TfGM Tranche 3 speculation

[158756]

Good post. Spot on.

My surprise in all this is that incumbent operators haven't done better so far. To my simple mind they will have many fewer unknown unknowns than other operators.

For example if Stagecoach lose Hyde Rd, the incoming operator may not get as many staff TUPEing across than they anticipated because the staff may prefer to transfer to another Stagecoach garage rather than work for someone else, particularly if they are long serving.

It's going to be interesting; has TfGM set formal or informal market share ceilings I wonder? They've certainly made an effort to attract smaller operators.

The incumbent having fewer unknowns is only an advantage if other bidders are conservative with the costs of these unknowns. If someone underbids it doesn't matter if others know it can't be done at that price, they still win the contract.

Tbh, with franchising in Manchester being so new and the big all or nothing contract awards potentially encouraging risky bids to avoid missing out entirely, I wouldn't be surprised if someone does win by getting the sums completely wrong and ends up losing loads of money and/or trying to hand the franchise back.

Based on what I've heard (and my own speculation) I would predict that Hyde Rd will stay with Stagecoach. Hyde Road depot is very close to Piccadilly, which Stagecoach will be keen to keep. With regards to Ashton, I would also imagine Stagecoach to keep. Sharston and Wythenshawe, however, I predict First to bid for. It would be logical for them to take over the whole Wythenshawe and Airport area, giving them a large area again in Manchester. Stockport is an interesting one. Possibly Go-Ahead, but another operator who isn't currently operating in Manchester could fancy their chances?

Maybe Tranche 3, as the largest, will be different, but so far all the large depots in each Tranche have gone to the same operator. If all the bids are going in together it makes sense that operators will use the same cost assumptions for all of them, so whoever has the lowest bid for one will probably have the lowest bid for all. There aren't really any advantages to incumbency or much reason to think any operator particularly wants a specific depot. I suppose maybe a smaller operator like Diamond might not want to win the whole of Tranche 3 in one go.

 

[daodao]

First/Go North West sound like somewhat reasonable shouts, and you can't rule out a surprise operator; but it'll be very interesting to see how much Stagecoach win. Most of the stuff up this time is Stagecoach as I recall, with the exception of Arriva's Trafford services. Can't see it going over too well if Stagecoach lose lots of their big routes. Especially Sharston - because the 43 is arguably the most valuable route of them all and the crown jewel of whoever gets to keep it.

I have been informed recently that Stagecoach's Sharston depot/office is being allowed to run down with minimal maintenance and repair of any defects, in the full expectation that Stagecoach will lose this depot and the services based at it when franchising takes effect.

 

[StagecoachBus1]

The incumbent having fewer unknowns is only an advantage if other bidders are conservative with the costs of these unknowns. If someone underbids it doesn't matter if others know it can't be done at that price, they still win the contract.

Tbh, with franchising in Manchester being so new and the big all or nothing contract awards potentially encouraging risky bids to avoid missing out entirely, I wouldn't be surprised if someone does win by getting the sums completely wrong and ends up losing loads of money and/or trying to hand the franchise back.



Maybe Tranche 3, as the largest, will be different, but so far all the large depots in each Tranche have gone to the same operator. If all the bids are going in together it makes sense that operators will use the same cost assumptions for all of them, so whoever has the lowest bid for one will probably have the lowest bid for all. There aren't really any advantages to incumbency or much reason to think any operator particularly wants a specific depot. I suppose maybe a smaller operator like Diamond might not want to win the whole of Tranche 3 in one go.

True, however, with Tranche 3, each depot (exception of Wythenshawe), has several major routes. For example, Hyde Rd has the 38, 142, 201, 250 as well as other high frequency, busy services. At present Stagecoach are able to run an every 1 minute Magic Bus 142 from Fallowfield to Piccadilly (Part Route mostly for students) rather well. Would another operator be able to manage frequency like this, whilst also having enough vehicles to operator many other routes of a similar (slightly less frequent) nature? So, for this reason, I do think that the depots would have to split up between operators. Regarding Sharston and Wythenshawe depots, First have not worked in this area for many years, and this would give them a new chance to expand. In addition, they would also have the routes linking the airport to Piccadilly (43, 103), as well as the 263, 101, and 143. Sharston would also give First lots of school services, some of which stretch from quite far around the network into Altrincham and Hale Barns.

Would it really be possible for one operator to take over all of this, considering Stagecoach have successfully won lots of busy and high frequency routes in North Manchester?

 

[TheGrandWazoo]

Abellio have already said in Coach & Bus Week, a while ago, that they are no longer interested in Greater Manchester franchising, as there is something they do not like about it, for which the article doesn't specify. I also doubt that based on previous franchises, that the major operator work would be broken into small pieces. I would think no more than two splits in it, and it may go with one operator gaining all the major operator work in the South as based on the West and North franchises.

The bond...

What bond is that? Performance bond in the absence of parental guarantee?

Maybe Tranche 3, as the largest, will be different, but so far all the large depots in each Tranche have gone to the same operator. If all the bids are going in together it makes sense that operators will use the same cost assumptions for all of them, so whoever has the lowest bid for one will probably have the lowest bid for all. There aren't really any advantages to incumbency or much reason to think any operator particularly wants a specific depot. I suppose maybe a smaller operator like Diamond might not want to win the whole of Tranche 3 in one go.

Past performance is no guarantee of future awards but you're right on the premise that the cost assumptions will be taken across tenders by the bidders so yeah, more likelihood in winning one = winning most. As you say, there is the potential for a smaller player to go all out on one or two packages and be more aggressive and so win one.

True, however, with Tranche 3, each depot (exception of Wythenshawe), has several major routes. For example, Hyde Rd has the 38, 142, 201, 250 as well as other high frequency, busy services. At present Stagecoach are able to run an every 1 minute Magic Bus 142 from Fallowfield to Piccadilly (Part Route mostly for students) rather well. Would another operator be able to manage frequency like this, whilst also having enough vehicles to operator many other routes of a similar (slightly less frequent) nature? So, for this reason, I do think that the depots would have to split up between operators. Regarding Sharston and Wythenshawe depots, First have not worked in this area for many years, and this would give them a new chance to expand. In addition, they would also have the routes linking the airport to Piccadilly (43, 103), as well as the 263, 101, and 143. Sharston would also give First lots of school services, some of which stretch from quite far around the network into Altrincham and Hale Barns.

Would it really be possible for one operator to take over all of this, considering Stagecoach have successfully won lots of busy and high frequency routes in North Manchester?

Again, I don't think you're really understanding what franchising actually means.

There is no issue with monopolies or whatever - Transport for Greater Manchester is the monopoly owner of the routes. They set the frequencies, and provide the premises. The drivers are likely to transfer. Even the vehicles are potentially subject to transfer and/or award as applicable if part of a vehicle pool - see the transfer of large numbers of Diamond vehicles to Go Ahead, supplemented by new vehicles (leased or owned?) and ones provided by TfGM. The whole idea of this is, apparently, to remove the power of incumbent operators.

TfGM have gone through a rigid public procurement process and firms will tender for the packages. The frequencies are set by TfGM, and yes, it is entirely possible for Stagecoach to win/retain depots. However, I wonder if we might see a bit of a change as firms are now getting used to the process and, having not won in the earlier rounds, will there be more appetite from some for taking margins lower just to get their feet in the door.

 

[Leyland Bus]

What bond is that? Performance bond in the absence of parental guarantee?

Similar to how the railway franchises were, TfGM hold a bond (reputed to be the cost of the franchise term) and that has apparently had a bearing...

 

[StagecoachBus1]

Currently, is there any indication of what depots operators would like to keep or gain in Tranche 3?

 

[TheGrandWazoo]

Similar to how the railway franchises were, TfGM hold a bond (reputed to be the cost of the franchise term) and that has apparently had a bearing...

A performance bond in case of default then - thanks for confirming

Currently, is there any indication of what depots operators would like to keep or gain in Tranche 3?

No. I can't recall if tranche 2 submissions were made public but that's probably my age

 

[johncrossley]

As someone subjected to their diabolical excuse for a bus network (admittedly not in Manchester but in south Yorkshire, though I am led to believe they are rather similar in Manchester), I'd prefer to see them wiped out entirely so that their work could be turned over to a company that actually takes some pride in providing a decent service. But I suppose that's beside the point.

Just because they are poor under deregulation doesn't mean they will be bad under franchising. For example, Arriva is heavily criticised outside London but in London they have run a decent enough service for decades. The experience in London shows a broadly consistent performance between operators and when services change from one operator to another the service is more or less equally good/bad. There are severe penalties for poor performance under franchising which forces operators to deliver.

 

[mancbus]

Based on what I've heard (and my own speculation) I would predict that Hyde Rd will stay with Stagecoach. Hyde Road depot is very close to Piccadilly, which Stagecoach will be keen to keep. With regards to Ashton, I would also imagine Stagecoach to keep. Sharston and Wythenshawe, however, I predict First to bid for. It would be logical for them to take over the whole Wythenshawe and Airport area, giving them a large area again in Manchester. Stockport is an interesting one. Possibly Go-Ahead, but another operator who isn't currently operating in Manchester could fancy their chances?

I think some routes in sharston should be moved to like Hyde road cause certain routes like the 50 don’t go to wythenshawe instead going from disbury to Salford so I think with your statement they would close the wythenshawe depot and move the routes to sharston to focus on the wythenshawe area and some routes in sharston would probably move to another depots in what your trying to say.

 

[Xenophon PCDGS]

I think some routes in sharston should be moved to like Hyde road cause certain routes like the 50 don’t go to wythenshawe instead going from disbury to Salford so I think with your statement they would close the wythenshawe depot and move the routes to sharston to focus on the wythenshawe area and some routes in sharston would probably move to another depots in what your trying to say.

Will the powers-that-be in TfGM share your way of thinking?

 

[TheGrandWazoo]

I think some routes in sharston should be moved to like Hyde road cause certain routes like the 50 don’t go to wythenshawe instead going from disbury to Salford so I think with your statement they would close the wythenshawe depot and move the routes to sharston to focus on the wythenshawe area and some routes in sharston would probably move to another depots in what your trying to say.

@jonesy3001 posted this on the now closed franchising thread

AREA C January 2025 Yet to be awarded

Hyde Road Large 15 38 42 42A 42B 42C 74 76 142 147 201 202 203 205 250 253 256 374
Sharston Large 43 50 85 86 101 102 111 143
Stockport Large 11 23 25 191 192 197 314 322 323 325 327 328 330 358 374 378 384
Tameside Large 7 216 217 219 221 230 231 237 336 346
Wythenshawe Large 18 19 150 245 247 263 281 282 284 286 287 313 368 370
Stockport Small 364 364 375
Tameside A Small 335 339 341 342 345 387 396
Tameside B Small 343 356
Trafford Small 44 84 254 260 261 262 280 288

So not much moving stuff around and removing a Wythenshawe package

 

[Redmike]

The 50 may not serve Wythenshawe but it’s only 2 miles from Sharston depot to the Parrs Wood terminus.

 

[StagecoachBus1]

I think some routes in sharston should be moved to like Hyde road cause certain routes like the 50 don’t go to wythenshawe instead going from disbury to Salford so I think with your statement they would close the wythenshawe depot and move the routes to sharston to focus on the wythenshawe area and some routes in sharston would probably move to another depots in what your trying to say.

No, what I am saying is that First will most likely want a large area, with some busy and frequent routes. There would be no need to move routes to other depots. I was making the point that, because Tranche 3 is largest, one operator would not be able to manage it all.

 

[Redmike]

No, what I am saying is that First will most likely want a large area, with some busy and frequent routes. There would be no need to move routes to other depots. I was making the point that, because Tranche 3 is largest, one operator would not be able to manage it all.

First were quite happy with a small franchise in tranche 2 though (Rochdale).

 

[StagecoachBus1]

First were quite happy with a small franchise in tranche 2 though (Rochdale).

That's true, but I've heard some speculation that they are keen to take quite a large chunk of Tranche 3.

 

[SeanM1997]

This maybe an obvious question - but if an operator wins a tranche (lets say Stockport Large Depot), can they then use that depot to bid for other routes (lets see Cheshire East 391/392 Stockport - Macclesfield) or start other commercial services or must the depot be used solely for TfGM specified services?

 

[Leedsbusman]

This maybe an obvious question - but if an operator wins a tranche (lets say Stockport Large Depot), can they then use that depot to bid for other routes (lets see Cheshire East 391/392 Stockport - Macclesfield) or start other commercial services or must the depot be used solely for TfGM specified services?

Probably not. The Tranche 1 procurement required a large depot only to be used for the large franchise and all that large franchise’s work to be run from that depot. That said GNW are running Bolton work from Heywood so that’s gone out of the window already!

 

[Xenophon PCDGS]

This maybe an obvious question - but if an operator wins a tranche (lets say Stockport Large Depot), can they then use that depot to bid for other routes (lets see Cheshire East 391/392 Stockport - Macclesfield) or start other commercial services or must the depot be used solely for TfGM specified services?

I may be a tad confused here, but once all the tranche 3 matters have been granted, is it the case that the bidding process has been ended until it is time when the time period of these comes to an end? A depot can only bid for other routes only when the next franchises are granted, not in any intermediate period.

 

[Leedsbusman]

I may be a tad confused here, but once all the tranche 3 matters have been granted, is it the case that the bidding process has been ended until it is time when the time period of these comes to an end? A depot can only bid for other routes only when the next franchises are granted, not in any intermediate period.

Unless there are new routes, different time periods etc. A theoretical one but the winner of t2 Oldham large may have wanted to bid for Tameside T3 small but if so wouldn’t be able to use Oldham large depot.

 

[SeanM1997]

Probably not. The Tranche 1 procurement required a large depot only to be used for the large franchise and all that large franchise’s work to be run from that depot. That said GNW are running Bolton work from Heywood so that’s gone out of the window already!

Thanks for the response - it just appears that this could limit those depots on the edge of Greater Manchester from bidding for tendered work from cross boundary services going forward

 

[Leedsbusman]

Thanks for the response - it just appears that this could limit those depots on the edge of Greater Manchester from bidding for tendered work from cross boundary services going forward

It will limit it completely because that is not what those depots are for. Nothing to stop the operator of that depot bidding from another depot though.

 

[Andyh82]

This maybe an obvious question - but if an operator wins a tranche (lets say Stockport Large Depot), can they then use that depot to bid for other routes (lets see Cheshire East 391/392 Stockport - Macclesfield) or start other commercial services or must the depot be used solely for TfGM specified services?

A good question, an example would be Works Services such as Amazon that would be a completely private contract, or maybe School services to private schools that are not arranged by TfGM

 

[StagecoachBus1]

This may seem an obvious question, but what will happen to the many local routes around Stockport, ran by small independents, like the 309/310 by Nexus Move and the 364 by Stotts when tranche 3 arrives? Will they just go to the big operator who win the Stockport depot?

 

[Mollman]

Thanks for the response - it just appears that this could limit those depots on the edge of Greater Manchester from bidding for tendered work from cross boundary services going forward

I think this might be one of the differences between a large and small franchise. Large franchises come with a TfGM owned depot so they get to dictate what it is used for. A small franchise does not have a depot attached so in theory the services can be run from a depot outside of Greater Manchester or the operator can run services operating outside of Greater Manchester from their depot within Greater Manchester.

 

[TheGrandWazoo]

This may seem an obvious question, but what will happen to the many local routes around Stockport, ran by small independents, like the 309/310 by Nexus Move and the 364 by Stotts when tranche 3 arrives? Will they just go to the big operator who win the Stockport depot?

364 is part of the Stockport small package

 

[mancbus]

I think this might be one of the differences between a large and small franchise. Large franchises come with a TfGM owned depot so they get to dictate what it is used for. A small franchise does not have a depot attached so in theory the services can be run from a depot outside of Greater Manchester or the operator can run services operating outside of Greater Manchester from their depot within Greater Manchester.

True but usually all the large franchises are run by the same company with some additional routes for other depots. A small franchise can be can run outside the area. What companies do you think will be the winners?

 

[Mollman]

True but usually all the large franchises are run by the same company with some additional routes for other depots. A small franchise can be can run outside the area. What companies do you think will be the winners?

I would probably expect more of the same with Stagecoach and Go-Ahead sharing the large franchises and First, Diamond and maybe Arriva or Transdev getting smaller ones

 

[daodao]

I would probably expect more of the same with Stagecoach and Go-Ahead sharing the large franchises and First, Diamond and maybe Arriva or Transdev getting smaller ones

Arriva don't seem to be interested in retaining their existing work run from their Wythenshawe depot.
Stagecoach are expecting to lose a lot of work in South Manchester, including services from Sharston, and they aren't favourites with Burnham in view of their previous hostility to franchising.
Diamond's current delivery of services on some of their tendered routes in South Manchester (e.g. routes 370 and 371) has been poor and this will have been noticed by TfGM.

 

[py_megapixel]

Diamond's current delivery of services on some of their tendered routes in South Manchester (e.g. routes 370 and 371) has been poor and this will have been noticed by TfGM.

Are they allowed to take that sort of thing into account? I thought they had to evaluate bids anonymously

 

[TheGrandWazoo]

I would probably expect more of the same with Stagecoach and Go-Ahead sharing the large franchises and First, Diamond and maybe Arriva or Transdev getting smaller ones

I believe it's already been confirmed that Arriva didn't bid for any Bee Network packages

Arriva don't seem to be interested in retaining their existing work run from their Wythenshawe depot.
Stagecoach are expecting to lose a lot of work in South Manchester, including services from Sharston, and they aren't favourites with Burnham in view of their previous hostility to franchising.
Diamond's current delivery of services on some of their tendered routes in South Manchester (e.g. routes 370 and 371) has been poor and this will have been noticed by TfGM.

That is both ancient history, and clearly any previous animosity has been put to bed as a) they won the schools package in tranche 1, and b) are about to commence operations at Queens Road and Oldham whilst retaining Middleton.

In addition, Diamond were even more vociferous in pursuing legal avenues and that didn't stop them getting awards in both tranches too.

Are they allowed to take that sort of thing into account? I thought they had to evaluate bids anonymously

They will be required to be agnostic in this.