First will not take over West Coast from December

[EM2]

also Virging deserve it they have done a really good job over the last 15 years so why get rid of something that works?

Yet they have more complaints per 100k passengers than any other TOC except East Coast, and less than FCC, FTPE, FSR and FGW put together.
And they answer less than 60% of those complaints within the industry standard of twenty working days. http://dataportal.orr.gov.uk/browsereports/6
And in the meantime, they're making a profit per employee 1700% higher than any other TOC, and higher than any supermarket, fast food restaurant or high street bank. Almost three times higher than all the other train operators put together, and over three times more than Tesco and McDonalds combined. http://eoin-clarke.blogspot.co.uk/2012/08/virgin-trains-make-33713-profit-per.html

 

[Woody]

Given VRG's reaction to this franchise award I would be surprised if anything like this had occurred before. In this kind of process there should be 3 parties who understand what is going on in great detail, the DfT and the 2 bidders.

Clearly in this case VRG have been banging on about problems with the process for some time because they could see the problems with the First bid even if the other 2 parties couldn't. In previous franchise competitions the same would apply so one has to assume the numbers added up correctly or close enough not to matter otherwise the decision would have been challenged like this one.

Any of the relative benefits of rail privatisation compared to BR have effectively been paid for by the laundering of huge sums of public money into private coffers and not very efficiently either compared to our European neighbours state run railways according to Mc Nulty.You can only go on cutting so many Hospitals ,Police etc in order to keep bailing out a financially discredited rail privatisation.The trouble is there are to many snouts now in the railway trough now and that simply cant go on indefinitely politically or financially in our austere new world.

 

[al green]

Care to back that opinion up? As far as I can see, DOR is the only fair option due to the fact that Virgin haven't won the franchise yet just as much as First haven't!

Green Party also advocates DOR.

http://greenparty.org.uk/news/2012/...‘further-proof-rail-should-be-renationalised/

 

[WatcherZero]

Now the Scottish Government is wading in, Transport Secretary Keith Brown to make a statement later today complaining that they were not given any warning about a decision which affects them.

 

[HH]

Market forces then? Rail travel numbers are increasing, so rail staff should be paid more. I think, on reflection, your argument may have some validity, since BR (provided their political masters agreed) could say 'stuff it, let rail staff strike until they run out of money', whereas private companies could end up paying a penalty if they don't meet targets, so they have to pay staff a decent wage to run the services.

Of course, the downside to this is that the railway companies may then decide to cut 'non-essential staff' to save money.

Complicated, isn't it!

Market Forces is another way of saying Supply & Demand. This is partly why driver salaries are high. It doesn't explain other groups of staff, who can be recruited and trained pretty quickly. I believe that there are two forces which have been at work.

Firstly, 'upskilling'. TOCs have wanted better skilled and more flexible staff and have been prepared to pay to get them. Secondly, there haven't generally been the arbitrary pay restraints that governments occasionally enforce on staff they directly control.

Certainly TOCs are going to be assiduous in losing posts they see as gaining no benefit. Much more so than BR. However by and large they have been adding jobs far more, and few staff have ever been laid off. Some of this is probably down to the terms of the Franchise Agreement, but there is a real belief in things like Customer Service & Safety at the highest echelons at some of the owning groups at least - it is all down to individuals at the end of the day, people should not forget that.

--- old post above --- --- new post below ---

Any of the relative benefits of rail privatisation compared to BR have effectively been paid for by the laundering of huge sums of public money into private coffers and not very efficiently either compared to our European neighbours state run railways according to Mc Nulty.You can only go on cutting so many Hospitals ,Police etc in order to keep bailing out a financially discredited rail privatisation.The trouble is there are to many snouts now in the railway trough now and that simply cant go on indefinitely politically or financially in our austere new world.

McNulty largely points the finger at Network Rail, which is not Privatised. Blind prejudice should never replace logic or you end up writing palpable rubbish.

 

[HSTEd]

As I understand it, at privatisation BR had some of the lowest wages in the country for workers of the level of skills and training required. I remember reading in the Hidden Report that the reason the Senior Technician was working 7 day weeks was because he could increase his salary to the princely sum of £16,000/annum.

Anyway, BR was an effective monopsony purchaser of labour in multiple fields that now have a competitive market.
If a train driver wants more pay he can either strike or simply threaten to go somewhere else in the marketplace, before the market existed the only option available was the first.

It is a sellers market for the labour fo said staff, hence wages inflate enormously.


And ofcourse McNulty criticises Network Rail above all else, since as "Yes, Minister" would say... never hold an inquiry without knowing in advance what the result will be, and in this case the powers that be arranged for an enquiry that would blame the public sector and praise the private for being gloriously efficient.

 

[island]

A FCC train? Surely a FGW one would have been more appropriate?

Still, readers will think FCC=bad and Virgin=great.

Especially when there are still people who think First was going to run 319s and 156s up whe WCML!

 

[All Line Rover]

So what's going to happen to us passengers, then?

• We won't see cuts to Anytime fares?
• We won't see new services as soon as was originally planned?
• We won't see a new fares system?
• The Railcard easement might be scrapped?
• New trains won't come into service as soon as was originally planned?
• The new timetable, with additional stops at Nuneaton and other stations, won't come into force as soon as was originally planned?
• The new 'intermediate' class of travel might be scrapped?

 

[90019]

I remember reading in the Hidden Report that the reason the Senior Technician was working 7 day weeks was because he could increase his salary to the princely sum of £16,000/annum.

What year was that from, and what was the average wage for that year?

 

[Aictos]

It's no surprise that when the DfT is full of ex-First folk that there is a bias to it...

Well the DfT certainly know quality

To lay the blame at the door of John Major and the conservatives is a bit harsh. Yes they have cocked up with the WCML franchise, but ....

Labour were in power for 13 years and despite several promises to change the franchise system, ended up doing nothing. So how many franchises have been awarded after some dodgy calculations. Unless the DfT go through everything with a fine tooth comb, we'll never know.

Indeed I believe there was a proposal at a Labour Party conference years ago where this was brought up BUT got rejected by Gordon Brown and Alistar Darling for the following reasons:

Gordon Brown and Alistair Darling had argued that renationalisation would cost the government at least £22 billion, on top of the costs of putting the railway companies’ debts in the balance books. However, Transport for Quality of Life argue that railway franchises could gradually be renationalised by the state at close to zero immediate cost. The easiest approach would simply be to reacquire the franchises as contracts expire or companies fail to meet the conditions. Network Rail would be even easier to nationalise, as it has no shareholders and is already non-profit. The only associated costs would be putting its £24 billion debt on government balance sheet as public debt- although this debt already exists and is already in effect owned by the public. Overall, Transport for Quality of Life estimate these changes would save £300million per year, due to the government’s superior credit rating, and the increase in efficiency by simplifying the organisations.

While the other staff may moan about the pay to drivers, I doubt they'd do too much to change things given how many will put in for driver training if they can!

This is very true, ask any non driver if they were interested in more money by applying as a driver, 80% or more would jump at the chance!

 

[OuterDistant]

What year was that from, and what was the average wage for that year?

This is Money's Inflation Calculator says £16,000 in 1988 = £35,360 today, but not sure what the average wage was back then.

I was looking at the Hidden Report last week and couldn't really make sense of the figures without doing this!

 

[Eagle]

McNulty largely points the finger at Network Rail, which is not Privatised.

Yes it is. It is a private limited-by-guarantee company (meaning it has no shares or shareholders), and isn't really owned by anyone, especially not the state.

 

[philjo]

Care to explain the 29% real term increase in staffing costs then since 1994?

Presumably the increases in employer NI contributions in recent years would be a factor.
Also for the lowest paid posts the increases in the minimum wage.

 

[northwichcat]

When you reach 66% AVERAGE occupancy it should be clear that you will have way more people than capacity on the busiest trains as they arrive or depart London.

How exactly is that figure calculated?

With Virgin there's a number of points to take in to consideration:
1. Standard Class can be full but First Class can have empty seats.
2. When Virgin went to 3tph to Manchester they removed pick up and set down restrictions at Stockport and introduced cheap VT only local tickets for journeys between Manchester and Stockport/Wilmslow/Crewe/Macclesfield/Stoke. As Virgin are an Intercity franchise these tickets are really just to fill the empty seats north of Crewe/Stoke and if trains were overcrowded Virgin could simply withdraw their VT only local tickets and reinstate pick up and set down restrictions to deal with the overcrowding.

 

[HH]

Yes it is. It is a private limited-by-guarantee company (meaning it has no shares or shareholders), and isn't really owned by anyone, especially not the state.

OK, it's pseudo-privatised. The state runs it via various mechanisms.

 

[kieron]

Yes it is. It is a private limited-by-guarantee company (meaning it has no shares or shareholders), and isn't really owned by anyone, especially not the state.

Network Rail is controlled by its members, one of which is the DfT. The DfT has the right to remove all other members in the event of severe financial failure. I haven't been able to find the articles of association, but the government does seem to have a stronger case for ownership than anyone else.

As no-one else has any financial obligation to Network Rail, and none of the members receive remuneration for their role, it's likely to be pretty cheap to formally nationalise if desired. Wikipedia gives the TSB as a comparable entity.

 

[HH]

How exactly is that figure calculated?

With Virgin there's a number of points to take in to consideration:
1. Standard Class can be full but First Class can have empty seats.
2. When Virgin went to 3tph to Manchester they removed pick up and set down restrictions at Stockport and introduced cheap VT only local tickets for journeys between Manchester and Stockport/Wilmslow/Crewe/Macclesfield/Stoke. As Virgin are an Intercity franchise these tickets are really just to fill the empty seats north of Crewe/Stoke and if trains were overcrowded Virgin could simply withdraw their VT only local tickets and reinstate pick up and set down restrictions to deal with the overcrowding.

Virgin calculated the figure, but it looks about correct given the change in overall passenger journeys (5.8% CAGR) and the small number of extra seats announced by First (roughly 9% increase).

It will probably be Standard Class seats as that is what is normally quoted. First will therefore get some seats from the "Middle Class", but this is limited as they are leaving them in First Class configuration, plus there will be some abstraction from First (probably quite a lot, as if you offer Middle Class you can't really offer discounted First Class as well).

It is unlikely that the tricks used by VT to increase seat usage will be abandoned by First, indeed I would expect some increase. Still you have to look at the Yield increase (1.5% CAGR IIRC and including increased revenue protection) to know that they are not dramatically shifting passengers from shorter to longer journeys.

Therefore either they got their sums wrong, made some heroic assumptions (such as Sunday afternoon travellers being persuaded to travel Monday instead), or have some unannounced plans for increasing seats (such as closing the shop in year 10, say).

 

[snail]

http://www.guardian.co.uk/uk/2012/oct/03/west-coast-rail-what-next?newsfeed=true

Have you ever seen a more biased article?

Frequently. What else should they have said?

it's not as biased as this headline from the same paper: Virgin Rail back on track in west coast shambles.

 

[HH]

It's no surprise that when the DfT is full of ex-First folk that there is a bias to it...

Who are these people? At one point there were a few; can't think of any offhand now.

 

[kylemore]

Who are these people? At one point there were a few; can't think of any offhand now.

Is Mike Mitchell still there?

 

[northwichcat]

Virgin calculated the figure, but it looks about correct given the change in overall passenger journeys (5.8% CAGR) and the small number of extra seats announced by First (roughly 9% increase).

First Group have proposed 11 additional 6 carriage trains while Virgin have proposed terminating the Voyager lease and getting an equivalent number of 6 carriage trains to replace the Voyagers. That would give First provision for offering more services to secondary destinations than Virgin.

 

[barrykas]

If you're not agency or on a part-time contract, don't you get good discounts on rail travel (and free travel to/from work?).

Generally free travel on your own TOC (and others in your owning group, where applicable), 75% discount on Anytime Returns, such as the (in)famous £296.00 one from London to Manchester, bringing it down to £74.00...a whole 20p cheaper than the Off-Peak Return, and 75% discount on monthly or longer seasons. No discounts on LU, unless you started before 1st April 1996, except for journeys involving cross-London transfers (e.g. Wembley Stadium to Brighton).

And as I need to use the tube to get to work, whilst I could save a massive...£144 a year by getting a PRIV point to point plus Zone 1-2 Annual, I'd lose so much flexibility in routeing options that I don't bother.

 

[HH]

Is Mike Mitchell still there?

Nope.

 

[ainsworth74]

75% discount on Anytime Returns, such as the (in)famous £296.00 one from London to Manchester, bringing it down to £74.00...a whole 20p cheaper than the Off-Peak Return

Though, of course, if you want to arrive in London before what is almost midday (1142) it's a pretty good deal.

 

[HH]

First Group have proposed 11 additional 6 carriage trains while Virgin have proposed terminating the Voyager lease and getting an equivalent number of 6 carriage trains to replace the Voyagers. That would give First provision for offering more services to secondary destinations than Virgin.

Yes, that's the ~9% increase I was mentioning, but that is factored into the quoted numbers.

First would apparently be carrying around 30% more passengers than VT by the end of the franchise (VT's calc - First claimed a smaller number, but not that much smaller).

 

[The Ham]

First Group have proposed 11 additional 6 carriage trains while Virgin have proposed terminating the Voyager lease and getting an equivalent number of 6 carriage trains to replace the Voyagers. That would give First provision for offering more services to secondary destinations than Virgin.

As an aside, if the Voyagers where replaced it would however have meant that if Virgin won (or this is what happens when the franchise is let) there would be a load of Voyagers that could be used by another TOC to replace/strengthen their existing fleet of DMU's.

 

[LNW-GW Joint]

Is Mike Mitchell still there?

No, he retired a couple of years ago, roughly at the point the government changed.
However Peter Strachan, who once ran First North Western and Arriva Trains Wales, is now there, having gone via jobs in Australia.
He's been major projects Director General (Thameslink, Northern Hub etc) since Oct 2011.
Probably not involved in franchises.

The Telegraph has some names of people who might be implicated in the DfT shambles http://www.telegraph.co.uk/news/ukn...se-is-a-great-Whitehall-railway-disaster.html
The DfT organisation chart also makes interesting reading: http://reference.data.gov.uk/gov-structure/organogram/?dept=dft&post=1
I can find a Director for specifying franchises (Roger Jones) but not one for awarding them.

 

[northwichcat]

As an aside, if the Voyagers where replaced it would however have meant that if Virgin won (or this is what happens when the franchise is let) there would be a load of Voyagers that could be used by another TOC to replace/strengthen their existing fleet of DMU's.

True. I started this thread http://www.railforums.co.uk/showthread.php?t=72486 for ideas about how XC could get extra capacity under First Group's plan to not cascade any Voyagers.

Of course we would hope XC would get extra capacity but if a deal couldn't be agreed they might finish up replacing HSTs.

 

[HH]

I can find a Director for specifying franchises (Roger Jones) but not one for awarding them.

There isn't one; it would be down to Procurement. I understand that the person responsible in Procurement is one of the three; the lead in the Franchise Team the lowest level; I assume that Mr Jones is the Senior post mentioned.

TBH this does smack of scapegoating. In each case the most senior person in each area has been singled out. Now while I agree that carrying the can goes with being the boss, why does it stop precisely there in each case? And would any of them be responsible for carrying out the DfT's risk calculations, which are highly specialised?

 

[LNW-GW Joint]

There isn't one; it would be down to Procurement. I understand that the person responsible in Procurement is one of the three; the lead in the Franchise Team the lowest level; I assume that Mr Jones is the Senior post mentioned.

TBH this does smack of scapegoating. In each case the most senior person in each area has been singled out. Now while I agree that carrying the can goes with being the boss, why does it stop precisely there in each case? And would any of them be responsible for carrying out the DfT's risk calculations, which are highly specialised?

I'd be interested to hear how Philip Rutnam, the Permanent Secretary, escapes blame.
He has only been in post at DfT for 6 months (came from Bis), so can't have been involved in the formulation of the franchise policy or evaluation rules.
But he can't have reviewed the award decision for the contract properly.
On top of which he went in front of the TSC with his new Secretary of State to defend his processes and rubbish Virgin's challenge.
At the very least it might put his knighthood on hold.