First will not take over West Coast from December

[TheJRB]

PMc: Erm. Well I can say very definitely on the 9th of December when at the moment the Virgin franchise ends the trains will continue to run. Erm...I am looking today at whether Virgin can run them or whether we move to a Directly Operated Railway system, as is run on the East Coast mainline when the last Government had a franchise collapse on it.

I don't understand how Virgin is even an option being investigated. Surely the only fair option would be DOR, no?

 

[Ferret]

Depends if VT are going to be held to their offer of running it for free or not!

 

[Red Dragon]

http://www.bbc.co.uk/news/business-19809717

Transcription:

Patrick McLoughlan (Transport Secretary): It's very embarrassing, it's deeply regrettable, and basically it's unacceptable that we should find ourselves in the position that we are. ...............

Thanks for posting the details PR1Berske - very enlightening.

 

[northwichcat]

My guess is that there will have to be a rapid contract extension process for all terminating franchises to allow a ROBUST system to be put in place.

The new Northern franchise will need the franchise spec rewriting to allow for the TPE and electrification changes starting at the May 2014 timetable change. It's not as simple as just saying 'extend the current franchise to April 2015.' Also the current operator can reject an offer of a franchise extension as First Group have done with Great Western.
--- old post above --- --- new post below ---

Depends if VT are going to be held to their offer of running it for free or not!

So Virgin currently pay a premium for operating the franchise and will offer to run it for free. Sounds like an excellent deal for Virgin if DfT approve it.

 

[jon0844]

Seems Virgin carrying on isn't a given then. Might only be until such time DOR is ready to go.

 

[Wolfie]

I thought that too, the last thing we need in this country is YET MORE delays to introduction and therefore cascading of rolling stock we've had too much of that as it is over the past few years.

The IEP and Thameslink rolling stock orders are taking an age and then we have all the other canceled orders over the past few years and the network is at breaking point at the moment the last thing we need is further delays.

I have to say that a number of well informed individuals regarded DfT's actions in the IEP procurement as dubious at best. I bet DfT are glad the contract on that has already been signed, but I wonder if the window for legal action is still open.

I strongly suspect Bombardier's lawyers will be giving the Thameslink decision another once-over after this as well.....

 

[Ferret]

Seems Virgin carrying on isn't a given then. Might only be until such time DOR is ready to go.

Of course, a Minister did say that DOR would be ready to roll on 9th December, but then a Minister also said that the franchising system used was 'robust'.

 

[Realfish]

I don't understand how Virgin is even an option being investigated. Surely the only fair option would be DOR, no?

Err, No!

 

[ushawk]

Today isnt a victory for anyone - it just proves that the DfT have royally cocked it up and there will now be an investigation. Although any anti-Virgin/Branson people (of which there are a good few on this topic) will say otherwise.

I would think DOR would take the franchise over in the meantime - which isnt a bad thing considering how good East Coast is now.

This will probably also mean all franchises coming up being delayed though, meaning new orders for RS will be delayed.

 

[Mike395]

Err, No!

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!

 

[northwichcat]

Speaking today, Mr McLoughlin said he was "very angry" about what had happened.

He went on: "The original model didn't take into account inflation and also some elements of the passenger number increases over a number of years," he said.

So lessons haven't been learnt from the Northern franchise awarded in 2004 which the previous government admitted they got wrong?

 

[jon0844]

The other two losing bidders might now have a thing to say about the fiasco too. Perhaps they could have won instead?

I can say that it's good if Virgin has uncovered grave errors or even corruption. That doesn't make me like Virgin for misleading the public, which it is still doing now by suggesting it must carry on as if it owns the staff, trains and drivers.

But let's not believe Virgin had a winning bid and that things don't go right back square one with Virgin still able to lose. Maybe even losing at the first round if the others 'up their game'. Or Virgin gambles and makes a crazy bid in anticipation and is rejected on the same grounds as they argued for here.

Arguably a good day for the industry (IF it improves the franchising process) and possibly, in the future, the taxpayer but not for Virgin.

 

[Masbroughlad]

It's a real opportunity to throw the whole thing in the air and almost start again from a clean sheet.....

Explore some of the other privatisation models that were on the table back in the 1990s? I know it is a different starting point, but...

 

[aleph_0]

So Virgin currently pay a premium for operating the franchise and will offer to run it for free. Sounds like an excellent deal for Virgin if DfT approve it.

The BBC News site said "Virgin Trains and Stagecoach [offered to] run it on a not-for-profit basis after December". I'd suggest by free that actually meant they would offering to run it without taking a profit themselves, i.e. paying a premium equal to the profits made to the government.

I'd also expect them to be much more generous with their spending - e.g. better first class food, staffing, advanced ticket quotas(?) in this period, since this would give them a better reputation, and wouldn't loose them any money!

 

[philjo]

I suppose one possibility is that Virgin get an extension for a few more months and then DOR take over (say in Feb/March) which would give more time for DOR to be fully organised and all of the contracts/safety cases etc transferred without doing everything in a rush to be ready for Dec 9 and risk bodging that process as well due to the lack of time.

As the franchise process took 15 months and now has to restart but the reports on what went wrong are due for submission by Dec 31st that means at the very earliest Spring 2014 for the new West coast franchise to start - which presumably be too long for VT to have a simple extension (given that they have had one extension already to cover the olympic period)

 

[Xenophon PCDGS]

I strongly suspect Bombardier's lawyers will be giving the Thameslink decision another once-over after this as well.....

That, as they say, is opening another can of worms..:roll:

 

[LNW-GW Joint]

Depends if VT are going to be held to their offer of running it for free or not!

Virgin offered to run it not-for-profit while the judicial process decided on the case.
They have now won their case by default, so the answer is no.
I should think VT might agree to continue under a management contract (similar to the one in force 2000-2008 during WCRM).
DfT might prefer DOR, but there isn't a bottomless pit of spare TOC managers lying around.

Whoever runs WC from December it will be on a care-and-maintenance basis without investment (ie no new trains, services, station upgrades etc).
Not a recipe for progress.

I think we might be in for a string of shorter franchises where the risks are more manageable. Also not good for investment.

 

[Zoe]

Also the current operator can reject an offer of a franchise extension as First Group have done with Great Western.

It was different for FGW though as the optional years (8 to 10) were part of the original agreement before the franchise started. In other cases the franchise is approaching the end of its term when the DfT agrees an extension.
--- old post above --- --- new post below ---

I think we might be in for a string of shorter franchises where the risks are more manageable.

Which would be a complete reversal of the policy of this government to let long term franchises.

 

[Masbroughlad]

The German model of running a railway looks good to me. Is it a major state company but with competition from private companies alongside?

 

[fgwrich]

That, as they say, is opening another can of worms..:roll:

It could happen though - It would seem that the cracks in the Dfts seems are becomming so see through that the Hitachi IEP Deal could also undergo a review - which cant be a bad thing surely?, and Thameslink too.

Im also gathering from Tony Miles's comments on WNXX, that the present goverments civil service culling has brought up the number of junior civil servants - and essentially let them have a go at the Franchising process.

So all in all - If anyone watches Big Fat Quiz of the 80s, 90s, 00s & Year - It's like a combiniation of Yes Minister with the children of Mitchell Brook Primary School at the Dft.

 

[hippo1]

Publicly owned ECML in profit. Profits not going into share holders pockets.
It's time to run the WCML on the same basis' along with the rest of the Rail
network.

 

[Zoe]

It could happen though - It would seem that the cracks in the Dfts seems are becomming so see through that the Hitachi IEP Deal could also undergo a review - which cant be a bad thing surely?, and Thameslink too.

If that gets retendered though it could result in the situation where the GWML is electrified but no trains are available to run an electric service. I don't think it would be great to end up with HSTs running fully under the wires.

 

[Lampshade]

I get the impression that the only ''improvements'' from First group at Preston Station would be Barriers!

Rough calculations suggest the only "improvements" at ANY station would be barriers.

 

[krisk]

So whose taking over then?

 

[fgwrich]

At the moment, that still seems to be up in the air. Virgin could be granted a 2 Year franchise extention, or DOR could take over untill the franchise review is complete and bidding has commenced / completed. But, virgin has said that a fair chunk of the contracts due to end on December the 9th could / can be renewed and extended.

 

[Zoe]

At the moment, that still seems to be up in the air. Virgin could be granted a 2 Year franchise extention, or DOR could take over untill the franchise review is complete and bidding has commenced / completed. But, virgin has said that a fair chunk of the contracts due to end on December the 9th could / can be renewed and extended.

Could they not just put Virgin on a management contract until the retender is complete rather than extending the franchise agreement?

 

[cj_1985]

At the moment, that still seems to be up in the air. Virgin could be granted a 2 Year franchise extention, or DOR could take over untill the franchise review is complete and bidding has commenced / completed. But, virgin has said that a fair chunk of the contracts due to end on December the 9th could / can be renewed and extended.

which would suit them fine... and i would imagine that if DfT decided to grant another extention to virgins ICWC franchise after everything over the last 2 months or so... that they (the DfT) would possibly be opening themselves up to complaints from the other bidders for the new ICWC franchise and god forbid.. legal action from any of those companies.

 

[AndrewP]

The big question is how long have there been serious problems in the DfT.

Many years is my guess with various ministers of all political persuasions being let down.

Although this is really bad if things get sorted after and process gets followed properly in the future (its OJEU procurement so the process is broadly mandated) it could be a good thing moving forward.

I am pleased that we have had a minister admit there has been a big problem.

I still can't believe a procurement subject to OJEU has gone so wrong!

 

[PR1Berske]

Publicly owned ECML in profit. Profits not going into share holders pockets.
It's time to run the WCML on the same basis' along with the rest of the Rail
network.

And then we'll see taxes go up and Unions doing the strong arm tactics again

No thanks

The country couldn't afford - and certainly can't now thanks to 13 years of Labour misrule - nationalising the railways. It's as easy as that.

 

[AndrewP]

As for who runs the contract in the short term it is almost irrelevant as the same people will be doing the same jobs with the same operational management.

There will be no significant changes in the short term. It may be expedient to use Virgin (although possibly re-branded) - it depends on timescales.

Also a mention for the staff affected - this uncertainty must be horrible. Even though there is protection through TUPE and the need to provide a service it won't be nice.