www.railnews.co.uk/news/2013/10/03-first-celebrates-lastminute-great-western.html

 

[virgintrain1]

From Andrew Adonis

BRANSON BAILOUT: told Grayling may announce collapse of existing Branson East Coast rail franchise as early as tomorrow at 7am before markets open. Apparently there's an argument between DfT and No 10 on whether to bail out Branson with a so-called "not for profit" contract ...or to nationalise the East Coast line as I did in 2009, which was a success. No 10 rightly nervous about the politics and defensibility of a Branson bailout. For the public good, I hope @theresa_may makes the right decision.

 

[LOL The Irony]

From Andrew Adonis

Why does he get more and more annoying and why does it get more and more obvious that he's trying to spin an agenda. Also didn't he refuse to accept a lot of money from Nat Ex and government instead got ~15 million less from them?

 

[LNW-GW Joint]

He also knows it's not a "bailout", and that VTEC is not run by Branson.

 

[LOL The Irony]

He also knows it's not a "bailout", and that VTEC is not run by Branson.

Of course. Why do you think I said he's trying to spin an agenda.

 

[SaveECRewards]

Problem is all politicians seem to lack the ability to tell the truth. ‘Branson bailout’ I can accept from a politician as it’s the sort of nonsense Branson would say if the boot was on the other foot. As he was happy to take all the credit for VTEC when it’s going well then when it’s failing people are going to use it against him.

It’s one of the problems when you decide to licence a respected brand to companies you have no control over.

What annoys me about Adonis is he lies about East Coast. It was always the ‘New Labour’ policy that East Coast was only temporarily nationalised. If Gordon Brown had won in 2010 we may have had a private EC much sooner. We never know whether the operator chosen by Brown’s government would have been better than the one chosen by Cameron.

Of course as East Coast was being successful I would have hoped any government had left it alone so we didn’t get a third failure but neither the coalition or Labour at the time said they’d keep it nationalised.