What is the state of trains when they go off lease?

Ken H · 21 Apr 2019

if you lease a car, when its lease period ends they expect it to have had the recommended services, that the bodywork is free from unrepaired damage and everything works, so it can go into the auction for reselling.
If defects are found then you get a fat bill.

So with trains, when they go back to the ROSCO, what is the deal? because we read of trains having to be brought back up to standard by the new owners to make them fit for use.

Are trains supposed to go off lease in good condition? and are TOC's getting away with chucking back trains in poor condition?

I know some trains have no chance of further work, like the Pacers which will (probably) be scrapped this year, so a special arrangement may be possible in such cases case.

Or am I being daft expecting train leasing being the same as car leasing?

(I was prompted to post this by comments on this forum about 319's having defects inherited from their Thameslink days)

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Brissle Girl · 21 Apr 2019

I don’t think you should be expecting anything. It’s a commercial contract and one for the ROSCOs and TOCs to decide between themselves what the contract says, how it is subsequently monitored, and any leeway given.

Shaw S Hunter · 21 Apr 2019

Experience suggests that any such return standards are very low. When LM received its 172s it released a large number of 150s to Northern. A good few of those vehicles needed replacement gearboxes and some of the disused middle cabs (150/2 vehicles) in LMs 3-car sets had to be completely rewired before they could return to their original purpose. OTOH the cabs that had been in use were in much better condition than was normal for Northern!

Gerald Fiennes · 22 Apr 2019

Leases will normally set out a 'redelivery condition', requiring the train to be broadly in the same condition as when it was taken on with some allowance for 'fair wear and tear', but TOCs negotiate what they are prepared to pay to cover these costs when they give up trains. In addition, most leases also require TOCs to pay into a fund for heavy maintenance work from which C6s etc. are paid for. However, like rental car companies, it's up to the ROSCOs what they do: they can keep the money at lease ends or put it back into the vehicles for the next lessee. There is also rarely time to fix older trains up as new would-be lessees want vehicles as quickly as possible, given the current overall level of fleet shortage and the fact that many cascades are delayed by new trains not coming into service on time.

route:oxford · 22 Apr 2019

Ken H said:
if you lease a car, when its lease period ends they expect it to have had the recommended services, that the bodywork is free from unrepaired damage and everything works, so it can go into the auction for reselling.
If defects are found then you get a fat bill.

It's not too dissimilar, but think of it on a grander scale with multiple leases.

So, when you lease a car, you tend just to have a single lease.

Go up to the next level and lease a bus. Well, you'll probably have at least four leases.

Bus
Tyres
Engine
Tachometer

Next one up is a train. More complicated still, and there'll be sub-leases.

Unit
Engine
Bogies/Tyres
TPWS & Network Rail equipment

Then you can add in anything else, air con equipment, hand driers in toilets, doors, seats - all potentially leased.

So when a unit goes back to the Rosco with filthy or damaged seats, that might not be their problem.

apinnard · 22 Apr 2019

When some of the 321s came back to Eversholt a number of years ago, I remember reading some of the handover reports. There were quite a few units with isolated traction motors due to one fault or another and seemingly lack of maintenance in the last few months of use by the then operator.

Western Lord · 22 Apr 2019

Nothing to do with trains, but one of the more amusing examples of lease conditions was in the late 1960s when Canadian Pacific Airlines leased one of its DC-8s to another airline for a few years (I can't remember which airline it was). The receiving airline was allowed to paint the aircraft in its own livery, but a condition of the lease was that it had to be repainted in the original Canadian Pacific livery when the lease was up. In the meantime Canadian Pacific rebranded itself as CPAir and introduced a striking new livery and fairly quickly repainted its fleet. When the DC-8 lease was up the aircraft was, in accordance with the terms of the lease, repainted in the old Canadian Pacific livery and handed back to its owners!

43096 · 22 Apr 2019

route:oxford said:
Next one up is a train. More complicated still, and there'll be sub-leases.

Unit
Engine
Bogies/Tyres
TPWS & Network Rail equipment

Then you can add in anything else, air con equipment, hand driers in toilets, doors, seats - all potentially leased.

So when a unit goes back to the Rosco with filthy or damaged seats, that might not be their problem.

It’s nothing like that complicated.

Journeyman · 23 Apr 2019

The TOC will deal with one leasing company, and it's up to that leasing company to decide how it sources engines, motors and other parts etc. Quite often these days this stuff is covered by Train Service Agreements that outsource all of that to the manufacturers.

From my recent experience with a Train Company That Shall Not Be Named that is replacing its entire fleet, the old stuff is expected to be returned in a functional and clean condition that makes it suitable for further use, even though most of it is expected to become bean cans and razor blades. Initial stock selected for return off-lease has been due major exams and went straight to the scrapyard. In theory it was functional and useable, but would have needed overhaul first.

anamyd · 22 May 2019

Western Lord said:
Nothing to do with trains, but one of the more amusing examples of lease conditions was in the late 1960s when Canadian Pacific Airlines leased one of its DC-8s to another airline for a few years (I can't remember which airline it was). The receiving airline was allowed to paint the aircraft in its own livery, but a condition of the lease was that it had to be repainted in the original Canadian Pacific livery when the lease was up. In the meantime Canadian Pacific rebranded itself as CPAir and introduced a striking new livery and fairly quickly repainted its fleet. When the DC-8 lease was up the aircraft was, in accordance with the terms of the lease, repainted in the old Canadian Pacific livery and handed back to its owners!

That's like First Great Western subleasing a train to another TOC in say 2014, and allowing that other TOC to repaint it in their own livery on the condition that it's painted back into FGW livery before being handed back to them in 2016, even though they rebranded as Geat Western Railway in 2015

cjmillsnun · 27 May 2019

route:oxford said:
It's not too dissimilar, but think of it on a grander scale with multiple leases.

So, when you lease a car, you tend just to have a single lease.

Go up to the next level and lease a bus. Well, you'll probably have at least four leases.

Bus
Tyres
Engine
Tachometer

Next one up is a train. More complicated still, and there'll be sub-leases.

Unit
Engine
Bogies/Tyres
TPWS & Network Rail equipment

Then you can add in anything else, air con equipment, hand driers in toilets, doors, seats - all potentially leased.

So when a unit goes back to the Rosco with filthy or damaged seats, that might not be their problem.

I assume you mean Tachograph. A tachometer is a rev counter.

DarloRich · 27 May 2019

route:oxford said:
It's not too dissimilar, but think of it on a grander scale with multiple leases.

So, when you lease a car, you tend just to have a single lease.

Go up to the next level and lease a bus. Well, you'll probably have at least four leases.

Bus
Tyres
Engine
Tachometer

Next one up is a train. More complicated still, and there'll be sub-leases.

Unit
Engine
Bogies/Tyres
TPWS & Network Rail equipment

Then you can add in anything else, air con equipment, hand driers in toilets, doors, seats - all potentially leased.

So when a unit goes back to the Rosco with filthy or damaged seats, that might not be their problem.

What are you basing this on? This is nothing like the reality.

route:oxford · 27 May 2019

DarloRich said:
What are you basing this on? This is nothing like the reality.

It's what I do for a living. I organise commercial leases for all kinds of equipment for the transport industry. There's nothing that can't be leased.

DarloRich · 28 May 2019

route:oxford said:
It's what I do for a living. I organise commercial leases for all kinds of equipment for the transport industry. There's nothing that can't be leased.

Perhaps for road vehicles. The mechanisms you describe ( below) are not found in the railway industry. It is nowhere near that complicated.

route:oxford said:
Unit
Engine
Bogies/Tyres
TPWS & Network Rail equipment

Ken H · 28 May 2019

DarloRich said:
Perhaps for road vehicles. The mechanisms you describe ( below) are not found in the railway industry. It is nowhere near that complicated.

i thought a toc leased a train from a leasing company. if the TOC decide they want a bolt on goody on their fleet, the rosco provides that and ups the leasing charge.

DarloRich · 28 May 2019

Ken H said:
i thought a toc leased a train from a leasing company. if the TOC decide they want a bolt on goody on their fleet, the rosco provides that and ups the leasing charge.

I am not sure the point you are making? You seem to be stating the obvious.

Ken H · 28 May 2019

DarloRich said:
I am not sure the point you are making? You seem to be stating the obvious.

i was trying to say how i understood how it worked. looking for conformation, i suppose.

DarloRich · 28 May 2019

Ken H said:
i was trying to say how i understood how it worked. looking for conformation, i suppose.

got you! I don't think the world of railway leasing has gone as far as road vehicles.

joncombe · 28 May 2019

Pretty sure I remember reading another discussion on here that said that Connex got a large bill for replacing more or less all the windows in the 465/466 Networkers at the end of their lease. This is because they were pretty much all vandalised with so much graffiti scratched into them it was almost impossible to see out of some of the windows and it was extremely rare to find a single pane of glass on them that was not vandalised.

Ken H · 29 May 2019

What about the pacers? they clearly have no future use. Can they be returned robbed of parts? are any parts useable on other units? or will the leasing company expect them back in useable condition?

Tempest3K · 29 May 2019

Ken H said:
What about the pacers? they clearly have no future use. Can they be returned robbed of parts? are any parts useable on other units? or will the leasing company expect them back in useable condition?

While it's unlikely they'll see further use on the mainline post withdrawal, that doesn't mean that the ROSCO's don't have other customers (i.e. heritage lines) lined up who'll want them in usable condition!

Ken H · 29 May 2019

Tempest3K said:
While it's unlikely they'll see further use on the mainline post withdrawal, that doesn't mean that the ROSCO's don't have other customers (i.e. heritage lines) lined up who'll want them in usable condition!

or abroad!

edwin_m · 29 May 2019

I don't think there would be anything to stop the ROSCO and TOC signing a lease contract without the clauses on returning the Pacers in a specific condition, in return for an adjustment in leasing charge. However it would have to be clear who was responsible for keeping them in a safe condition until their withdrawal date, as normally both parties contribute to this. I have no idea whether they have actually done this.

anamyd · 29 May 2019

The government want Pacers to be used as "village halls".

Antman · 29 May 2019

Even British rail had separate clauses and standards on engines. At times. Rightly in many cases.

On a modern world where the engine is say a CAT unit, it would not be a surprise to see a separate agreement for that. Similar with generators or transmissions. Or similar systems. The manufacturer knows a lot less about them and will just contract it out anyway and lay off the risk - much like a motor manufacturer will annihilate suppliers on warranty return terms (in many cases) so it may well be a better deal to do them separately.

I’ve done it for aircraft, some pretty serious (makes railway procurement look cheap) engineering kit and the like. So maybe the railway needs to ‘get with the program’?

Sleeperwaking · 29 May 2019

Ken H said:
So with trains, when they go back to the ROSCO, what is the deal? because we read of trains having to be brought back up to standard by the new owners to make them fit for use.

I'm fairly sure that the previous and new operators will have very different definitions of "fit for use". If it is being operated in service up to the day of hand-back, the previous operator has to maintain the train to a minimum level to ensure it is safe to operate. However, that does not necessarily mean that things like seat covers and flooring will be in the best condition. Also, faults that affect reliability but not safety might be left unfixed (e.g. one or two traction motors isolated, HVAC not working). The train is still technically "fit for use". Whereas a new operator may well expect everything to be working perfectly and looking tip top.

Where the ROSCO is responsible for heavy repair / overhaul as part of the lease, they may have deferred the next overhaul to time it with handback / end of the current lease, so a lot of items that would have received attention at the overhaul might be worse for wear and subject to minor faults. Part of that ROSCO reasoning is that for trains coming off lease as part of franchise changes, the new operator will usually have a whole suite of mods / refurbishments planned as part of the franchise agreement (e.g. fit plug sockets throughout and passenger WiFi), along with a wholesale change in livery. The ROSCO may also have agreed a set of upgrades to make the trains more attractive to the new operator, which would be done at the time. There might also be changes to standards (like the PRM TSI bringing in a whole load of new accessibility requirements) that weren't mandatory during the previous lease but will become mandatory during the next lease - in this case, the "standard" has literally changed between one owner and the next.

Anyway, I've kind of lost track of my point - basically, just keep in mind that when you read about trains needing a lot of work, some of that may be correct / justified, and some of that may well be spin to make the new operator look better than the previous one.

43096 · 29 May 2019

Sleeperwaking said:
I'm fairly sure that the previous and new operators will have very different definitions of "fit for use". If it is being operated in service up to the day of hand-back, the previous operator has to maintain the train to a minimum level to ensure it is safe to operate. However, that does not necessarily mean that things like seat covers and flooring will be in the best condition. Also, faults that affect reliability but not safety might be left unfixed (e.g. one or two traction motors isolated, HVAC not working). The train is still technically "fit for use". Whereas a new operator may well expect everything to be working perfectly and looking tip top.

Where the ROSCO is responsible for heavy repair / overhaul as part of the lease, they may have deferred the next overhaul to time it with handback / end of the current lease, so a lot of items that would have received attention at the overhaul might be worse for wear and subject to minor faults. Part of that ROSCO reasoning is that for trains coming off lease as part of franchise changes, the new operator will usually have a whole suite of mods / refurbishments planned as part of the franchise agreement (e.g. fit plug sockets throughout and passenger WiFi), along with a wholesale change in livery. The ROSCO may also have agreed a set of upgrades to make the trains more attractive to the new operator, which would be done at the time. There might also be changes to standards (like the PRM TSI bringing in a whole load of new accessibility requirements) that weren't mandatory during the previous lease but will become mandatory during the next lease - in this case, the "standard" has literally changed between one owner and the next.

Anyway, I've kind of lost track of my point - basically, just keep in mind that when you read about trains needing a lot of work, some of that may be correct / justified, and some of that may well be spin to make the new operator look better than the previous one.

The basic rule of thumb is that the vehicle should be returned in a condition in line with where it is in the maintenance cycle in terms of interior condition (against when internal work was last done), wheelset condition (is it good to next planned bogie change) etc etc. The vehicle must be fully operational, though, so cannot have motors isolated or defective HVAC to use your examples.

Obviously this can be varied by agreement between ROSCO and TOC e.g. if vehicles are going to go for scrap then the ROSCO may allow robbing for spares. However, the TOC cannot assume that a vehicle has no further use (they do not know what deals the ROSCO may be doing) - it can be very costly if they do with penalty charges applied.

Sleeperwaking · 29 May 2019

43096 said:
The vehicle must be fully operational, though, so cannot have motors isolated or defective HVAC to use your examples.

To be clear, I used those examples to highlight the different interpretations of the phrase "fit for use" from the original post, depending on what the immediate use is.

What is the state of trains when they go off lease?

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