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Abellio to return Greater Anglia to DfT?

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Monty

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*I am unsure if the Railway pension scheme is allowed to invest in the railway so cancel any rail workers in that statement

I would like to think the railways pension scheme would know better than to invest our money in a fringe industry like the railway. ;)
 
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LNW-GW Joint

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I would like to think the railways pension scheme would know better than to invest our money in a fringe industry like the railway. ;)

Funny how the biggest pension investor in UK infrastructure is Ontario Teachers and another similar Canadian pension fund (HS1 etc).
Do they see things we don't?
 

HH

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It appears their not too bothered about collecting any potential revenue, for the best part of the last two weeks the barriers & gateline have been open at Shenfield throughout the day and night.

Where do you imagine they might have gone to? What little event started about 2 weeks ago (hint: it's at Stratford)?

People, please engage brain before hitting the keyboard.
--- old post above --- --- new post below ---
A bit of googling suggest the 3% peddled by ATOC is a bit on the conservative side;

Northern £32m profit from £615m revenue, 5.2% margin and not as penniless as they claim to be :roll:

Those "huge" :lol: £32m profits are split between NS & Serco. Serco are so impressed with them that they are getting out of Rail...
--- old post above --- --- new post below ---
So revenue is leaking away, and they are still making a profit?

Bearing in mind that 3% is a fairly "typical" amount of profit for TOCs?

And you are telling us that they were planning for a 9% profit, despite paying over £50m more premium than Stagecoach planned to?

Not convinced, sorry. Wait for the Olympics to get over so they can get on with the "bread and butter".

They bid below 3%, so they must be making a loss. I'd guess that their share of the 'huge' Northern profit would cover it though.
 

Barn

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Are you saying the profits should simply be confiscated to reinvest? And if so wouldn't that just destroy any company's incentive to try to do a good job of running trains, and so do more harm than good? 5% is not after all an excessive return to make on an investment. (After all, before the banking crisis and subsequent recession set in it and wiped out interest rates it wouldn't have been that uncommon to be able to make 3 or 4% just by putting your savings in a high interest fixed term savings account).

I agree with the point that profit is not evil in itself, but aren't we talking 5% of revenue, not a 5% return on an amount invested?

Profit should always be a reward for risk. For me the real problem with our model is that we do not require enough investment from TOCs and thus there is insufficient risk.

 

Pugwash

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Greater Anglia needs some proper sustained investment to get back onto an even keel, some extra stock would help to allow units to go away for total overhaul.

However I feel the primary problem is that the infastructure is being pushed to the limits. More on the former WAGN lines than the GEML, which will naturally improve one the OHL is finished and crossrail takes over the suburban.
 

HH

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Well something appears to be going right...

Rail punctuality figures in the region have hit an eight year high, according to new figures released today.

Almost 95pc of Greater Anglia trains were on time last month, the latest performance figures from Network Rail show. The rail operator, which took control of the East Anglian franchise in February, recorded a 4pc increase in punctuality between June 24 and July 21 compared to the same period last year when National Express East Anglia were running the network.

Officials from Greater Anglia said the 94.56pc punctuality figure was a sign that closer working with Network Rail staff was beginning to pay off. The figure is the highest public performance measure (PPM) for any four week period since the current franchise structure for the East Anglia region was introduced in 2004. Punctuality on rural routes in Norfolk, Suffolk and Cambridgeshire was even higher at 94.8pc whilst mainline services were at 93.4pc.

Ruud Haket, managing director of Greater Anglia said: “I am extremely encouraged that after just six months operation of the new Greater Anglia franchise, the work we are jointly taking forward with Network Rail in forging a much closer partnership to deliver better train service performance, has helped to achieve the best four-week period of performance in this franchise so far. The continued improvement in punctuality across the Greater Anglia network is very pleasing and in recognising that there is still more work to do in delivering the consistent levels of train service performance that our customers expect, we will continue to work with our colleagues at Network Rail in focusing on further improvement.”

Greater Anglia’s first punctuality figures for the network were 91.8pc in March. First Capital Connect recorded a punctuality figure of 92.9pc and East Midlands Trains 91.1pc, according to the latest figures. The national average was 92.7pc.
 

captainbigun

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^^ But how much of this is down to the fact that NR have finally replaced the problematic areas of OHL and are a good way through the London to Chelmsford renewals?

Let's see those figures sustained for several years before getting too excited.
 

HSTEd

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A bit of googling suggest the 3% peddled by ATOC is a bit on the conservative side;

Northern £32m profit from £615m revenue, 5.2% margin and not as penniless as they claim to be :roll:

Virgin £39.9 on £753m revenue, 5.2%

NX Rail division £16.1 on £335.1m, 4.8%

First Rail division £148.8m on £2.3bn, 6.4%

A fraction of that money could do wondrous things for the industry...

The achieved yields are actually far higher than that, which means many peoples comparison with "savings accounts" are complete nonsense, since I doubt First has invested £2.3bn of its own money in generating that income of £148.8m.

There are several lower margin industries than this one.
 

HH

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The achieved yields are actually far higher than that, which means many peoples comparison with "savings accounts" are complete nonsense, since I doubt First has invested £2.3bn of its own money in generating that income of £148.8m.

There are several lower margin industries than this one.

Margin is also related to risk. As FGW has shown, profit is not guaranteed. Low margin industries are usually low risk industries. Otherwise they are shrinking industries...
 

jon0844

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There is probably a lot more risk for a relatively low margin in the rail industry than in others.

For one, there are many things that are outside of the control of a TOC but can have a devastating effect, from reliability issues with rolling stock to the infrastructurer itself. The TOC has to accept being blamed for almost everything, and often being powerless to change things (like getting new rolling stock or being able to add new services).

I do often wonder why companies bother to bid!
 

47421

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Interesting. When they won and then started operating franchise they announced various initiatives (see eg below) and said 'most would be implemented before the olympics'. I wonder how many will actually ever now be implemented.

For example they said there would be improved first class on stansted express but nothing seems to have happened. Nothing about the 'virtual station' (actually some extra buses apparently) for saffron walden. No new info kiosks at Stortford or Cambridge . And nothing about the planned new consumer groups.

What they have done is increase off peak day return fares and confuse the fare structure more than ever by introducing super off peak day returns. There was nothing in any announcements about this - happened very stealthily virtually overnight. Perhaps that has increased revenue less than they hoped?



"Ruud Haket, Managing Director of Abellio Ltd, the company running the short term (29 months from Feb 2012) Greater Anglia franchise, gave a presentation on their plans:
• New branding kept to a minimum to reduce cost and allow quick transfer
• 100 additional revenue protection staff as well as improved staff training and equipment
• Better service information at Tottenham Hale, Seven Sisters and Walthamstow and new kiosks at Bishops Stortford and Cambridge
• Ticket offices retained and complemented by new forms of ticketing including via mobile phones and print at home
• Oyster PAYG extended to Broxbourne and the Hertford East branch
• Existing fleet better utilised which means some units are no longer required but there is no reduction in service levels
• Refresh of all stations including a deep clean at 23 London stations which has been sponsored by TfL
• Additional cycle and car parking and a trial of a virtual station at Saffron Walden
• Better engagement with user groups and support for partnerships
• Close working with Stansted Airport Ltd to make sure the Stansted Express remains a premium product."
 

HSTEd

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There is probably a lot more risk for a relatively low margin in the rail industry than in others.

For one, there are many things that are outside of the control of a TOC but can have a devastating effect, from reliability issues with rolling stock to the infrastructurer itself. The TOC has to accept being blamed for almost everything, and often being powerless to change things (like getting new rolling stock or being able to add new services).

I do often wonder why companies bother to bid!

How much of the company's own money is actually put up for the duration of the franchise? About all I can think of is the season ticket and other fare bonds.
Which are far smaller than the incomes we are talking about here.

And if a franchise is loosing money the company can walk away without serious consequence.
 

HH

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And if a franchise is loosing money the company can walk away without serious consequence.

There is likely to be quite a serious consequence. Apart from losing many £ms (the new franchises are likely to see considerably more funding this time round), there could be knock-on effects with other franchises.
 

390026

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"Ruud Haket, Managing Director of Abellio Ltd, the company running the short term (29 months from Feb 2012) Greater Anglia franchise, gave a presentation on their plans:
• New branding kept to a minimum to reduce cost and allow quick transfer
• 100 additional revenue protection staff as well as improved staff training and equipment
• Better service information at Tottenham Hale, Seven Sisters and Walthamstow and new kiosks at Bishops Stortford and Cambridge
• Ticket offices retained and complemented by new forms of ticketing including via mobile phones and print at home
• Oyster PAYG extended to Broxbourne and the Hertford East branch
• Existing fleet better utilised which means some units are no longer required but there is no reduction in service levels
• Refresh of all stations including a deep clean at 23 London stations which has been sponsored by TfL
• Additional cycle and car parking and a trial of a virtual station at Saffron Walden
• Better engagement with user groups and support for partnerships
• Close working with Stansted Airport Ltd to make sure the Stansted Express remains a premium product."

This is true although they did rebrand to a minimum, im unsure on the revenue protection i havent seen much of any new staff and ive been constantly checking their job site since they took over and not many vacancies for this! i dont live in london so can't say much about the service but as for the kiosk in stortford and cambridge i haven't seen any only Olympic information desks! which will probably disappear afterwards. I have been to a few GA stations and i havent noticed much difference. The stansted Express is the same.
 

HSTEd

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There is likely to be quite a serious consequence. Apart from losing many £ms (the new franchises are likely to see considerably more funding this time round), there could be knock-on effects with other franchises.

So failing to ride the gravy train with its 100-200%+ yields properly is punished by not being able to ride the gravy train again for a few years?

If the franchise lasts 3-4 months they are not going to loose any money overall.
 

Lrd

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im unsure on the revenue protection i havent seen much of any new staff and ive been constantly checking their job site since they took over and not many vacancies for this!
There were various vacancies (including revenue jobs) advertised by NXEA in their last weeks of running the show.
 

iphone76

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They do have revenue protection staff at stations on the Southend line during peak time (Olympic period excluded), although they didn't put in ticket barriers at Brentwood or Billericay before the Olympics as they said they would.

I'm not sure how the plans are going to extend the car park at my station, Wickford, which was another commitment, however, I'm not sure why they are doing this it is not full anymore due to the high cost of parking. I guess the non-GA car park which is closer and costs £1.20 per day less doesn't help.

I hope they stay and win the longer term franchise.
 

156402

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Bring back the good old days of FGE and Anglia Railways :)

Perhaps Groupe Eurotunnel should bid for the 15 year franchise, putting it back where it belongs under the 'GB Railways' umbrella! :lol:
 

The Sleeper

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We didn't hear this for you yet you posted it on a public forum that is indexed by Google?

Okay then :lol:

Also this isn't entirely surprising (if this turns out to be true rather than a rumour) I seem to recall certain elements of the media (I think Roger Ford) mentioned that the premium payments were going to be very very tough to make, so if their revenue is down then those payments will be getting harder and harder to make.

£250M in the final year or £688.000 a day!!! I queried this with Ruud Hakett just after they were awarded the franchised I asked: "how are you going to pay this, if the revenue steam goes down?" his reply was and this is a direct quote "We are Dutch Railways - we don't go broke"! Hmmm shall I ask him again?...remember that NS is still state owned so the Netherlands government could always cash the franchise in but at a huge penalty cost which might still be cheaper than paying out the £250M. I do hope they hang on to it; for if it fails, that'll be another little job for DOR after DfT have flogged off East Coast.
 

richw

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In my view if a Franchise defaults or hands back a franchise before any get out clauses become active (such as that of FGW), they should be excluded from bidding for all further franchises for a minimum of 5 years. Should stop the ridiculous over bidding if they are penalised with exclusion from future franchise bidding, with stupidly over prices bids
 

SprinterMan

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I hope GA stick around, I have become rather attached to them over their short existence. Trains are clean and on time again, so I can't complain. :P
 

Class377/5

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Abellio are apparently considering handing back the keys to the GA franchise to the DfT sooner rather than later because the revenue margin of 9% they targeted has dropped to a mere 3%.

Still only rumour but from a very, very reliable source within Greater Anglia.

Oh, and on the same note, one of the prized 379s broke down in front of the MD at Bishops Stortford today. I bet Mr Hackett was hacked off.. :lol: :lol: :lol:

The 379's have had bigger breakdowns before. Seems atleast they kept the wires up this time.

Problem with rumours into a TOC is they aren't always true but the outcome of chinese whispers that go around so long they 'become' facts.
 

HH

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So failing to ride the gravy train with its 100-200%+ yields properly is punished by not being able to ride the gravy train again for a few years?

If the franchise lasts 3-4 months they are not going to loose any money overall.

Do you read what is written, or just rant? The latter? Ah, OK.
 

ChiefPlanner

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No point ranting - especially when dealing with fact laden correspondants on here. Daily Mail style ?
 

HSTEd

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Do you read what is written, or just rant? The latter? Ah, OK.

Since a franchise can just be handed back effectively at will, as shown with First, they can easily stem any losses they make.

So they are only risking the money they spent on the bid and that goes into the season ticket and other fare bonds.

This totals maybe £50-60m even for the ICWC franchise, which is a few months of profit at these rates.

The yields are absolutely enormous, and they won't even loose all of the fare bonds since they are deliberately sized so that they are large enough to cover all circumstances.

But because I am questioning the idea that its a "tiny profit" I must be ranting.
Being barred from future franchises is not really a punishment, since they don't loose any money by doing so. (An opportunity cost is NOT the same as a real cost)
 

ainsworth74

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Since a franchise can just be handed back effectively at will, as shown with First, they can easily stem any losses they make.

Er, no they can't. First were only able to hand back GW early because they had a pre-existing break point in the contract. If that hadn't existed they'd wouldn't have been able to drop the franchise early without, I would assume, inflicting penalties on themselves.
 
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