East Coast Franchise Short Listed Bidders

Eagle · 19 Jan 2014

So by that logic they should have kicked Arriva out when DB bought them out?

Why does the ultimate owner have any bearing on it? It makes no material difference at ground level.

RailUK Forums

RochdalePioneers · 19 Jan 2014

More needs to be made politically of ownership. The Tories attack Labour suggesting they want to renationalise the railways, but most franchises are at least part nationalised, by foreign governments.

That Deutsche Bahn owns Arriva owns Chiltern proves comprehensively that state ownership can be efficient and not a burden on the taxpayer

yorksrob · 19 Jan 2014

Quite. If they were so relaxed about Government ownership, they shouldn't have specifically banned it in legislation.

It illustrates that the legislation has nothing to do with how efficient state versus private companies are and everything to do with baseless ideology.

Tetchytyke · 20 Jan 2014

Muzer said:
Given what happened with Wrexham & Shropshire's collaboration with Chiltern due to being owned by the same company (them getting reprimanded for it

Chiltern Railways were fined because they attempted to use Wrexham and Shropshire to deliver franchise commitments. The issue wasn't that DB owned both companies, the issue was that Chiltern weren't fulfilling their contractual obligations.

yorksrob said:
It's "sacrilege" for a foreign government to have a stake in any part of the network. All of our Governments bang on about how important it is for train companies to be privately owned, they should have the courage of their convictions and make sure that they are privately owned.

They are privately owned, though; it just so happens that the overall owner of an "innovative franchise partner" is another government.

I don't really care whether the "innovative franchise partner" is ripping me off to fund caviar and yachts for their directors, or whether they're ripping me off to fund cheaper train tickets and investment in their home country. What I care about is the fact that the "innovative franchise partner" is ripping me off.

TEW · 20 Jan 2014

tbtc said:
I do wonder, sometimes, it seems to be sacrilege for a "foreign Government" to have a stake in it, or for a "bus" company to operate it, unlike other TOCs.
Seems the ECML is "different", and has some amazing "flagship" status - really not convinced myself.

But of course there aren't really any other types of franchisee, it's either what was originally a bus company or a foreign train company.

E-Rail · 20 Jan 2014

Sea Containers had years of experience of transport operations before wining ICEC.

They purchased Sealink at privatisation and put Chris Garnett in charge, they owned Hoverspeed and launched the Seacats and Super Seacats, for a short time they also owned the Isle of Mann Steam Packet company. Then you have the Orient Express group of trains and hotels plus the Seastreak and Silja Line operations.

Its fair to say, Sherwood had far more experience of passenger transport than Branson did at the time, who's lack of experience soon came to show when he called on Souter to bail him out in 1998. I am fairly confident that had the DFT been able to offer Sherwood a longer deal to take on the West Coast in 1997 and modernise it, Sea Containers would have bagged it with ease.

There is no prospect of Sherwood returning to the franchising game now. He is 80 and has no involvment in either SeaCo or Orient Express Hotels any more.

Stats · 20 Jan 2014

Brunel said:
Then there would be problems, or looks like problems, with one company effectively running both West and East coast lines.

Lets be quite clear it is on public record from the days when the OFT assessed the competion concerns of all bidders who pre-qualified that they have no problems with the same company running both franchises, primarily because they are in competition with air over the London to Scotland flows.

http://www.oft.gov.uk/OFTwork/mergers/decisions/2004/virgin#.Ut1vGX2nxcs

In relation to the rail routes from London to Edinburgh, Glasgow and Dundee, the evidence suggests that even where there is a clear overlap between an ICEC rail service and an existing Virgin rail service, as on London to Glasgow, there is every prospect for continued vigorous competition from airlines which transport the vast majority of passengers on these flows.* Any overlaps with Megabus do not raise concerns, in part because of the differentiation in the price and service offering between Megabus and the ICEC franchise and in part because Megabus will also face continued competition from National Express.* Similarly, any overlaps with Scotair do not raise concerns because of the limited overlap and proximity of strong airline competition at Edinburgh airport.

They did, however, rule there was competition concerns with the same company running both ICEC and XC franchises because of the overlap they would be the sole operator on 4 particular flows between Doncaster and Edinburgh with no prospect of competition from air or new rail entry.

That was 10 years ago. The criteria that OFT use to decide whether to refer to the Competition Commission has changed. The OFT can now apply their discretion not to refer to the CC where among other things that the turnover of the flows where there are competition concerns are less than £10m per annum.

Simon11 · 20 Jan 2014

Let's also remind ourselves that Virgin train trains and planes between London & Manchester. Slightly different markets, but that doesn't appear to have cause any issues (Partly due to other plane operators?).

swt_passenger · 20 Jan 2014

Stats said:
Lets be quite clear it is on public record from the days when the OFT assessed the competion concerns of all bidders who pre-qualified that they have no problems with the same company running both franchises, primarily because they are in competition with air over the London to Scotland flows.

http://www.oft.gov.uk/OFTwork/mergers/decisions/2004/virgin#.Ut1vGX2nxcs

They did, however, rule there was competition concerns with the same company running both ICEC and XC franchises because of the overlap they would be the sole operator on 4 particular flows between Doncaster and Edinburgh with no prospect of competition from air or new rail entry.

That was 10 years ago. The criteria that OFT use to decide whether to refer to the Competition Commission has changed. The OFT can now apply their discretion not to refer to the CC where among other things that the turnover of the flows where there are competition concerns are less than £10m per annum.

Well done for digging that useful information out - I would be very surprised if anything had changed, as otherwise certain bidders wouldn't even appear on shortlists.

At the same time I'd expect the myth won't ever go away... :roll:

LateThanNever · 20 Jan 2014

RochdalePioneers said:
More needs to be made politically of ownership. The Tories attack Labour suggesting they want to renationalise the railways, but most franchises are at least part nationalised, by foreign governments.

That Deutsche Bahn owns Arriva owns Chiltern proves comprehensively that state ownership can be efficient and not a burden on the taxpayer

True, but a pity there are no Brits apart from bus cos able to operate abroad - and also a pity (bearing in mind your name!) there are no railway co-ops (perhaps yet) operating. That should properly wake up both the owners and the unions.

JohnCarlson · 20 Jan 2014

tbtc said:
I suppose that the two questions are:

(and I say that as a critic of most OAO - I think its generally a waste and a duplication of resources and would much rather that Sunderland/ Hull saw all of their services rolled in to the main EC franchise)

Do you need to use Grand Central though. I do and I think they are much cheaper and nicer staff than EC trains.

John

westv · 20 Jan 2014

Whoever takes over I'll be cheesed off if they get rid of:-

Complimentary food/drink
The ability to be able to choose your reserved seat
Reward points

Tetchytyke · 21 Jan 2014

Stats said:
They did, however, rule there was competition concerns with the same company running both ICEC and XC franchises because of the overlap they would be the sole operator on 4 particular flows between Doncaster and Edinburgh with no prospect of competition from air or new rail entry..

Using that logic, though, there would be no issue with ICEC and XC being operated by the same company because they're competing with Megabus coaches and BMW road cars.

Good to see that DafT are as grounded in reality as they ever were.

Deerfold · 21 Jan 2014

Arctic Troll said:
Using that logic, though, there would be no issue with ICEC and XC being operated by the same company because they're competing with Megabus coaches and BMW road cars.

Good to see that DafT are as grounded in reality as they ever were.

As far as I know the only restrictions that have been imposed when franchisees have taken over have been on coach services (price controls between the Midlands and London for National Express) and bus services (Making it harder to reduce or withdraw services when First won the Scotrail franchise)

WestCoast · 21 Jan 2014

Simon11 said:
Let's also remind ourselves that Virgin train trains and planes between London & Manchester. Slightly different markets, but that doesn't appear to have cause any issues (Partly due to other plane operators?).

Well, Virgin Atlantic Airways only began operations last year on domestic routes (branded as "Little Red") between Heathrow and Manchester, Edinburgh and Aberdeen after British Airways purchased Bmi (British Midland).

Aviation is of course now a free market, but is constrained at Heathrow due to a lack of slots. When BA bought bmi they gained a complete monopoly on domestic GB routes from Heathrow, which resulted in the Competition Commission forcing them to give up slots for services to Edinburgh and Aberdeen to another airline. Virgin won them and also added services to Manchester. The actual planes are operated by a different airline (Aer Lingus), but that's fairly irrelevant as Virgin control everything.

Virgin is still seen by many in aviation as a little guy against the big boys, which IMO is not entirely true, but they certainly don't command that reputation in rail anymore.

So, all in all, it's not really an issue to consider.

Tetchytyke · 22 Jan 2014

Deerfold said:
As far as I know the only restrictions that have been imposed when franchisees have taken over have been on coach services (price controls between the Midlands and London for National Express) and bus services (Making it harder to reduce or withdraw services when First won the Scotrail franchise)

Yeah, I know. I obviously didn't quite explain myself quite right.

Saying that the same company can run the ECML and WCML "because their real competitor is air" makes a mockery of any competition law in public transport. All transport corridors have BMW as a competitor, after all.

Using that stupid logic Stagecoach should have been allowed to get away with their behaviour in Preston as their "real competitor" is clearly Honda :roll:

And people want the morons at DafT- never knowingly competent- to run the whole lot after nationalisation!

Deerfold · 22 Jan 2014

Arctic Troll said:
Yeah, I know. I obviously didn't quite explain myself quite right.

Saying that the same company can run the ECML and WCML "because their real competitor is air" makes a mockery of any competition law in public transport. All transport corridors have BMW as a competitor, after all.

Using that stupid logic Stagecoach should have been allowed to get away with their behaviour in Preston as their "real competitor" is clearly Honda :roll:

And people want the morons at DafT- never knowingly competent- to run the whole lot after nationalisation!

But how much competition is there between the ECML and WCML?

Unless you're going from Edinburgh or Glasgow (or connecting in from further North) there's not much.
If that's enough should Chiltern and LM both be run by DB?

Tetchytyke · 22 Jan 2014

Deerfold said:
But how much competition is there between the ECML and WCML?

Probably not that much anymore, even from the central belt, given that East Coast have all but pulled out of Glasgow. But it still doesn't sit right, at least for me.

I'd definitely say that the WCML, London Midland, Chiltern and Great Western franchises should not be controlled by the same company, for competition purposes. I'd say the same about the Southern, South Eastern and South Western franchises too, although DafT clearly don't agree with the first two.

I know the view that they take is that the franchise process is the competition, but that's not strictly true. Fares would certainly be a lot higher on the Brighton line if Southern and Thameslink or Southern and South West Trains were merged or controlled by the same company.

swt_passenger · 22 Jan 2014

Arctic Troll said:
Fares would certainly be a lot higher on the Brighton line if Southern and Thameslink [...] were merged or controlled by the same company.

That's a when though, not an if.

The TSGN ITT already requires the future incumbent to sort out the differences between current FCC only and SN set any permitted fares. The caveat is that they have to do it while avoiding a sudden shock to existing FCC ticket holders.

yorksrob · 22 Jan 2014

So arguably, even the Government doesn't believe in competition in any meaningful sense for the passenger.

Tetchytyke · 22 Jan 2014

swt_passenger said:
The TSGN ITT already requires the future incumbent to sort out the differences between current FCC only and SN set any permitted fares.

I didn't know that. I wish I could say it surprises me but it really doesn't.

Conclusive proof, if ever it was needed, that DafT and this government are only interested in lining the pockets of the fat cats at the TOCs.

tbtc · 22 Jan 2014

yorksrob said:
So arguably, even the Government doesn't believe in competition in any meaningful sense for the passenger.

Firms have to compete to win franchises, firms then have to compete for passengers, hence the discounted/ route specific/ advanced tickets that you see, even in areas where only one TOC provides a flow.

What kind of competition do you want?

(and this is way off topic)

aleph_0 · 22 Jan 2014

Arctic Troll said:
And people want the morons at DafT- never knowingly competent- to run the whole lot after nationalisation!

Nationalisation doesn't mean DfT should micromanage the whole operation. DOR (or multiple DOR-type companies) could be in charge of day-to-day operation, similar to the way the East Coast mainline runs at the moment. It could be structured such that e.g. the East and West Coast companies are encouraged to compete. Of course, there could also be provision to discourage 'competetive' pricing schemes that overall are not beneficial to the public.

yorksrob · 22 Jan 2014

tbtc said:
Firms have to compete to win franchises, firms then have to compete for passengers, hence the discounted/ route specific/ advanced tickets that you see, even in areas where only one TOC provides a flow.

What kind of competition do you want?

(and this is way off topic)

Since we're all about competition, competition on fares between FCC and Southern seems to be one of those stand out occasions where this has actually occurred. Similar to areas where open access operators compete with franchisees.

It just seems odd that the powers that be are getting rid of it.

In an area where one TOC provides a flow, you might get them competing for custom with advance tickets, you might not, depending on how innovative they're feeling. It's a bit nebulous - like the fabled "trickle down effect" in the 80's.

swt_passenger · 22 Jan 2014

yorksrob said:
It just seems odd that the powers that be are getting rid of it.

How come? As we already know for a fact they are merging the two franchises it would be odd if they didn't remove the separate fares.

Isn't that just what people want them to do with the regularly discussed GatEx fares?

So we complain when they do and complain when they don't... :roll:

yorksrob · 22 Jan 2014

swt_passenger said:
How come? As we already know for a fact they are merging the two franchises it would be odd if they didn't remove the separate fares.

Isn't that just what people want them to do with the regularly discussed GatEx fares?

So we complain when they do and complain when they don't... :roll:

Im sure people might agree if fares were going to be standardised at the lower level. But how likely is that ?

Starmill · 22 Jan 2014

yorksrob said:
I‘m sure people might agree if fares were going to be standardised at the lower level. But how likely is that ?

I was just going to say this. I agree that the 'competition' element should come in with the franchise award (reserving my judgement about weather that actually works or not) rather than on the rails, but it's nonetheless if the passenger viewpoint is that the merging of operators means the lower fares are removed that's an obvious departure from what is in the passenger's interest and the effects of franchising. Perhaps the new Any Permitted fares can be brought down to the average of present fares, rather than simply abolishing FCC only and continuing to increase the new fare each year. As yorksrob says, fat chance!

Stats · 22 Jan 2014

Arctic Troll said:
Yeah, I know. I obviously didn't quite explain myself quite right.

Saying that the same company can run the ECML and WCML "because their real competitor is air" makes a mockery of any competition law in public transport. All transport corridors have BMW as a competitor, after all.

Using that stupid logic Stagecoach should have been allowed to get away with their behaviour in Preston as their "real competitor" is clearly Honda :roll:

And people want the morons at DafT- never knowingly competent- to run the whole lot after nationalisation!

Why have you brought DfT into this?

BantamMenace · 22 Jan 2014

Going back closer to the topic, havent i read before that first hull trains have offered to fund the electrification from the ECML to hull?

Would there be any scope for the new franchise operator to commit to investments such as that?

Such investments that spring to mind are payments to speed up electrification to places like harrogate, middlesborough, lincoln and maybe sunderland if they were to take over the GC route as well.

Maybe line speed and electrification to the north of scotland as well.

Just to add a personal opinion id be strongly in favour of GC, fHT and EC being combined to offer two hourly services to the above mentioned places from London Kings Cross.

tbtc · 23 Jan 2014

Robbo1509 said:
Going back closer to the topic, havent i read before that first hull trains have offered to fund the electrification from the ECML to hull?

Would there be any scope for the new franchise operator to commit to investments such as that?

Such investments that spring to mind are payments to speed up electrification to places like harrogate, middlesborough, lincoln and maybe sunderland if they were to take over the GC route as well.

Maybe line speed and electrification to the north of scotland as well.

Just to add a personal opinion id be strongly in favour of GC, fHT and EC being combined to offer two hourly services to the above mentioned places from London Kings Cross.

Glad we're back on topic.

I think that the ECML bidders are in the relatively unsual position of being able to offer to pay for some infrastructure improvements that would benefit ECML passengers (and therefore, obviously, benefit the winning bidder), rather than just paying money to the Government in premium (since the ECML has been one "banker" in terms of not needing any subsidy).

I suppose there's the debate about whether "profits" on the ECML should be used to pay for improvements on the ECML, or whether they should be used to pay for the loss making "Provincial" operations, but that maybe depends on whether you are a regular ECML passenger who'd only want the "profit" being made from "your" line being used to prop up services elsewhere (personally, I'm happy for the "profit" made on one line to subsidise other lines, since I accept that not every line can be profitable, but there are limits)

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