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East Coast Franchise
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tbtc
Veteran Member
Reading the first few pages of the ScotRail thread (http://www.railforums.co.uk/showthread.php?t=103634) should remind that most of the debate at this stage of a franchise discussion tends to be "froth" (people claiming insider knowledge etc).
There are blind bids, there aren't the same worries about competition/overlapping franchises that enthusiasts think there ought to be (otherwise we'd not see the Scotrail franchise awarded to the people running the Northern franchise and not have seen the TSGN megafranchise awarded to the people running the neighbouring SouthEastern and London Midland franchises), the DfT don't hand multi million pound franchises round in a Buggins Turn/ Consolation Prize way, the name calling of some franchises is childish.
Also, with my cynical hat on, we can't complain about the Government giving a surplus generating franchise to the private sector if we are also complaining about those private companies being so desperate to win that they are happy to pay big subsidies to the Government. The fact that GNER and National Express had their problems is no reflection on 2014 - before anyone goes down that path.
Anyhow, with IEP already on the cards, and most of the timetable being organised by the DfT, I doubt that there'll be much difference between any of the bidders other than the colour of the trains.
There are blind bids, there aren't the same worries about competition/overlapping franchises that enthusiasts think there ought to be (otherwise we'd not see the Scotrail franchise awarded to the people running the Northern franchise and not have seen the TSGN megafranchise awarded to the people running the neighbouring SouthEastern and London Midland franchises), the DfT don't hand multi million pound franchises round in a Buggins Turn/ Consolation Prize way, the name calling of some franchises is childish.
Also, with my cynical hat on, we can't complain about the Government giving a surplus generating franchise to the private sector if we are also complaining about those private companies being so desperate to win that they are happy to pay big subsidies to the Government. The fact that GNER and National Express had their problems is no reflection on 2014 - before anyone goes down that path.
Anyhow, with IEP already on the cards, and most of the timetable being organised by the DfT, I doubt that there'll be much difference between any of the bidders other than the colour of the trains.
With IEP on the cards, it'll certainly give plenty of ammunition to anybody saying that this new franchisee is paying the government less than DOR.
I'm sorry but I cannot take anyone seriously who uses terms such as "Worst Group" and "Crapital Connect"
STEVIEBOY1
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It's a shame they can't leave EC as it is now!
I used the like the old GNER, MML & Anglia when they first came in after privatisation.
I used the like the old GNER, MML & Anglia when they first came in after privatisation.
Aictos
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I'm sorry but Virgin is NOT the best Intercity operator in the country no matter how much spin people swallow hook, line and sinker.
That goes to Directly Operated Railways own East Coast who have proved that being state managed actually performs better then privatised rivals like Virgin, Stagecoach and First including iirc returning more money to the government then the others.
First have done well managing both Great Western and Transpennine Express considering how they need more trains but had to struggle on what they had, 180s returning to GW has allowed Thames Valley services to be strengthened by using up freed up Networkers as to TPE the addition of the 350/4s has allowed the 185s to be used to strengthen TPE services.
As to Capital Connect well it took 8 years but that was not surprising considering it had 5 MDs in such a short period of time all had their own style of management but was slowly improving.
If First did win it then it would have been because it was considered the best for value bid not same as the best for business bid.
That goes to Directly Operated Railways own East Coast who have proved that being state managed actually performs better then privatised rivals like Virgin, Stagecoach and First including iirc returning more money to the government then the others.
First have done well managing both Great Western and Transpennine Express considering how they need more trains but had to struggle on what they had, 180s returning to GW has allowed Thames Valley services to be strengthened by using up freed up Networkers as to TPE the addition of the 350/4s has allowed the 185s to be used to strengthen TPE services.
As to Capital Connect well it took 8 years but that was not surprising considering it had 5 MDs in such a short period of time all had their own style of management but was slowly improving.
If First did win it then it would have been because it was considered the best for value bid not same as the best for business bid.
Suraggu
Member
I agree Virgin are not the best Intercity operator, it seems to be the general consensus amongst most rail staff as well .
I sincerely doubt the DfT will allow someone to win by way of an apology, as all eyes will be on them after previous fiascos. This would be a huge scandal.
If First wins, it will be because it put in the best bid. If it has offered the world, like previous bidders, then there's a risk of things going wrong - but I'd hope and pray the DfT will take this into account. If there's any evidence to suggest foul play, you can be sure Virgin will kick up a fuss, and the DfT would be insane to do it.
As for FCC.. well, I'm not seeing much in the way of improvements so far. In fact, even if there are many improvements to come - we've taken a massive step backwards in the last month as it appears that all the existing staff are being instructed to do things totally differently, and not to the benefit of anyone. Can't speak for TransPennine, but what exactly is wrong with FGW?
It's easy to look at things and come up with theories about why someone won this, and someone else won that.. but there are strict rules and I think people will need to find some good evidence before accusing the DfT of simply sitting in an office and deciding who they want to run this, and that, and then simply letting said bids win.
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swt_passenger
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I also noticed that the original poster of this thread is the same as that, and of the total of eight posts he's made so far, they are nearly all just pleas for inside info or rumours. Seems an odd sort of specialist interest...
SkinnyDave
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i think First would do a good job but I hope whoever wins it doesn't come in with all guns blazing to the team that have done a cracking job under the circumstances since 2009!
It is in my opinion the best intercity operator in the country and it would be s shame to see that deteriote
It is in my opinion the best intercity operator in the country and it would be s shame to see that deteriote
al.currie93
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Another great day for the railways A successful public body returning a premium to the government sold off cheap to meet a dogmatic need to help decent Tory chaps make more money. Pip Pip, pass the port old bean :cry:
Agreed...
Anyone willing to clarify what is meant by 'sold off cheap'? These franchises normally don't go cheap (lets not forget First West Coast were proposing to pay £1bn per year in the final years of their franchise).
I'm certainly not convinced that taking East Coast back into private hands is for the best as the current organisation is doing a good job and returning a nice little profit to the treasury but where has 'cheap' come from?
I'm certainly not convinced that taking East Coast back into private hands is for the best as the current organisation is doing a good job and returning a nice little profit to the treasury but where has 'cheap' come from?
It's a pretty easy franchise though. If the new trains turn out to be very reliable, I can't see how anyone can balls things up. Most delays would likely be down to the track/signalling/wires and the TOC would get paid out by Network Rail, so where's the risk?
Suraggu
Member
Don't forget bidders are buying East Coast as a company not as straight forward as a franchise.
sprinterguy
Established Member
No theyre not. Its a franchise, the same as any other.
Suraggu
Member
Did you miss that when the Government announced it. £20 million I believe as part of the franchise deal.
In RAIL magazine, it recently did a feature on Virgin. They followed a Pendolino set for a day. It covered two return journeys from Euston, one to Liverpool, one to Glasgow and a single journey to Manchester. Total patronage for the day was 4640. It doesn't take a genius to work out how good a revenue the major Intercity routes are. East coast revenues I would expect to be pretty similar to West Coast. Absolute cash cow franchises these.
WatcherZero
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Hes right because its directly operated and not franchised they cant just transfer the assets and contracts across like they do in refranchising (would be illegal state aid) so to get round that they will transfer them via selling shares with a value equal to the equity value of the company (how much cash and assets it has on hand minus debts) at a point just prior to transfer, this is called a Locked Box Mechanism this is expected to be around £20m. Once the locked box is enacted the franchise can only spend cash on essential needs and the Government will take any profit over the period.
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sprinterguy
Established Member
Oh, right. I stand corrected - apologies. 
3141
Established Member
Sold off cheap is a fashionable thing to say these days, even when the evidence shows that it isnt true, as youve pointed out.
The people who say that sort of thing apparently believe that everything is fixed in some underhand way. Im sure that does happen sometimes, but far less often in Britain than in many other places.
They also seem to think that a radical change in the way this country is run could magically reform all that and bring in complete honesty and transparency. The experience of radical changes in other countries shows they are likely to be wrong.
--- old post above --- --- new post below ---
Therefore companies are keen to bid for these AND to offer large sums for them - which in the case of two East Coast franchisees turned out to be a big mistake, and might have turned out that way for First as well if they'd actually got the West Coast two years ago. (I reckon one reason why Richard Branson got so worked up about First having put in a bigger bid than Virgin was that he knew he'd pushed the boat out a bit too far, in the hope of winning, and therefore First's bid was definitely over the top.)
BUT franchise contracts since 2006 have specified a low profit margin, usually 4% and sometimes less, with anything over that shared with the DfT. So even if the cash cow delivers, which in many cases it hasn't, the franchisee no longer makes a fortune.
gith
Member
It shouldn't really be being franchised anyway, it's a prime example of the fact that renationalisation works, and provides good service.
"With BR we were running a public service. Now it's privatised, we're running a business."
"With BR we were running a public service. Now it's privatised, we're running a business."
CockneySparrow
Member
Not exactly true, what about the branch lines that are or was and probably will again once we have gone full circle make a loss, the exception is the ECML as that's one of the prime routes
DarloRich
Veteran Member
It is sold on the cheap in my mind because the private company will take all the money and return very little to the government, despite what is published.
Lets not forget that EC paid the government £220m last year on a 4.5% passenger journey increase. Every penny of that goes to the government, not shareholders or covering group company accounting arrangements or fat cat bonuses that oddly wipe out most of the profit. They seem to be doing very well yet they have to be got rid of? Why is that? They are certainly doing better than the last, private, incumbent
How much did first or Virgin give back last year? It makes me sick to see this happen and people be more worried about the colour of the bloody train.
Lets not forget that EC paid the government £220m last year on a 4.5% passenger journey increase. Every penny of that goes to the government, not shareholders or covering group company accounting arrangements or fat cat bonuses that oddly wipe out most of the profit. They seem to be doing very well yet they have to be got rid of? Why is that? They are certainly doing better than the last, private, incumbent
How much did first or Virgin give back last year? It makes me sick to see this happen and people be more worried about the colour of the bloody train.
Tetchytyke
Veteran Member
I'm sorry but I cannot take anyone seriously who uses terms such as "Worst Group" and "Crapital Connect"
Pfft, I don't really care if you take me seriously or not.
TPE is appalling. Not just the overcrowding, but the cleanliness of the trains, the catering, the response when there are problems.
Capital Connect was appalling. Leaving passengers stuck in a tunnel in a sardine-packed commuter train for three hours just summed up the company and the halfwit senior managers they employed. As did the repeated industrial action, for that matter. The only problem with their health and safety prosecution- a prosecution that proved just how inept the whole operation was- was that the fines didn't come out of the paypacket of the MD.
FGW is just about OK if you're on a shiny HST- although the quality of their First Class provision is an insult- but if you're not you may as well forget it. Overcrowding, delays, tatty old trains, all things you can expect in the South West and on the Thames Turbo lines. It takes something to be so bad that you force your passengers to go on "fare strike" and get fined £29m by the Government for being incompetent.
Scotrail was OK, but given the amount of investment Transport Scotland pumped in it bloomin' well should be.
The West Coast franchise was, according to the RMT, based on service cuts and staffing cuts. Getting rid of the buffet catering was on the cards, apparently.
On both the buses and the trains, everything you see with First just looks and feels like amateur hour.
3141
Established Member
I don't see any strong reason to re-privatise East Coast. If something is working well there's a good case for leaving it alone. But I don't think we can easily compare East Coast being run by DOR in 2013-14 with National Express in 2008-09, because the overall economic situation then was much worse than it is today and that affected the number of journeys and therefore the revenue.
Do you have evidence that a private company won't pay the government the amounts it says it will in its bid?
--- old post above --- --- new post below ---
It's not really renationalised, either. It's a relatively small part of the railway system that been run by a government-owned company for the past few years. The government doesn't own the trains.
On the face of it "with BR we were running a public service", but we also had national rail strikes and I'm not sure how far all staff really acted as if "running a public service" was central to what they were doing.
"Running a business" has to be part of the approach. Otherwise there's little motivation for efficiency and a likelihood that the interests of the people who work there will come to take precedence over the passengers.
DarloRich
Veteran Member
That sounds exactly like a government minsters cop out
What should we use to compare then? How about the fact EC require less subsidy than all of the wonderfully efficient private companies?
Do they ever? How much did Virgin payback last year? How much did FGW or London Midland hand over?
East Coast is on target to return £1bn to the treasury. £1bn! Perhaps it is too good and is showing up the other operators for what they are.
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WatcherZero
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Its not as clear cut as that, East Coast benefitted from the investment made by its predecessor (3m extra seats and speed improvements kicked in from May 2011, altogether 13% increase in daily operated services) a tenfold increase in meal consumption and 21% increase in first class passengers by making meals complimentary to first class since 2010 (investment in catering facilties made by predecessor). It also cancelled planned route investment and fleet investment (five 180's and a Pendolino planned to be leased with accompanying increase in services were cancelled). It also started charging £5 per hour for the previously free wi-fi. Staffing has remained pretty consistent despite the Eureka timetable and increased management required from inhouse corporate functions staff have only gone from 2700 to 2900. (as a Comparison Abellio Scotrail say the extra services they plan will increase their Glasgow HQ staff alone from 100 to 150 nevermind other staff)
Since 2010 passenger revenue has risen by £76m or 13% when inflation has been 16%, other income has fallen slighly over the period even before inflation. Operating profit has fallen slightly though its been quite erratic year on year.
Since 2010 passenger revenue has risen by £76m or 13% when inflation has been 16%, other income has fallen slighly over the period even before inflation. Operating profit has fallen slightly though its been quite erratic year on year.
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Their pricing policy is the thing I am most interested in, as with all such awards.
LNW-GW Joint
Veteran Member
East Coast has the cream of the inter-city routes, without having to run any regional/local services.
Virgin West Coast picked up the loss-making XC Birmingham-Scotland services, and FGW picked up the Thames Valley and Wessex locals, so there's no direct comparison.
YorkshireRider
Member
I'm lost? DOR took over EC in Nov 2009. It was DOR who launched the new timetable and the free meals/drinks were launched at the same time (May 2011). They provided all the investment in the catering (extra staff and re fitted kitchens). Then there was the huge back log in train maintenance that NX left which DOR had to deal with. Yes they cut back the Lincoln services, and cancelled the 180s but a Pendo was never in any previous plans. Some testing was done on the ECML but that is all. NXEC left a huge mess to clean up and DOR have done a pretty good job in doing it.
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