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Stagecoach disqualified from three franchise competitions

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ScotGG

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And the real losers if the legal actions continues (not arguing they are not in their right to do so) will be customers as improvements are delayed, having been delayed already.

But we can't let Grayling and the DfT make mistake after mistake.

If this gets the failed franchise model out for good then welcome with something better whether it be devolution, concessions or a radically reformed franchise system. It will hamper improvements that are badly needed at franchises such as Southeastern but the DfT have done a good enough job stopping that anyway for years. What chance they wouldn't cock it up again?
 
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RailUK Forums

LOL The Irony

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If this gets the failed franchise model out for good then welcome with something better whether it be devolution, concessions or a radically reformed franchise system. It will hamper improvements that are badly needed at franchises such as Southeastern but the DfT have done a good enough job stopping that anyway for years. What chance they wouldn't cock it up again?
If we're going to go through all that effort, we may as well put that effort into nationalisation. Then we need to reform the DafT.
 

cactustwirly

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If we're going to go through all that effort, we may as well put that effort into nationalisation. Then we need to reform the DafT.

Nationalisation won't solve anything, you'll end up with a big dinosaur like DB, or even worse SNCF
But Grayling needs to go
 

Wolfie

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And the real losers if the legal actions continues (not arguing they are not in their right to do so) will be customers as improvements are delayed, having been delayed already.
... and, if DfT's recent track record is anything to go by, the taxpayer...
 

Wolfie

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If they want to do that it isn't really the UK's problem. Arguably we should load Abellio up with high-risk, low-pay franchises if they'll take them and take full advantage of the subsidy being chucked over from a different country.
Except Abelio UK or whatever it is called will be a limited company which can't lose more than its bond commitments and most likely each franchise is operated by a separate limited company. Previous defaults have shown that you can't go after parent companies if your contract is with the subsidiary..
 

Glenn1969

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The City AM piece does not say the injunction attempt has been rejected. It actually says Stagecoach are continuing with litigation and Grayling may have to take the stand in court to defend his department's actiona?
 

Wolfie

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The City AM piece does not say the injunction attempt has been rejected. It actually says Stagecoach are continuing with litigation and Grayling may have to take the stand in court to defend his department's actiona?
Seeing Grayling quizzed by a good QC would be bloody good entertainment! Certainly he won't get away with the usual politicians trick of dodging the question.. I may try to get to that...
DfT's disclosure will also be VERY interesting.. Embarrassment is no reason not to disclose...
I imagine, given what has come out courtesy of the NAO about the ferry fiasco, the Permanent Secretary would also be called to testify.
 

The Ham

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If we're going to go through all that effort, we may as well put that effort into nationalisation. Then we need to reform the DafT.

Right, so the government is the problem with franchising, so we'll give the government total control of the railways. There's some logic in there somewhere, but I fear that trying to fix franchises by nationalisation could well be throwing the baby out with the bath water.

Does the franchise system need fixing? Yes.

Does it result in the level of change required by passengers? No.

Does Nationalisation guarantee to fix this? No.
 

whhistle

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Not sure why people aren't too angry with Stagecoach with this.
I appreciate a lot of people like them as a company and I accept people seem to like their toy-town-like colours (not sure why :s), but surely this action threatening delay is only going to hurt passengers?

Stagecoach knew the franchise system was broken and they took a risk sticking a bid in.
Then cry when it didn't go their way?
Because if the government have to end up paying money - that's our tax money.

Read something else yesterday where a company didn't win something so are suing (possibly 5G rollout?).
Seems to be the new thing. Don't win = law suit.
Maybe football should start with this stuff too!
 

LOL The Irony

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Right, so the government is the problem with franchising, so we'll give the government total control of the railways. There's some logic in there somewhere, but I fear that trying to fix franchises by nationalisation could well be throwing the baby out with the bath water.

Does the franchise system need fixing? Yes.

Does it result in the level of change required by passengers? No.

Does Nationalisation guarantee to fix this? No.
You obviously ignored the final little bit on the end there, either accidentally or wilfully.
 

Wolfie

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Not sure why people aren't too angry with Stagecoach with this.
I appreciate a lot of people like them as a company and I accept people seem to like their toy-town-like colours (not sure why :s), but surely this action threatening delay is only going to hurt passengers?

Stagecoach knew the franchise system was broken and they took a risk sticking a bid in.
Then cry when it didn't go their way?
Because if the government have to end up paying money - that's our tax money.

Read something else yesterday where a company didn't win something so are suing (possibly 5G rollout?).
Seems to be the new thing. Don't win = law suit.
Maybe football should start with this stuff too!
Basically because public bodies have a duty to act fairly and reasonably and can be held to account if they don't. DfT have a serious and growing track record of being found guilty of failing to do so.
 

HH

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The City AM piece does not say the injunction attempt has been rejected. It actually says Stagecoach are continuing with litigation and Grayling may have to take the stand in court to defend his department's actiona?
The legal action might continue, but it will have to be for damages, as their injunction did not succeed. Abellio will be taking over the Franchise. I guess Stagecoach could appeal...
 

Wolfie

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The legal action might continue, but it will have to be for damages, as their injunction did not succeed. Abellio will be taking over the Franchise. I guess Stagecoach could appeal...
If they win the litigation they potentially make all of the profit they would have made on the contract without the grief of actually having to do so - doubt that they will appeal!
 

LNW-GW Joint

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The legal action might continue, but it will have to be for damages, as their injunction did not succeed. Abellio will be taking over the Franchise. I guess Stagecoach could appeal...

My recollection is that DfT signed the West Coast franchise agreement with First Group in 2012.
It didn't stop the whole thing being abandoned several weeks later when the Virgin case reached court.
I'm not saying that will happen this time, DfT do seem sure of their ground.
In any case, I think Stagecoach is keener to be reinstated for West Coast/South Eastern than it is to battle for East Midlands.
 

Wolfie

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My recollection is that DfT signed the West Coast franchise agreement with First Group in 2012.
It didn't stop the whole thing being abandoned several weeks later when the Virgin case reached court.
I'm not saying that will happen this time, DfT do seem sure of their ground.
In any case, I think Stagecoach is keener to be reinstated for West Coast/South Eastern than it is to battle for East Midlands.
It won't stop them pocketing the compo though..
 

HH

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My recollection is that DfT signed the West Coast franchise agreement with First Group in 2012.
It didn't stop the whole thing being abandoned several weeks later when the Virgin case reached court.
I'm not saying that will happen this time, DfT do seem sure of their ground.
In any case, I think Stagecoach is keener to be reinstated for West Coast/South Eastern than it is to battle for East Midlands.
Stagecoach may be suffering from hubris; from what I hear they are pricing themselves out of winning anything. They won't pass the VfM test and so DfT would use OLR instead. OFC if DfT feel they are going to lose litigation, anything is possible. Grayling certainly has form.
 

Wolfie

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Stagecoach may be suffering from hubris; from what I hear they are pricing themselves out of winning anything. They won't pass the VfM test and so DfT would use OLR instead. OFC if DfT feel they are going to lose litigation, anything is possible. Grayling certainly has form.
Failing couldn't run a bath!
 

3141

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My recollection is that DfT signed the West Coast franchise agreement with First Group in 2012.
It didn't stop the whole thing being abandoned several weeks later when the Virgin case reached court.
I'm not saying that will happen this time, DfT do seem sure of their ground.
In any case, I think Stagecoach is keener to be reinstated for West Coast/South Eastern than it is to battle for East Midlands.

My recollection is that the DfT sent the contract to First to be signed.
During the standstill period, Virgin applied for a judicial review of the DfT's decision to award the franchise to First.
A judge set a date by when Virgin and the DfT should both submit relevant papers to the court. Two days before that date, the DfT threw in the towel saying it could not defend the case since it could not locate papers to support the decision it had reached over the franchise. It cancelled the award. The Virgin case didn't need to get to an actual hearing.
Either at that point, or possibly earlier, when Virgin applied for a judicial review, the DfT asked First to return the contract papers.
 

matt_world2004

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I don't see how Stagecoach will have a case unless they can prove they were treated unfairly compared to other operators.
 

Glenn1969

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Their case is that it is unfair for DfT to expect franchisees to stand the pension risk which "could" run into billions. Of course, if the railways are ever nationalised the Treasury will be expected to try and plug this black hole
 

matt_world2004

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Their case is that it is unfair for DfT to expect franchisees to stand the pension risk which "could" run into billions. Of course, if the railways are ever nationalised the Treasury will be expected to try and plug this black hole
I don't see how it in itself is unfair. It just means they will need to bid for a higher subsidy /lower franchise premiums to cover the possible risk that this could possibly cause
 

tbtc

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Stagecoach may be suffering from hubris; from what I hear they are pricing themselves out of winning anything. They won't pass the VfM test and so DfT would use OLR instead. OFC if DfT feel they are going to lose litigation, anything is possible. Grayling certainly has form.

Funny how quick things chance - was only a couple of years ago that Stagecoach were the baddies because they were deliberately bidding with high premiums/ low subsidies, on the basis that they'd win the tenders and then get the Government to bail them out after a couple of years when the "optimistic" bid was shown to make it impossible for them to operate (thus getting out of the onerous premiums due at the back end of franchises).

Now Stagecoach are the baddies for their conservative bids (rather than speculating too much in the hope of blowing the competition out of the water)?

They can't win...
 

HH

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Funny how quick things chance - was only a couple of years ago that Stagecoach were the baddies because they were deliberately bidding with high premiums/ low subsidies, on the basis that they'd win the tenders and then get the Government to bail them out after a couple of years when the "optimistic" bid was shown to make it impossible for them to operate (thus getting out of the onerous premiums due at the back end of franchises).

Now Stagecoach are the baddies for their conservative bids (rather than speculating too much in the hope of blowing the competition out of the water)?

They can't win...
They have won rather a lot in the past, both from exploiting contractual shortfalls and from a neverending franchise; I wouldn't feel too sorry for Brian and Ann.
 

whhistle

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Basically because public bodies have a duty to act fairly and reasonably and can be held to account if they don't. DfT have a serious and growing track record of being found guilty of failing to do so.
The NHS doesn't act fairly.
Different areas of the country have access to different treatments.

Award the franchises that are currently "to let" on the old system and start afresh with the new ones.
 

whhistle

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Now Stagecoach are the baddies for their conservative bids?
I haven't seen any sort of overview of what [Stagecoach] proposed.
It seems by judging their bid as "conservative", you have.
Would you mind sharing that information?
 

Mathew S

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The NHS doesn't act fairly.
Different areas of the country have access to different treatments.

Award the franchises that are currently "to let" on the old system and start afresh with the new ones.
The NHS isn't a single organisation though. Each individual NHS body has to act fairly, but since fair is largely subjective, and needs vary from place to place, the current system is always going to have different policies in different areas. The railways are the same: what's fair in south-east England commuter land could easily be totally unfair in the rural Highlands of Scotland.

As for your point about franchising, totally agree. Get the current ones out of the way, by granting lengthy direct awards if needs be, and then sort out a new, functioning, system.
 

whhistle

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Get the current ones out of the way, by granting lengthy direct awards if needs be, and then sort out a new, functioning, system.
Yes, lengthly direct awards that will do nothing to improve things for passengers.
Good approach :p
 
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