First will not take over West Coast from December

[HH]

It buys 24-30 months for the DfT to get its process right for awarding long term rail franchises.

No it doesn't. There are a whole bunch of franchises that are due to be re-let before then; I cannot see the government putting them all off by 2-3 years.

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Also could the interim franchise just be a way of de facto giving Virign an extension? Can anyone really see it going to another party or even anyone else bidding?

They would certainly want some assurances that they would not only be on a level playing field, but also that the process would withstand yet another Virgin legal challenge!

There are some significant advantages in winning the shorter franchise though, given how much information non-incumbents were missing on this franchise.

 

[monty9120]

i think this is ridiculous. it sends the wrong message out.

the idea if this happens is for someone with nothing to do with the bid to take over until the franchise can be decided

i feel sorry for first to be honest. i reckon virgin will pay almost bugger all and reap the rewards

 

[Zoe]

There are some significant advantages in winning the shorter franchise though, given how much information non-incumbents were missing on this franchise.

Considering the previous competition has been declared null and void it would only seem fair that bidders enter new competition in the same position they were in for the first and so that would include having Virgin as incumbent.

 

[Ferret]

Why this farce of only having a 2 year mini-franchise?! Total nonsense.

 

[PR1Berske]

Comrade Crow speaks

RMT General Secretary Bob Crow on Virgin West Coast contract. "This announcement is no surprise. The Government are ideologically opposed to public ownership of the railways and, in collusion with the private train operators, have stitched up a shabby deal that will enable them to rerun the whole franchise fiasco in a years time.

"Richard Branson and his shareholders are laughing all the way to the bank. Not only have they made hundreds of millions from the rail privatisation lottery but they have now scooped the rollover as well.

"RMT will continue to fight for public ownership of the railways, a position supported by the vast majority of the British people. This short term political fix will not detract from the call for rail to be run as a public service free from the chaos and greed of privatisation. "

Bob Crow added

"The governments ideological opposition to public ownership will turn the West Coast shambles into franchise anarchy.

"We are now told Virgin will cling on for a few months while an expensive, short term franchise competition is run before a further costly, long term contract exercise. We could end up with the nightmare of three different franchise holders in a few years on our most high profile rail route while tens of millions of pounds is wasted on the franchise merry go round and thousands of staff are caught in the cross fire. ".

"This is pure lunacy and all designed to block the logical and stable option of public ownership. "

Ends

 

[Pugwash]

i think this is ridiculous. it sends the wrong message out.

the idea if this happens is for someone with nothing to do with the bid to take over until the franchise can be decided

i feel sorry for first to be honest. i reckon virgin will pay almost bugger all and reap the rewards

I suspect they will probably pay more to the DFT than First were planning to in the first 2 years.

Nevertheless this is a farce.

 

[jon0844]

Was Bob ever expecting the Government to decide this was the moment to renationalise?

Of course not. As he says twice, the Government is ideologically opposed to public ownership. So, it was never going to happen.. why did he even suggest it?

He's just as 'stuck in his ways' for demanding renationalisation all the time.

I'd have a bit more respect for him if he'd try and see the 'middle ground' and offer to work with the Government and industry to try and solve issues, but he's just fixated on one thing over and over and over and over again.

He does get one thing right though; Richard Branson will be laughing all the way to the bank, and it's certainly not over yet.

I can't wait to hear about the deal the DfT negotiates with Virgin (almost certainly in Virgin's favour) and the fun and games when the new franchise bidding process begins (especially if Virgin doesn't win then either).

 

[krisk]

Heres my two pence worth

This franchise should have been settled earlier this year, it then gets extended to December. So thats two lots of uncertainity. Then First win it so I get used to the notion of transferring over to them and thats how it is going to be. Then a huge big spanner is thrown in the works where that result is declared null and void.

I then find out VT is carrying on again albeit a short term solution and then in under a years time I could possibly be working for someone else. After another two years then we go through the whole bidding process again.

Irrespective of the initial bid what interested me the most was how West Coast was going to build, develop and grow. What new ideas was there going to be, ticketing, catering, First Class service, new timetables, destinations etc Now all of that has seemingly gone on hold.

It has been a frustrating time for all and I just wish this was cleared up once and for all. This is the company that has won, this is how long they have got and here is what they plan to do. Then we can all move onto working towards improving and building on past success.

 

[AndyLandy]

Also could the interim franchise just be a way of de facto giving Virign an extension? Can anyone really see it going to another party or even anyone else bidding?

Abellio bid for and won the "caretaker" contract for Greater Anglia, so I guess it's possible that someone else could tread on Virgin's toes for a short-term franchise.

I'd also like to know what's going to happen with the other franchises that are due to be re-let in the near future, not much has been said about the GWML, TL and Thameside franchises.

 

[Ah1479]

I can see First now launching a legal challenge on the basis of competition laws arguing Virgin have been technically granted a new 'small' franchise, even though they're calling it an 'extension', without it being sent to tender first. If anything just to get one back against Branson.

 

[Pumbaa]

And so the merry-go-round continues...

 

[Zoe]

Abellio bid for and won the "caretaker" contract for Greater Anglia, so I guess it's possible that someone else could tread on Virgin's toes for a short-term franchise.

That was slightly different though as I believe the incumbent (National Express) were not bidding.

 

[F Great Eastern]

From what I've heard First won't make any legal challenge on this. I would expect First to push to be able to negotiate an extended deal on Greater Western and Thameslink now however and all other incumbent TOC's to do the same who will have their franchises up for renewal in the next few months should they be delayed.

If the department refuse to do that and try to bring in DOR for the other franchises then I can see there being legal action, especially from First as it clearly would not be fair. There should be no DOR now for any of the franchises, there has to be consistency. You either bring in DOR for all coming up for renewal or not at all.

I wanted DOR in myself and the fact Virgin have got an extension to me makes a mockery of the whole system as next time we have a contest if Virgin loses we'll no doubt have the same campaign all over again, as others have said it sends the totally wrong message out. But they've made the decision and we have to get on with it.

That was slightly different though as I believe the incumbent (National Express) were not bidding.

Why should that make any difference? The contest was void therefore it never happened so what happened in the now voided contest should come into account. You can't say the contest is void but a few pieces still count that suit us.

Also, have Virgin picked their charity yet?

 

[Wolfie]

Have you considered the possibility that the people evaluating the bids were(1) under-resourced, and (2) unable to understand fully what they were dealing with?

Yes, it would be pretty bad, but in Modern Railways Roger Ford said he hadn't yet been able to grasp the GDP-related mechanism and quoted someone senior in First who admitted that he didn't understand it and that some "very clever people" had needed to run it several times.

It seems possible that the DfT have made their franchise frameworks so complicated that they are not only difficult for the TOCs to understand fully, but also difficult for the DfT to evaluate. Maybe the people doing the work were becoming desparate. If they knew from emails going round the department that there was pressure from the Treasury to accept the largest bid, and that some senior staff might be pleased if Virgin didn't win, it's conceivable that they would come up with the answer they knew would be welcomed.

You do from time to time hear of people who hoard or destroy documents because they can't cope with them.

It can be fun to contemplate conspiracy theories but sometimes the cock-up theory is actually the truth.

Do all feel free to shoot these ideas down (as if I needed to say that!).

http://www.independent.co.uk/news/u...uts-cause-west-coast-rail-fiasco-8211008.html

Spot on, at least with respect to your (1) - see the Independent article above.

As a Civil Servant who has seen some asinine cuts in the department I work for, and is waiting for a fiasco to arise as a result, I can only say that the current Govt is "penny wise pound foolish".
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Although they've not said, I would reckon that Virgin's unhelpful attitude in handovers has probably been factored in. I hear that First were having a torrid time before the DfT volte-face.

This is potentially a rather tendentious statement.

In circumstances where Virgin actualy quite correctly believed the process to have been flawed, to the extent that they made an application for judicial review, why should they coperate with First. Indeed, given the application for judicial review, I am not convinced that legally they were obliged to give First anything until the court case had been resolved.

How were Virgin with Arriva when XC was handed over? If they were bloody minded then as well you may have a point....

 

[jon0844]

As a Civil Servant who has seen some asinine cuts in the department I work for, and is waiting for a fiasco to arise as a result, I can only say that the current Govt is "penny wise pound foolish"..

What choice did they have? Surely we're not making all of these cuts for the sake of it, or for fun? Why not ask the people who spent all the money in the first place?!

 

[Zoe]

Why should that make any difference? The contest was void therefore it never happened so what happened in the now voided contest should come into account. You can't say the contest is void but a few pieces still count that suit us.

I'm not saying any part of the voided contest would count. The question is if anyone would bother bidding against Virgin for such a short franchise, this would be the same if the DfT had never held the previous contest but instead decided to just go to a 2 year "caretaker" franchise. Is it really woth taking on Virgin for such a short franchise and do they have a realistic chance of winning against Virgin? In the case of Greater Anglia, National Express didn't bid and so no-one had any incumbant advantage, the DfT had to award the franchise to a new company. As I said, considering the competition has been declared null and void then it's only fair that Virgin go into the new competition in the same position they were in last time as incumbant and so retaining any advantage they had.

 

[HH]

This is potentially a rather tendentious statement.

In circumstances where Virgin actualy quite correctly believed the process to have been flawed, to the extent that they made an application for judicial review, why should they coperate with First. Indeed, given the application for judicial review, I am not convinced that legally they were obliged to give First anything until the court case had been resolved.

How were Virgin with Arriva when XC was handed over? If they were bloody minded then as well you may have a point....

They were, and I do. They are known in the industry to be particularly difficult to work with; even more so than NX. And they are contractually obliged - it's part of the Franchise Agreement.

 

[Wolfie]

What choice did they have? Surely we're not making all of these cuts for the sake of it, or for fun? Why not ask the people who spent all the money in the first place?!

I had no intention of getting into a political discussion but this must be redressed. Incidentally isn't it amazing how all of the problems were down to Brown when the current lot were in opposition but are now a global problem...

Turning to the specifics, as a former member of the Tory party, in my mis-spent student youth, who actually knew some of the individuals (and their ideology) involved in the current Govt I would say that the economic situation has been used as a very convenient excuse. Many things which in normal circumstances would never have been acceptable to the British people have been rammed through in the name of "deficit reduction" which in my view are all about applying naked ideology. I strongly suspect that they expect to only be a one-term Govt and are trying to leave a fait accompli (through pursuing a scorched-earth policy) to any successor.
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They were, and I do. They are known in the industry to be particularly difficult to work with; even more so than NX. And they are contractually obliged - it's part of the Franchise Agreement.

I apologise at least in part therefore.

Surely, however, the Franchise Agreement provisions only apply once a successor has been selected and a legally valid contract placed? First never had such a contract....

 

[F Great Eastern]

I'm not saying any part of the voided contest would count. In the case of Greater Anglia, National Express didn't bid and so no-one had any incumbant advantage.

So on one hand you're sign the previous voided contest cannot count and now needs to be treated as if it never happened.

Yet on the other hand you're saying it's different to National Express as Virgin did bid?

So you agree the contest is null and void yet you say the list of bidders still counts?

Virgin didn't bid, nobody did as the contest was voided and never happened.

it's only fair that Virgin go into the new competition in the same position they were in last time as incumbant and so retaining any advantage they had.

So I guess you will agree with me and say all of the other TOC's who will have their franchise delayed should also get extended until the new framework and ITT is drawn up?

Also contracts generally don't work like that, if the contract for something expires it expires, the incumbent have no right to stay on, they can be given an extension yes but they have no absolute right to it. The only thing that is legally binding is they get the contract until it's expiry date, nobody has right of an automatic extended period if the awarding party delay the award of the new contract for any reason. It's for the awarding party to decide and everything should be on a level playing field.

I might try that tactic next time I'm dealing with contracts in business and argue that point, I wonder how well it will go down....

 

[Zoe]

So on one hand you're sign the previous voided contest cannot count and now needs to be treated as if it never happened.

Yet on the other hand you're saying it's different to National Express as Virgin did bid?

No, that's not what I'm saying. Virgin will be bidding for the new franchise and has the potential advantage of incumbant status. That is different to Greater Anglia where there was no incumbant. The previous contest is null and void and who bid last time should make no difference.
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Also contracts generally don't work like that, if the contract for something expires it expires, the incumbent have no right to stay on, they can be given an extension yes but they have no absolute right to it. The only thing that is legally binding is they get the contract until it's expiry date, nobody has right of an automatic extended period if the awarding party delay the award of the new contract for any reason. It's for the awarding party to decide and everything should be on a level playing field.

Virgin went into the last contest as incumbant and had it not been for a mess up by the DfT they could have won the franchise. Is it really fair that Virgin lose this potential advantage in the new contest? It was the DfT that made the mistake so they should allow all to enter the new contest in the state they were in last time as though the previous contest had never occured. The DfT could have gone straight to DOR when the previous franchise was due to expire in May but they didn't, instead they gave Virgin an extension and allowed them to compete as incumbant.

 

[Geezertronic]

I wanted DOR in myself and the fact Virgin have got an extension to me makes a mockery of the whole system as next time we have a contest if Virgin loses we'll no doubt have the same campaign all over again, as others have said it sends the totally wrong message out. But they've made the decision and we have to get on with it.

Maybe I am missing the point, but if the DfT hadn't screwed up this process big time then Virgin wouldn't have had anything to argue against? So if the process is run correctly next time them the franchise offer cannot be disputed?

 

[Zoe]

Maybe I am missing the point, but if the DfT hadn't screwed up this process big time then Virgin wouldn't have had anything to argue against?

They wouldn't have been argueing against anyone if the DfT had awarded them the franchise.

 

[F Great Eastern]

No, that's not what I'm saying. Virgin will be bidding for the new franchise and has the potential advantage of incumbant status. That is different to Greater Anglia where there was no incumbant. The previous contest is null and void and who bid last time should make no difference.

There was an incumbent in Greater Anglia - National Express. You're saying that because they did not bid and Virgin did bid prior to the contest being deleted that things are different. Then you said who bid last time should make no difference, only to go on to say that Virgin did bid last time therefore it does make a difference but contradict that in your former sentence.

whether they bid or not is a complete red herring in this discussion so I'm not sure why you are bringing this up? You're saying who bid last time should make no difference but you're saying that as Virgin bi

Virgin went into the last contest as incumbant and had it not been for a mess up by the DfT they could have won the franchise.

So could all three of the other bidders.

Is it really fair that Virgin lose this potential advantage in the new contest? It was the DfT that made the mistake so they should allow all to enter the new contest in the state they were in last time as though the previous contest had never occured.

There should be no advantage to anyone. It should be a level playing field else it's a flawed and biased tender that is not a fair contest, I'm shocked that you really are suggesting we should have tenders in this country which are corrupted. This may go on in other countries but it is not something I want to have here.

So for example if I contracted Party A to provide services to mine until December 1st and then delayed a tender for 12 months to who would take over due to a problem with the process, Party A should automatically get an extended period? They have no legal right for such thing. It would be up to my company to make the best decision we felt for the business and it would be our decision alone.

Maybe I am missing the point, but if the DfT hadn't screwed up this process big time then Virgin wouldn't have had anything to argue against? So if the process is run correctly next time them the franchise offer cannot be disputed?

I agree - but my point is that there are some who had the feeling that Virgin were making the challenge just in case something would be found rather than actually knowing something would be found.

Virgin's complaint about First's bid was that it was unsustainable and would not be able to make the payments. In fact the problem was not related to that and instead was related to money required to cover risks.

Ironically Virgin claimed that First had offered to pay too much, when in fact they were not paying enough!

 

[Zoe]

There was an incumbent in Greater Anglia - National Express. You're saying that because they did not bid and Virgin did bid prior to the contest being deleted that things are different. Then you said who bid last time should make no difference, only to go on to say that Virgin did bid last time therefore it does make a difference but contradict that in your former sentence.

No, I am not contradicting anything. Virgin bidding last time should make no difference. I am talking about the new competiion in which Virgin will be bidding as incumbant. National Express were the incumbant with Greater Anglia but didn't bid and so the other parties didn't have to bid against an incumbant.
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whether they bid or not is a complete red herring in this discussion so I'm not sure why you are bringing this up? You're saying who bid last time should make no difference but you're saying that as Virgin bi

No, I'm not saying that at all. What I am saying is that Virgin will be bidding for the new franchise as incumbant which could give them a potential advantage.
--- old post above --- --- new post below ---

I'm shocked that you really are suggesting we should have tenders in this country which are corrupted. This may go on in other countries but it is not something I want to have here.

I'm not saying there is any corruption situtation like "Company A is the incumant so all the other bids just go in the bin" but as stated by HH in an earlier post, there was some information the non-incumbents didn't have on this franchise so it would seem that it is an advnatage to enter the competition as an incumbant.

 

[tbtc]

The problem with this is that Virgin can essentially name their price for the 4-6 month contract; the government have effectively said they have no choice

have Virgin picked their charity yet?

Yup - another couple of years to run the franchise with the biggest profit margin in the UK, and the press seem to have forgotten about the "charity" pledge. Happy days for Virgin.

And whilst I know that the charity talk was only ever froth, you can be sure that if the boot was on the other foot, Virgin would be running the "...but what about the charities..." angle with the press.

So 3 years before we even get a long franchise. Any progress and development 5 years away.

Sorry Shrewsbury, Blackpool etc you'll have to wait a bit longer......

Sadly you are correct.

I'd like to think that, since the two "best" bids agreed on some things (like the need for new 125mph tilting EMUs) the Government could get on with setting the arrangements for such things in place to ensure that we've not wasted another couple of years.

Really, there should be some DfT planning going on to ensure that the things that First and Virgin both promised to do can be accelerated, rather than pushed further into the future. Then I would be less bothered/ worried about this apparent short term stasis.

Why this farce of only having a 2 year mini-franchise?! Total nonsense.

Yes. The short term GA agreement was bad enough, but (without meaning to offend those in Essex/ East Anglia etc) the WCML franchise matters more - this is a worryingly short term deal (at a time when the CP5 announcement made me think we were finally getting round to long term planning on the railways).

Virgin will be bidding for the new franchise and has the potential advantage of incumbant status

Virgin went into the last contest as incumbant and had it not been for a mess up by the DfT they could have won the franchise. Is it really fair that Virgin lose this potential advantage in the new contest?

Does being incumbant confer an advantage? And should it confer an advantage?

 

[Philip Elliott]

Ironically Virgin claimed that First had offered to pay too much, when in fact they were not paying enough!

Err no. Virgin claimed that the premium payments from First were too much. It was the subordinated loan that wasn't enough - two completely different things.

 

[Zoe]

Does being incumbant confer an advantage? And should it confer an advantage?

I have never gotten a definitive answer on if previous track records are taken into account or not when deciding on the award of a new franchise.

 

[Oswyntail]

I had no intention of getting into a political discussion but this must be redressed. Incidentally isn't it amazing how all of the problems were down to Brown when the current lot were in opposition but are now a global problem...

I think the Government are consistent in saying - rightly - that most of the current problems in the British finances are down to Brown.

Turning to the specifics, as a former member of the Tory party, in my mis-spent student youth, who actually knew some of the individuals (and their ideology) involved in the current Govt I would say that the economic situation has been used as a very convenient excuse. Many things which in normal circumstances would never have been acceptable to the British people have been rammed through in the name of "deficit reduction" which in my view are all about applying naked ideology.

And where are the specifics in that? (And, as an aside, what is wrong with "ideology" as such? I would rather have a group who had an ideology, than one that drifted around simply seeking "power", like New labour )

I strongly suspect that they expect to only be a one-term Govt and are trying to leave a fait accompli (through pursuing a scorched-earth policy) to any successor..

This is a much more accurate description of the Brown Government than the current one. I do, however, think that the Civil Service is being starved of resources, and that is leading to some problems with implementation (such as the current thread subject). But this is not so much due to the need for drastic cost savings as the unwillingness in some quarters to analyse where cuts should be made, instead simply saying "n% across the board".

 

[F Great Eastern]

Err no. Virgin claimed that the premium payments from First were too much. It was the subordinated loan that wasn't enough - two completely different things.

Yes, they did claim the premium payments were too much, which is not why the franchise was declared void. They also appear to have asked for too little in the subordinated loan I agree with both of those.

They were two different things yes, but the fact is according to Virgin First should not get the franchise as they were offering to pay too much money in one area, which was not the case, it was actually the fact they had not agreed to pay enough in another area.

If Virgin's protest would have been correct it would have been because First overall were paying more than they can afford. When in fact the reason the contest was declared void was because they had not been asked to pay enough of a loan.

I have never gotten a definitive answer on if previous track records are taken into account or not when deciding on the award of a new franchise.

They certainly were not in the round of franchise awards a few years after the turn of the millennium.

 

[tbtc]

I think the Government are consistent in saying - rightly - that most of the current problems in the British finances are down to Brown

Although, oddly, I don't remember the Tories complaining about Brown being too lax on the banks - maybe you can find some examples of senior Conservatives demanding more regulation on the City of London?

I seem to recall the 2005 election saw Micheal Howard promising to match Labour's public sector spending, for example.

Then the banks started to go wrong, and everyone became an expert - but before the crash those on the right were perfectly happy with the "laisser faire" approach to the financial sector.