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InterCity East Coast: Doomed to Fail?

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fowler9

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The DFT are in breach of contract by not providing contracted infrastructure and I suspect that an agreement has been done between the DFT and VTEC in this scenario about ending the franchise early because the DFT know that

It does amuse me however that people will happily ignore one side actually breaching the franchise agreement and then hit out at a party who haven't even breached it yet.

Contracts work both ways. There's no hope that the DFT would be able to do what you asked as VTEC would point out in court that their bid was based on said infrastructure being provided which wasn't at which point the DFT would end up being the ones that would be paying compensation.

This is a pure DFT cock-up. If they had provided the infrastructure on time then VTEC would have no cards to play here and would have to suck it up or face breaching the contract and the penalties they would suffer from that. But since the DFT have made a cock up they've got an extremely weak hand.
You would thing Virgin, Stagecoach or both would come out and tell people rather than let the press run riot?
 
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F Great Eastern

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You would thing Virgin, Stagecoach or both would come out and tell people rather than let the press run riot?

Going to the press loudly and conducting the war there won't achieve anything, it will only create a them and us division between the company and the DFT which could come back to haunt them at a later date.

Far better strategy is to use this as leverage in the negotiations for what the DFT are going to offer VTEC to make up for the breach of contract and that appears to what has been done in this case.

If one side breaches a contract it gives the other side the upper hand.
 

TUC

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Too much competition on EC. Compare EC to WC:

EC
VTEC (All from KGX to Inverness)
GN (Far as Peterborough)
Hull Trains (Far as Hull)
Grand Central (Far as Bradford / Sunderland)
East Coast Rail (COMING SOON Far as Edinburgh)

WC
VTWC (All from EUS to Edinburgh)
LM ( Far as Liverpool)

So if we look at it, VTEC are having to compete for every route, except the KGX to Inverness route, where as Virgin are only competing in reality, on EUS to BHM, and EUS to LIV/CREWE... It is completly natrual given the circumstances that VTEC does worse than VTWC.
Not too much competition at all. It's competition that has produced services to Hull, Halifax and Teeside that BR had failed to provide and it's the reason that east coast fares are much lower than the west coast (where the government had deliberately limited competition). It's for bidders like Stagecoach to take the competition into account when bidding.
 

cjmillsnun

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Though the Class 91s were in need of a mechanical overhaul only ten years into their working lives.
That’s standard for most locos. They require this thing called maintenance. The skodas needed overhaul when they transferred to the GEML.

I’m sure the 87s had been overhauled more than once.
 

FQTV

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The DFT are in breach of contract by not providing contracted infrastructure and I suspect that an agreement has been done between the DFT and VTEC in this scenario about ending the franchise early because the DFT know that

It does amuse me however that people will happily ignore one side actually breaching the franchise agreement and then hit out at a party who haven't even breached it yet.

Contracts work both ways. There's no hope that the DFT would be able to do what you asked as VTEC would point out in court that their bid was based on said infrastructure being provided which wasn't at which point the DFT would end up being the ones that would be paying compensation.

This is a pure DFT cock-up. If they had provided the infrastructure on time then VTEC would have no cards to play here and would have to suck it up or face breaching the contract and the penalties they would suffer from that. But since the DFT have made a cock up they've got an extremely weak hand.

I'm aware that this has been asked in at least one other thread, but I don't think that it has been satisfactorily (if at all) answered there, either.

So, my question is: exactly what has Network Rail or the Department for Transport not yet delivered that has had such a catastrophic effect on Virgin Trains East Coast's reported revenues to date?

There seems to be a pervading and happy (for the operator) conflation between 'commitments' not yet delivered on-time, and the incumbent's hapless handling of the operation of a strategic part of the country's transport network over a three year period.
 
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tbtc

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I find it impossible to believe with the price of anytime fares and the amount of business travel the ECML must generate, that it can't be a profitable franchise

It is profitable - Stagecoach were paying £272m/ year in premium to the Treasury (over £50m/ year more than DOR paid) - it's just a question of whether a TOC can predict revenues/ costs over the next eight years, given how much of ECML demand is "discretionary".

Please feel free to correct me because I am really just guessing and the cost of winning the franchise my be a lot less than the WCML but the WCML has got faster and the ECML serves a much less densely populated area.

I think that this is a lot to do with it. Not a lot of population density through the bits of Lincolnshire/ Nottinghamshire/ North Yorkshire etc that the ECML serves. Not a lot of big cities with significant commuter flows (e.g. Edinburgh and Newcastle are large, but the number who commute between them can't be massive).

Most franchises can rely on fairly dependable numbers of season ticket passengers between large places. But there's nowhere particularly large in the first hundred miles north of Kings Cross, so doesn't have the big season ticket market that other InterCity TOCs can rely upon.

You could argue that GWR's bread and butter is the Oxford - Reading - London route, plenty of season ticket holders, so you can base plans upon future income. If discretionary leisure travel (e.g. summer holidays to Cornwall) are down one year) then that's not going to be such a big drag on your income/ profits.

As Chief Planner has pointed out, the ECML hasn't got as solid a commuter base, so discretionary travel has a much bigger effect upon it. Which means you have to fight for your passengers, and means that you are more at the mercy of events outside your control.

You've also got Open Access undercutting you, and you don't know how many paths they'll get in future years (but you have to make bits based on predicting what'll happen in "year eight").

The DFT are in breach of contract by not providing contracted infrastructure and I suspect that an agreement has been done between the DFT and VTEC in this scenario about ending the franchise early because the DFT know that

It does amuse me however that people will happily ignore one side actually breaching the franchise agreement and then hit out at a party who haven't even breached it yet.

Contracts work both ways. There's no hope that the DFT would be able to do what you asked as VTEC would point out in court that their bid was based on said infrastructure being provided which wasn't at which point the DFT would end up being the ones that would be paying compensation.

This is a pure DFT cock-up. If they had provided the infrastructure on time then VTEC would have no cards to play here and would have to suck it up or face breaching the contract and the penalties they would suffer from that. But since the DFT have made a cock up they've got an extremely weak hand.

YES!

If the Government had a good case then they'd not have rolled over and let Stagecoach leave the contract early.

If the Government had delivered their side of the bargain then this wouldn't be an issue.

This is the Government that people want to take complete control over the railway...

Not too much competition at all. It's competition that has produced services to Hull, Halifax and Teeside that BR had failed to provide and it's the reason that east coast fares are much lower than the west coast (where the government had deliberately limited competition). It's for bidders like Stagecoach to take the competition into account when bidding.

True.

But the competition that means lower fares is also the reason why the TOC struggles to predict/ deliver sufficient premium/ profits. We have to be careful what we wish for - do we want the ECML TOC to be delivering large premiums to the Government (that can be used to subsidise provincial branch lines) or do we want them to offer cheap fares (with the money for unprofitable routes coming from... somewhere else)? A little from column A and a little from column B?
 

D365

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That’s standard for most locos. They require this thing called maintenance. The skodas needed overhaul when they transferred to the GEML.

Used the wrong terminology, off the top of my head they needed a not insignificant number of modifications to address poor component reliability.
 

WatcherZero

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To adress a few points, they bid on an average revenue growth of around 5% geared towards the end (which includes new routes, population growth and developing existing market demand by increasing capacity to allow lower fares) theyve actually achieved around 3% growth. The lower fares didnt really increase demand much and the extra capacity and new destinationswas To come towards the end of the decade but has been delayed by NR projects running late/deferred.

They paid less premiums than East Coast in the first year to reflect the private investment then they increased past the East Coast level. Generally the government values private investment around the same in financial terms as premiums in the first couple of years but does seem to prefer cash over investment in the long term, perhaps as they are more interested in preserving the departments cash flow rather than passenger benefits.
 

DenmarkRail

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The reason that east coast fares are much lower than the west coast (where the government had deliberately limited competition).

Yes, but as a business, would you rather 5 people pay £5 or 1 person pay £35? You have to look at the Price elasticity of demand - lowering prices won't always generate more demand.
 

Starmill

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I don't see how they can blame terrorism or Brexit. Neither has had any marked effect on the economy or more specifically, Rail travel.
What gave you that idea?

lower fares didnt really increase demand much
Perhaps they ought not to have gone on such a rampage of increasing fares then :p

My personal view is that their marketing, which is mostly complete bunkum, turns too many people off when their service delivery is so poor. The gap between expectations and reality has increased - even if performance hasn't changed - and people do not forgive that multiple times. I also think that they damaged customer loyalty by binning rewards on day one rather than consulting on changes to the scheme.

They are still making these mistakes. Their train refurbishment programme ran very late and they ignored a number of other things that they posted in their press release on the day they won the franchise such as being awarded nectar points on foodbar purchases.

Has their stock become less reliable as a result of being more intensively worked too?
 
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Starmill

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(e.g. Edinburgh and Newcastle are large, but the number who commute between them can't be massive).
I think this is another key point. Leeds is by far the most economically significant destination on the route between London and Newcastle, and they make relatively little of it. They are happy to cancel a train with no replacement seeing the service drop to hourly. The Sunday and Bank Holiday service is still not half hourly and probably can't be because those paths have been used for trains towards Newcastle. Leeds services are cut quickly during disruption and engineering work and the half-hourly Saturday service has only recently materialised. Leeds always feels a bit secondary to their consideration, when it is far, far more significant in terms of population and economy than anywhere else between there and London.
 

Starmill

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You could argue that GWR's bread and butter is the Oxford - Reading - London route, plenty of season ticket holders, so you can base plans upon future income. If discretionary leisure travel (e.g. summer holidays to Cornwall) are down one year) then that's not going to be such a big drag on your income/ profits.
Season tickets only make up 14% of tickets on GWR - although I don't think that's by value and I'm not sure if that data is made public.
 

DarloRich

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A lot of stuff and nonsense written in this thread!

So I've been thinking about this lately, and me and my friend have come to agree that it seems the InterCity East Coast franchise is cursed. So far, in the 21 years it has existed, only one operator has managed to operate their full original term, which was GNER from April 1996 until March 2005. But since then, every new private operator on the line has failed to run it to expectations. GNER won in 2005, but Sea Containers then went bankrupt in December 2007, and then National Express took over, only to fail again less than two years later in November 2009.

Now after running the line for not three years, Virgin Trains East Coast have had the franchise shortened by three years due to losses on the franchise. By contrast, Virgin Trains have kept the InterCity West Coast franchise since it was first won in 1997, albeit with almost losing it in 2012. But then wasn't part of Virgin's argument to keep the franchise being that other operators on East Coast failed twice? Quite ironic now even though VTEC is only really Virgin in it's name, but if Richard Branson likes to show off "his" new Azuma trains you can bet he's a bit guttered about it.

It seems that since GNER's second win the only operator that did well on the line was East Coast when it was in public ownership, returning £1 billion back to the treasury. So much for being the operator of last resort. But according to railway historian, Christian Wolmar (at 4:05) East Coast is a relatively simple franchise to run. If it's so simple though, why did private operators fail two consecutive times in about three years despite the private operator being superior (according to the majority of the Conservatives at least)?

I know this sounds a bit more like a privatisation rant, but I am genuinely concerned about the fact that the East Coast Main Line has suffered several times with operators who have consistently failed to meet the original expectations since 2005. What is it about the franchise that just makes things so hard for the private operators to meet their original standards? Is it just doomed to fail or has it just been poor management? If it's the latter then some people need sacking by the looks of it.

It is not cursed. The government have accepted bids ( at least 3 times now) that they must know to be almost impossible to achieve and the contractors have bid knowing that if they win and then fail to deliver they will always have a get out of jail card.

About 90% of the business is optional (very little regular commuter flows - though there are some) , heavily skewed to the London (and SE) market - especially leisure. Open Access competition.

Being a 200 -400 mile service pattern , and despite a modest number of trains , (but still way more than BR ran) , tricky to achieve PPM targts as even 4 late trains a day , puncture the planned targets.

Prone to catastrophic line of route incidents.

Finally - IEP will probably double the operating costs.

Correct.

VTEC hasn't handed in the keys yet - and although terrorism and Brexit are listed as the reasons for the losses, you can be sure that NR delivery delays have something to do with it.

that is what is known in the trade as a convenient excuse aka bull.

The biggest thing however I think is Open Access operators as because in 1996 GNER had a monopoly on a lot of services but since then it is no longer the main operator for services to Sunderland, Hull and Bradford and its lost its monopoly on the very lucrative services to Doncaster and York.

Too much competition on EC. Compare EC to WC:

EC
VTEC (All from KGX to Inverness)
GN (Far as Peterborough)
Hull Trains (Far as Hull)
Grand Central (Far as Bradford / Sunderland)
East Coast Rail (COMING SOON Far as Edinburgh)

WC
VTWC (All from EUS to Edinburgh)
LM ( Far as Liverpool)

So if we look at it, VTEC are having to compete for every route, except the KGX to Inverness route, where as Virgin are only competing in reality, on EUS to BHM, and EUS to LIV/CREWE... It is completly natrual given the circumstances that VTEC does worse than VTWC.

Didums - Don't give me that. That was one of the key lies ( sorry drivers) behind privitisation. I know Tory fan boys try to twist that the the competition being about winning a franchise ( even if the quotes at the time were very clear) but anyone with a brain knows what competition means. Business v business in a fight for trade. Surely that is the essence of the capitalist free market society in which we live.

Though the Class 91s were in need of a mechanical overhaul only ten years into their working lives.

Surely the standard cycle of vehicle maintenance?

I thought the "free market" was all about failures falling by the wayside..Clearly the current lot overbid to get the contract.
If they cannot meet their obligations, as soon as they fail in any part they should be in the same position as any one in breach of contract i e a forfeiture and claim for compensation by the DFT. it seems to me a deal has been done to cover up taking it back into public hands..

The free market only applies when the robber barons are winning. Odd how they run squealing for help when their profits fall. This is a shady back room deal designed to cover up failure, preserve rich mens winnings and prevent an admission from a government opposed ideologically to any form of public sector that, sometimes, private enterprise ain't best!

My impression from another thread is that VTEC would have had to live with the forecast shortfall but NR not delivering their side of the contract allowed VTEC to bring DfT to the table to renegotiate.

The DFT are in breach of contract by not providing contracted infrastructure and I suspect that an agreement has been done between the DFT and VTEC in this scenario about ending the franchise early because the DFT know that

It does amuse me however that people will happily ignore one side actually breaching the franchise agreement and then hit out at a party who haven't even breached it yet.

Contracts work both ways. There's no hope that the DFT would be able to do what you asked as VTEC would point out in court that their bid was based on said infrastructure being provided which wasn't at which point the DFT would end up being the ones that would be paying compensation.

This is a pure DFT cock-up. If they had provided the infrastructure on time then VTEC would have no cards to play here and would have to suck it up or face breaching the contract and the penalties they would suffer from that. But since the DFT have made a cock up they've got an extremely weak hand.

They do - however there are a couple of problems:

The government agrees the hand at the start of the game. Sadly they look at all the cards and then give the best ones to their chums. Even if the government do win the hand they then let the contractor spread the payments with most of the money not coming until well after the game is finished! ( There is a perception among many that the contracts are weighted in favour of the contractor)

The wounded party controls ( in part or full) when the maintainer can get access to the infrastructure

Going to the press loudly and conducting the war there won't achieve anything, it will only create a them and us division between the company and the DFT which could come back to haunt them at a later date.

Far better strategy is to use this as leverage in the negotiations for what the DFT are going to offer VTEC to make up for the breach of contract and that appears to what has been done in this case.

If one side breaches a contract it gives the other side the upper hand.

One hopes the contractual weight is even. I doubt it is. it seems from the outside that when the government fails the contractor walks away with lots of compensation. When the contractor fails they have to buy the transport minister a coffee. He didn't even hold out for cake with the coffee........................

I think this is another key point. Leeds is by far the most economically significant destination on the route between London and Newcastle, and they make relatively little of it. They are happy to cancel a train with no replacement seeing the service drop to hourly. The Sunday and Bank Holiday service is still not half hourly and probably can't be because those paths have been used for trains towards Newcastle. Leeds services are cut quickly during disruption and engineering work and the half-hourly Saturday service has only recently materialised. Leeds always feels a bit secondary to their consideration, when it is far, far more significant in terms of population and economy than anywhere else between there and London.

However at times of disruption the hourly service covers the demand between Leeds and Doncaster allowing the reduced capacity on the line to be used to ensure nowhere loses a service completely.

I bet it also allows VTEC to hold their recovery plan together by ensuring trains and staff are spread out enough to cover their proper working when things get back to normal.
 
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Fleetwood Boy

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Whilst not a direct comparison, isn't Leeds sort of the ECML equivalent to Birmingham? (Yes, I know its further away from London and smaller* - but you get the idea). Which makes you wonder if the potential of Leeds services is being diluted by too much emphasis on Newcastle and points north thereof? Its interesting that London - Edinburgh is now generally 2tph with more to come through Open Access, whereas London - Glasgow is a solid 1tph (and probably doesn't merit anything more to be honest)?

* Although if you look at Birmingham+Coventry+Wolverhampton and compare with Leeds+Bradford+Wakefield there's not that much in it
 

ainsworth74

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Has their stock become less reliable as a result of being more intensively worked too?

From what I've heard that's correct. The fleet being worked harder also means that there is less stock that can be pressed into service. This is particularly the case on weekends. I recall being told by an informed source that they were concerned by the extra services on, I think a Saturday, as it meant that an HST that was usually spare was now diagrammed to be in use. This HST until then was regularly being used to cover for broken down electric sets.

So a better timetable for passengers but a much more fragile timetable as the stock gets older and is worked harder and harder (probably safe to say that the 225s are being worked harder than at any time in their life) with less down time to rectify faults.
 

DarloRich

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So a better timetable for passengers but a much more fragile timetable as the stock gets older and is worked harder and harder (probably safe to say that the 225s are being worked harder than at any time in their life) with less down time to rectify faults.

As you say it isnt the harder working per se that is a problem but the lack of down time to fix the problems generated by working that older stock harder. The old bath tub curve strikes again!
 

gavin

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A long article from Sir Richard Branson on recent stories in the media

The partnership of Stagecoach and Virgin did agree to pay £3.3bn to the Government over the eight year franchise, which was originally due to run until 2023. However that bid was based on a number of key assumptions and a promise of a huge upgrade of the infrastructure by Network Rail that would have improved the reliability of the track and allowed us to run more trains and carry many more passengers than we do today. The considerable delays to this upgrade, to new trains, as well as poor track reliability will cost us significant lost revenue (amounting to hundreds of millions of pounds) and torpedoed the assumptions of our original bid. As the facts became clear about these issues – (as well as a drop in Britain’s GDP growth) - a discussion with Government had to take place and a pragmatic solution was needed to keep delivering improvements and investment in the line.

https://www.virgin.com/richard-branson/clarity-virgin-trains-east-coast-media-reporting
 

ainsworth74

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As expected really. Love them or loathe them (and I certainly fall into the latter category) VTEC have been torpedoed by a number of things outside of their control and the assumptions that were made on their bid have clearly fallen apart with the increasing unreliability of the ECML infrastructure (worse than I can recall it being ever), the delays to various upgrade and the trains all mean that it was always going to go horribly wrong if there wasn't some sort of renegotiation.

Still it would have been fun if the Government had dug their heels in and got taken to court for breach of contract :lol:
 

B&I

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I'm aware that this has been asked in at least one other thread, but I don't think that it has been satisfactorily (if at all) answered there, either.

So, my question is: exactly what has Network Rail or the Department for Transport not yet delivered that has had such a catastrophic effect on Virgin Trains East Coast's reported revenues to date?

There seems to be a pervading and happy (for the operator) conflation between 'commitments' not yet delivered on-time, and the incumbent's hapless handling of the operation of a strategic part of the country's transport network over a three year period.


I was wondering who'd be the first to ask that.
 

F Great Eastern

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As expected really. Love them or loathe them (and I certainly fall into the latter category) VTEC have been torpedoed by a number of things outside of their control and the assumptions that were made on their bid have clearly fallen apart with the increasing unreliability of the ECML infrastructure (worse than I can recall it being ever), the delays to various upgrade and the trains all mean that it was always going to go horribly wrong if there wasn't some sort of renegotiation.

Still it would have been fun if the Government had dug their heels in and got taken to court for breach of contract :lol:

I don't like them either, I don't like Virgin as a brand and I don't like Richard Branson, so it's with a very very deep breath I mutter words I never thought I would - I completely agree with the quoted message from him!

The Government had to do a deal with VTEC because if they didn't then there would have been a chance that VTEC would take them to court and look to recoup lost revenue by the breach in the DFT side of the VTEC franchise agreement. This gave the DFT a weak hand and it's all their own fault.

One might suggest that in future the DFT might want to consider inserting contractual terms of what would happen and compensation to the operator that should be paid should the promised infrastructure not be in place to cover their own backs.
 

DarloRich

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As expected really. Love them or loathe them (and I certainly fall into the latter category) VTEC have been torpedoed by a number of things outside of their control and the assumptions that were made on their bid have clearly fallen apart with the increasing unreliability of the ECML infrastructure (worse than I can recall it being ever), the delays to various upgrade and the trains all mean that it was always going to go horribly wrong if there wasn't some sort of renegotiation.

Still it would have been fun if the Government had dug their heels in and got taken to court for breach of contract :lol:

but if i, entirely for reasons outside of my control, make a mistake on my assumptions of being able to pay my mortgage my home is repossessed. Virgin/Stagecoach make a mistake and get a bail out.

I don't like them either, I don't like Virgin as a brand and I don't like Richard Branson, so it's with a very very deep breath I mutter words I never thought I would - I completely agree with the quoted message from him!

The Government had to do a deal with VTEC because if they didn't then there would have been a chance that VTEC would take them to court and look to recoup lost revenue by the breach in the DFT side of the VTEC franchise agreement. This gave the DFT a weak hand and it's all their own fault.

One might suggest that in future the DFT might want to consider inserting contractual terms of what would happen and compensation to the operator that should be paid should the promised infrastructure not be in place to cover their own backs.

Indeed - however i ask why they are reluctant to do so or hold the franchisees to account.
 

F Great Eastern

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but if i, entirely for reasons outside of my control, make a mistake on my assumptions of being able to pay my mortgage my home is repossessed. Virgin/Stagecoach make a mistake and get a bail out.
The fact that it's outside the control of VTEC is not the issue here - the fact that the DFT have breached a term of the contract that impairs the ability of the TOC to return contracted payments is.

Comparing it with a mortgage is like apples and oranges, because excuse me if I'm wrong, but the bank who you signed the mortgage with wouldn't be breaking a contract and they also wouldn't be the people who have impaired your ability to repay your mortgage by their own actions.

If this went to court VTEC would win easily - and the DFT is keen to avoid that for obvious reasons, no matter how various parties try and portray it and how much of this is either deliberately misreported in the media or reported incorrectly through a lack of knowledge of the matter at hand.

I'm no lover of Branson - I would be delighted to see someone else running the EC/WC than them. But they're being scapegoated here for a DFT issue.
Indeed - however i ask why they are reluctant to do so or hold the franchisees to account.

I doubt GWR would agree with you since they were forced to fund a £29m remedial plan.
 
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gswindale

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but if i, entirely for reasons outside of my control, make a mistake on my assumptions of being able to pay my mortgage my home is repossessed. Virgin/Stagecoach make a mistake and get a bail out.
If, you, entirely for reasons outside of your control, make a mistake and your assumptions of being able to pay your mortgage/rent and contact your lender/landlord, then normally an agreement can be reached.

In the case of a home owner there isn't usually anything in your mortgage contract that relates to services to be carried out by the lender, which makes the comparison a little bit weak.

If you're renting, then the Landlord will have certain responsibilities, which if not carried out, could affect your ability to pay and hence you would re-negotiate the contract in that situation.
 

DarloRich

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The fact that it's outside the control of VTEC is not the issue here - the fact that the DFT have breached a term of the contract that impairs the ability of the TOC to return contracted payments is.

Comparing it with a mortgage is like apples and oranges, because excuse me if I'm wrong, but the bank who you signed the mortgage with wouldn't be breaking a contract and they also wouldn't be the people who have impaired your ability to repay your mortgage by their own actions.

The sad thing is the power ALWAYS seems to be with the franchisee. Why cant the government agree better or fairer terms? Why is that we as tax payers always have to bail out these people? It is a shame that us mere tax payers ( who fund all this) don't get to see the details on which this contract is alleged to fail. Show us why this deal is value for money. Until we do see this information I ( and many others) will believe it is all a scam perpetrated by a government more interested in keeping their chums sweet and preserving a failed operational model rather than getting the best deal for us poor saps or admitting a mistake.

I doubt GWR would agree with you since they were forced to fund a £29 remedial plan.

wow £29. ;)

If, you, entirely for reasons outside of your control, make a mistake and your assumptions of being able to pay your mortgage/rent and contact your lender/landlord, then normally an agreement can be reached.

In the case of a home owner there isn't usually anything in your mortgage contract that relates to services to be carried out by the lender, which makes the comparison a little bit weak.

If you're renting, then the Landlord will have certain responsibilities, which if not carried out, could affect your ability to pay and hence you would re-negotiate the contract in that situation.

thats funny! When I asked the bank for help they screwed me. You are worse than excrement to them.

Not billionaire transport moguls mind. They get a nice backhander from their governmental chums. It makes me a touch angry.
 
Last edited:

coppercapped

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I'm aware that this has been asked in at least one other thread, but I don't think that it has been satisfactorily (if at all) answered there, either.

So, my question is: exactly what has Network Rail or the Department for Transport not yet delivered that has had such a catastrophic effect on Virgin Trains East Coast's reported revenues to date?

There seems to be a pervading and happy (for the operator) conflation between 'commitments' not yet delivered on-time, and the incumbent's hapless handling of the operation of a strategic part of the country's transport network over a three year period.
Try my post in another thread.

It is clear there are two issues - and this has been clear for some time to those that watch such things closely, for example financial journalists. This thread is very late to the party.
 

DarloRich

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EDIT - I find it really hard to stomach another bail out when people are struggling to make ends meet and the government apparently cant afford to pay for enough operations in the NHS. It stinks. And you all know that.
 

Alan2603

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Whilst undoubtedly the DfT and/or Network Rail have not provided certain upgrades etc, Stagecoach/Virgin have been rather lacking in providing what they promised way back in 2014 when the franchise announcement was made:

In Stagecaoches 'PR' announcement of the franchise award a lot was promised on the ECML:

Stagecoach-Virgin company awarded InterCity East Coast rail franchise
27 Nov 2014

Stagecoach-Virgin company awarded InterCity East Coast rail franchise

  • £140m planned investment to deliver an improved service and more personalised travel
  • Over £25m planned spend in improving stations and car parking
  • New trains and faster more frequent services
  • Investment in staff with more training and new dedicated innovation council
  • New technology to improve customer experience on-board and at stations
Stagecoach Group ("Stagecoach") today (27 November 2014) welcomed the announcement by the Department for Transport ("DfT") of its intention to award the Inter City Railways ("ICR") venture with Virgin Group ("Virgin") the InterCity East Coast ("ICEC") rail franchise which will bring major benefits to passengers, taxpayers and employees.

Passengers can look forward to new services, faster and more frequent journeys whilst taxpayers will benefit from significant increases in premium payments to Government over the course of the eight year franchise.

The groups’ venture, ICR, will transform the customer experience for around 20 million journeys a year on one of the UK’s major inter-city rail routes, blending the experience, culture and service-focus of both Stagecoach and Virgin. Stagecoach holds 90% of the share capital of ICR and Virgin holds the remaining 10%.

The new franchise will start in March 2015 and is planned to run until 31 March 2023, with the option for a one-year extension at the DfT’s discretion. It includes a commitment to deliver £2.3bn* in real terms in premium payments to the Government between 2015 and 2023, providing a higher return to the taxpayer than under the current arrangements.

The franchise is set to see more than £140m invested in delivering an improved service and a more personalised travel experience for passengers. Trains will operate under the ‘Virgin Trains East Coast’ brand. Highlights for customers include:

  • Faster journey times – regular services to Leeds in two hours and Edinburgh in four hours
  • New trains – 65 new ‘Super Express’ trains from 2018 with an early multi-million-pound train refresh programme for existing fleet
  • Better connections – extra and new direct services to London from key locations in Scotland and England and more weekend services
  • More services – a 50% increase in capacity by 2020 with total fleet capacity increased by 12,200 seats
  • Better value fares – 10% cut in Standard Anytime fares on long-distance journeys to and from London and Stevenage
  • Investment in people – a fresh approach to recruitment, including new apprenticeships and the introduction of a new National Academy for Rail Professional Education with bases in York, Derby and London. Major investment in staff development and training, a new innovation council and giving employees ways to own a share of the business through employee share incentive arrangements
  • New technology – new website, smartphone apps, interactive touchscreen information points at major stations, portable technology for staff, free WiFi on trains and stations.
  • Personalised travel – journeys built around individual customers, with at-seat food ordering, simpler ticket purchase and reservations, new Nectar loyalty programme
  • Improved customer rights and support – new Passengers' Charter with easier and faster compensation for customers through automated delay repay service; commitment to improved satisfaction scores with new independent passenger surveys, benchmarks and published results to drive satisfaction with stations, trains and customer service; and a dedicated customer and communities improvement fund
  • Station enhancements – planned investment of over £25m in stations and car parks with new open plan customer zones introduced for combined ticket purchase and information, more car parking spaces, extra cycle facilities and improved security
  • Improved accessibility – investment in disability improvements, including induction loop and tactile station maps
  • Community engagement – apprenticeships for young people, graduate and ex-offenders programmes, dedicated communities fund, support for small businesses and regeneration in disadvantaged areas.
Martin Griffiths, Chief Executive of Stagecoach Group, said: “Passengers using the East Coast mainline will benefit from hundreds of millions of pounds of infrastructure investment and service improvements over the next decade. Together with Virgin, our innovative plans will give customers new services, faster and more frequent trains, and easier, more personalised journeys.

"We will be investing in the committed East Coast people who will be joining our team, as well as delivering major programmes to help young people, communities and small businesses along one of Britain's most important routes. We will match world-class customer service by giving a big boost to taxpayers with increased payments to Government."

Patrick McCall, Senior Partner, Virgin Group, said, "We’re delighted to have been chosen to run the East Coast franchise. Our long term partnership with Stagecoach has seen a revolution in customer service standards, great product innovation, reduced journey times and improved timetables on the West Coast mainline. We plan to deliver similar success on the East Coast and are looking forward to working with the team there to build on their achievements.

"Our partnership will concentrate on areas for which Virgin is famous, such as looking after our customers and our people. We have a great opportunity to blend the successes of the East Coast and the West Coast lines to create a great experience for all. Together with these new ideas and initiatives, passengers will begin to see those Virgin touches on each and every journey."

Detailed plans to transform services for InterCity East Coast passengers include:

New, improved trains and enhanced on board service

  • 65 new Super Express trains introduced from 2018 delivering a new standard of on-train service with free WiFi and at seat meals for all passengers
  • £13.4m planned spend in the first two years of the franchise to improve the existing train fleet. An initial deep clean of the entire fleet, with refurbished toilets, new carpets and seat covers, new and clearer on-train signage, plus other enhancements.
  • Faster, more reliable on-board WiFi and better mobile phone connections
  • "Luggage Hubs" providing an airline style approach with a secure storage area on long distance train services where customers can leave their bags during their journey.
  • More flexible reservation system allowing reservations to be made closer to departure to better suit customers who make last minute travel arrangements
  • Innovative new mobile app that allows customers to order a meal at their seat before or during their journey
  • Improved on-board service with additional presence in standard class and train-side to deliver a personalised and highly visible service.
  • New, improved on-train catering designed by local chefs with menu changed regularly to include seasonal events. Bean to cup coffee introduced and passengers able to claim Nectar points on all Foodbar purchases
Better journeys, extra services and improved punctuality

  • Additional and new direct services to London from Sunderland and Stirling within first year of new franchise (December 2015)
  • Extra weekday services between Edinburgh and London from May 2016 with half-hourly frequency for most of the day and an additional Sunday service
  • Vastly improved timetable introduced from May 2019 featuring faster services, new direct services and improved weekend services
    • Regular weekday services between Edinburgh and London in just 4 hours, calling only at Newcastle, a journey time improvement of around 20 minutes compared with most of the fastest trains today
    • Additional and faster services between Leeds and London, many with a journey time under or close to 2 hours, a journey time improvement of over 10 minutes compared with today
    • New direct weekday services between Middlesbrough and London for the first time in a generation
    • Two-hourly direct weekday services between Bradford, Harrogate, Lincoln and London
    • New direct weekday peak-time services between Huddersfield and London
    • Improved Saturday and Sunday timetables, with more trains and faster services between Leeds and London, faster journey times between Edinburgh, Newcastle and London, a two-hourly direct service between Harrogate and London, and a two-hourly direct service between Lincoln and London
  • More reliable trains, using our experience from East Midlands Trains, the UK’s most reliable long distance train operator
  • New integrated control centre launched with Network Rail to drive up performance
Station enhancements

Over £25m is set to be invested in station and car parking improvements to transform the end to end journey experience and provide a welcoming, modern and personalised service for customers:

  • Increased staff visibility in new customer friendly open plan areas for combined ticket purchase, information and assistance.
  • Free WiFi introduced at all InterCity East Coast stations
  • Over 500 additional car parking spaces
  • Investment in better station retail and waiting facilities
  • 50% increase in station cycling storage with three new secure cycle compounds and Brompton Dock Cycle Hire facilities
  • Upgrade of First Class lounges and the introduction of a new scheme allowing local businesses and community groups to use selected lounges free of charge during the evenings
  • First Lounge Hosts provided in the lounges at Kings Cross, Leeds, Edinburgh and Newcastle stations to provide a better level of service for customers
Accessibility, improved transport integration and sustainability measures

  • Investment in station accessibility improvements including induction loops, improved seating, handrails and tactile station maps
  • Introduction of a car-club and station car-sharing schemes with dedicated websites
  • Targeted 20% reduction in passenger and vehicle CO2 emissions and 22% reduction in water consumption
  • Installation of new energy efficient lighting at stations and in car parks
  • Carbon reduction plan with introduction of an eco-driving system, and improved metering and monitoring
Fares and ticketing

  • Standard Anytime fares on long-distance journeys to and from London and Stevenage reduced by 10% from May 2015
  • New booking tool launched to make it easier for customers to book the best value tickets and find the perfect seat to meet their needs
  • New partnership with Nectar, the UK's leading coalition loyalty scheme, allowing customers to collect points and also redeem them against their travel with ICEC, a rail industry first
Investment in people

  • Major investment in developing people skills and a commitment to achieving Investors in People Gold status.
  • New ‘Ideal Customer Experience’ development programme that will build on the great skills East Coast people already have and help drive customer service to new highs
  • Introducing a new National Academy for Rail Professional Education (NARPE) with bases in York, Derby and London
  • Industry leading package of rewards and benefits introduced for staff to improve life-style, health and well-being
  • New Innovation Council launched with a dedicated budget, with representation from front-line staff to evaluate, prioritise and develop ideas
  • A reinvigorated recognition programme that rewards people who go out of their way to help their customers
  • ‘Red Track’ Graduate Training Programme
Customer service initiatives and improvements

A new customer service strategy has been created to completely transform the passenger experience and is focussed on understanding the needs and wants of customers.

  • A new Passengers' Charter with easier and faster compensation for customers through automated delay repay service; commitment to improved satisfaction scores with new independent passenger surveys, benchmarks and published results to drive satisfaction with stations, trains and customer service; and a dedicated customer and communities improvement fund.
  • Dedicated Customer Experience Board with £1m annual budget to invest in customer service initiatives.
  • Introduction of 30 dual role Security and Revenue Officers who are also attested as special constables to provide safer travel for customers
Customer information

  • A new website and app offering real-time personalised travel information
  • New electronic information boards at stations with interactive touchscreens at key locations providing up-to-the minute information for customers including a map of station facilities, onward transport information and customer service contact information
  • New station customer action teams to help provide extra customer service during times of disruption
  • Investment in hand held smart technology for staff for better customer support and information provision
Community engagement and stakeholder relations

  • New apprenticeship schemes launched in partnership with local authorities targeting 16-24 year olds
  • New schools partnership to provide opportunities for young people and an extended range of traineeships for 16-17 year olds.
  • Job trials scheme offering opportunity for young and unemployed people on the East Coast route with a guaranteed job interview at the end
  • Unique partnership with Bad Boys Bakery to support ex offenders and prevent re-offending by getting people into good jobs.
  • New customer and communities fund to provide opportunities for commercial, local community and meeting spaces at stations
ENDS

http://www.stagecoach.com/media/news-releases/2014/2014-11-27.aspx



I don't think either side (DfT or VTEC) actually comes out smelling of roses in this one.
 

ChiefPlanner

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Not accusatory, just curious; why would this be? Do you mean the cost of leasing the trains will double?

Pretty much so - and the contract goes on for a very long time. Attempts by various people to work out the exact cost have been knocked back as " commercially confidential" - by , of course , the DfT ..
 
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