Confirmation on class 379 to Great Northern???

[Sutton in Ant]

I would like to ask if anyone knows if GTR Great Northern has confirmed in getting Class 379's which recently came off lease from Greater Anglia?

 

[JonathanH]

I would like to ask if anyone knows if GTR Great Northern has confirmed in getting Class 379's which recently came off lease from Greater Anglia?

No. It isn't happening at the moment. There are lots of threads where this has been discussed including this one - https://www.railforums.co.uk/thread...rom-greater-anglia.226784/page-7#post-5521485

The main conclusion at the moment is that a transfer of 379s to GN was planned but called off. GTR are going to see how they get on without them.

 

[Metal_gee_man]

I'm sure Northern customers would love to see them on electrified routes, but of course because there is a chance they might be needed down south they'll be put into warm storage and never get to see any action north of their birthplace

 

[bramling]

I would like to ask if anyone knows if GTR Great Northern has confirmed in getting Class 379's which recently came off lease from Greater Anglia?

The answer is no, indeed it’s turning into yet another rolling stock farce.

Reading between the lines, GTR wanted (or were happy to take) them, but it has thus far not been possible to find terms (in other words cost) to which DFT is prepared to agree. GTR have now finalised a timetable and rolling stock strategy which is considered to meet demand and can be resourced using existing GTR units, plus a small transfer from SE later this year to allow the 313s to be withdrawn.

This seems to be the current position, though it could quite possibly change again at any time, especially if there’s an upsurge in demand.

Whether this is a strategy to see who blinks first, or DFT genuinely don’t want them, who knows…

 

[ashkeba]

I'm sure Northern customers would love to see them on electrified routes, but of course because there is a chance they might be needed down south they'll be put into warm storage and never get to see any action north of their birthplace

GTR Great Northern is a different company to Northern. GN serves commuters from Kings Cross and Morgate.

 

[Metal_gee_man]

GTR Great Northern is a different company to Northern. GN serves commuters from Kings Cross and Morgate.

I fully know that, I'm suggesting 319s running around Lancashire, Cheshire and Manchester should be replaced by these 379s

 

[bramling]

I fully know that, I'm suggesting 319s running around Lancashire, Cheshire and Manchester should be replaced by these 379s

They are already down to be replaced by 323s, are they not?

 

[Metal_gee_man]

They are already down to be replaced by 323s, are they not?

If they are that's fine, you get my point, sending them to Northern allowing them to use the capacity of the trains, maybe dare I say using their SDO capabilities running round as 8 car trains ultimately replacing older EMUs

 

[JonathanH]

If they are that's fine, you get my point, sending them to Northern allowing them to use the capacity of the trains, maybe dare I say using their SDO capabilities running round as 8 car trains ultimately replacing older EMUs

The reason the 379s are not being used is because the DfT doesn't want to pay the (expensive) leasing costs, not because there isn't somewhere suitable to use them.

If the DfT will not release the funding to use them on the Great Northern route, it similarly will not pay to use them on any Northern services (or indeed anywhere else).

There is effectively no viable business plan on any route which passes the test to use the 379s unless an unexpected surge in passenger demand materialises.

 

[bramling]

The reason the 379s are not being used is because the DfT doesn't want to pay the (expensive) leasing costs, not because there isn't somewhere suitable to use them.

If the DfT will not release the funding to use them on the Great Northern route, it similarly will not pay to use them on any Northern services (or indeed anywhere else).

There is effectively no viable business plan on any route which passes the test to use the 379s unless an unexpected surge in passenger demand materialises.

Where this could run into problems is if the units deteriorate during storage. Modern units don’t seem to respond too well to being stored, especially if not run regularly.

I suspect what will happen is both sides will blink at some point and they will go to GN on more favourable leasing terms. When that happens and how favourable the terms turn out to be will depend on to what extent peak demand recovers - both on GN, and elsewhere on GTR. It probably wouldn’t take too much recovery for Electrostars to become pretty thin on the ground, but equally DFT may well be prepared to tolerate some overcrowding.

 

[AM9]

Maybe the DfT is just reminding the ROSCo that high leasing charges aren't guaranteed throughout the life of rolling stock. A similar situation to the 350/2s. Once stored, their leasing value will progressively decline.

 

[bramling]

Maybe the DfT is just reminding the ROSCo that high leasing charges aren't guaranteed throughout the life of rolling stock. A similar situation to the 350/2s. Once stored, their leasing value will progressively decline.

No doubt this is, to some extent at least, what is going on here. Certainly the leasing companies are also playing their side of the game by having made it very clear that they *will* scrap unused rolling stock.

The whole thing is pretty unsatisfactory all round, but is of course a legacy of 1994.

 

[skyhigh]

If they are that's fine, you get my point, sending them to Northern allowing them to use the capacity of the trains, maybe dare I say using their SDO capabilities running round as 8 car trains ultimately replacing older EMUs

Northern really is not a good place to send them. 319s are already leaving, making the EMU fleet consist of just 323/331/333s.

There is absolutely no driver or fitter traction knowledge for Electrostars, so it would be a massive training cost (plus refurb costs, route clearance etc) for no real gain.

 

[Magdalia]

The whole thing is pretty unsatisfactory all round, but is of course a legacy of 1994.

One of the objectives of privatisation was transfer of risk from the public sector to the private sector. The risk of owning surplus rolling stock, but being unable to cover the financing costs, is now with the ROSCO not the taxpayer.

The reason the 379s are not being used is because the DfT doesn't want to pay the (expensive) leasing costs, not because there isn't somewhere suitable to use them.

If the DfT will not release the funding to use them on the Great Northern route, it similarly will not pay to use them on any Northern services (or indeed anywhere else).

There is effectively no viable business plan on any route which passes the test to use the 379s unless an unexpected surge in passenger demand materialises.

Or if the leasing costs are reduced to a point where class 379s become cheaper than other rolling stock.

DFT may well be prepared to tolerate some overcrowding.

That's what I expect to happen. HM Treasury have higher priorities for public expenditure.

I still expect the ROSCO to sell the class 379s, crystallising a loss at a point that suits them for tax purposes. That might be to another ROSCO, or it might be to that nice Mr Sims at Newport.

 

[JonathanH]

I still expect the ROSCO to sell the class 379s, crystallising a loss at a point that suits them for tax purposes. That might be to another ROSCO, or it might be to that nice Mr Sims at Newport.

It has been speculated elsewhere that the scrap value could well be sufficiently attractive enough to the ROSCO for that to be their destination.

Given there isn't any obvious reason the 350/2s will see a future lease either, it isn't by any means a certainty that the 379s will see further use.

(Note that this isn't the same as saying there is nowhere to use the units, just that there is a decision not to use the units.)

 

[HamworthyGoods]

The answer is no, indeed it’s turning into yet another rolling stock farce.

Is only having the units you need to meet the demand a farce? Traffic on the Tulse Hill corridor where the 455s mainly worked has fallen off a cliff edge and showing no signs of returning where as other London travel card zone routes have. The 5 car 377s planned for this route in May will still leave ample room for growth.

 

[bramling]

One of the objectives of privatisation was transfer of risk from the public sector to the private sector. The risk of owning surplus rolling stock, but being unable to cover the financing costs, is now with the ROSCO not the taxpayer.

The leasing companies won’t tolerate this situation going forward. Having been bitten on the proverbial now, this risk will simply be priced into new leases. It simply makes the DFT seem a dysfunctional customer.

I still expect the ROSCO to sell the class 379s, crystallising a loss at a point that suits them for tax purposes. That might be to another ROSCO, or it might be to that nice Mr Sims at Newport.

It would certainly be interesting to see if DFT are prepared to let the latter happen. The problem is that all of a sudden they could find themselves short of suitable stock, though DFT probably don’t care if that leads to overcrowding.

 

[Magdalia]

The leasing companies won’t tolerate this situation going forward. Having been bitten on the proverbial now, this risk will simply be priced into new leases. It simply makes the DFT seem a dysfunctional customer.



It would certainly be interesting to see if DFT are prepared to let the latter happen. The problem is that all of a sudden they could find themselves short of suitable stock, though DFT probably don’t care if that leads to overcrowding.

It is the leasing companies that have been dysfunctional because they underpriced the risk. Yes, they have been bitten on the proverbial, but it is not for taxpayers to bail them out. DfT still have the option of buying new stock, if the leasing companies overcompensate in prices of new leases, because they can borrow more cheaply.

I think neither DfT or HM Treasury are concerned about shortage of stock or overcrowding, what they are concerned about is cutting public subsidy to the railway.

 

[AM9]

It is the leasing companies that have been dysfunctional because they underpriced the risk. Yes, they have been bitten on the proverbial, but it is not for taxpayers to bail them out. DfT still have the option of buying new stock, if the leasing companies overcompensate in prices of new leases, because they can borrow more cheaply.

I think neither DfT or HM Treasury are concerned about shortage of stock or overcrowding, what they are concerned about is cutting public subsidy to the railway.

The whole setup of a pseudo privatisation is the problem, so as representatives of the Government that established that mess, the DfT are part of the problem. The ROSCOs claim to be professional businesses so if they have found themselves in an unexpected position, that is their failing they have to live with.

 

[Goldfish62]

I wonder if the 379s could be the newest trains yet to go for scrap.

 

[JonathanH]

I wonder if the 379s could be the newest trains yet to go for scrap.

Clearly they could be (eg they are young enough by recent standards) although they are older than many steam locomotives that went for scrap in the 1960s.

The ROSCOs claim to be professional businesses so if they have found themselves in an unexpected position, that is their failing they have to live with.

Are the ROSCOs acting any differently to the owners of office buildings?

There seems to be some odd perception that trains are some sort of special asset that doesn't have the same characteristics of other things people might invest in.

Offices sit empty for years in some cases, so do retail premises, aircraft, ships and so on. Rolling stock investment carries its own risks, particularly in what is a fairly illiquid market.

 

[Paul Jones 88]

Gillette 379 in the supermarket before Christmas.

 

[43096]

It is the leasing companies that have been dysfunctional because they underpriced the risk. Yes, they have been bitten on the proverbial, but it is not for taxpayers to bail them out. DfT still have the option of buying new stock, if the leasing companies overcompensate in prices of new leases, because they can borrow more cheaply.

I think neither DfT or HM Treasury are concerned about shortage of stock or overcrowding, what they are concerned about is cutting public subsidy to the railway.

Specifically, it is the new entrants to the rail leasing market that have under-priced the risk. Angel, Eversholt and Porterbrook have long understood the risk, having had various fleets off lease at various times. The new entrants like Rock Rail have probably won orders by under-pricing the risk: the word was that when the 707s were in danger of having no future home that the new entrants were ****ting themselves because they thought they had a risk-free investment, even though Section 54 agreements weren't in place.

 

[pdeaves]

I wonder if the 379s could be the newest trains yet to go for scrap.

As a class (excluding 'one off' accident victims), possibly.

 

[bramling]

Specifically, it is the new entrants to the rail leasing market that have under-priced the risk. Angel, Eversholt and Porterbrook have long understood the risk, having had various fleets off lease at various times. The new entrants like Rock Rail have probably won orders by under-pricing the risk: the word was that when the 707s were in danger of having no future home that the new entrants were ****ting themselves because they thought they had a risk-free investment, even though Section 54 agreements weren't in place.

At the end of the day, the DFT has presided over all this.

 

[ashkeba]

It is the leasing companies that have been dysfunctional because they underpriced the risk.

Maybe the "expensive" 379s were the most accurately priced?

 

[bramling]

Maybe the "expensive" 379s were the most accurately priced?

The trouble is that the DFT has driven a coach and horses through the risk profile by accepting - and no doubt encouraging - some of the “total fleet replacement” franchise bids.

That’s a problem when new or nearly new smaller fleets are then tossed aside and it’s simply regarded as the leasing company’s problem. We would have been here even without Covid.

 

[gc4946]

I hope they don't go to scrap soon.
If a TOC doesn't take them on, possibly Gautrain in South Africa who runs Electrostars (resembling 357s) https://en.wikipedia.org/wiki/Gautrain#Rolling_stock could take them on as cheap(er) replacements or to supplement their fleet

 

[Magdalia]

The total fleet replacement franchise bids were a natural consequence of low interest rates that followed the 2008 banking crisis, because financing costs were significantly reduced. New stock was cheaper for the taxpayer than investing in existing fleets. I think historians will look back on this and see that total fleet replacement franchises were a great success in getting investment in modern trains at the time when finance costs were lowest.

The DfT have not driven a coach and horses through the risk profile. The leasing companies made a business mistake leaving themselves exposed to a downside risk that changing travelling patterns would reduce the demand for rolling stock. The risk of a pandemic was always there, it is just that some leasing companies did not price it in.

It is the stock financed while interest rates were still high that have the highest financing costs and therefore most at risk.

 

[HamworthyGoods]

I wonder if the 379s could be the newest trains yet to go for scrap.

I’d have thought this prize would have gone to BR’s 9F fleet. 251 locos built between 1954 and 1960 with withdrawals starting in 1964 and class extinct in 1968.