First win Intercity West Coast franchise

[RPI]

The ones shouting the loudest on Facebook (the ones who know sweet FA about railways) appear to be the "travel once a year but only if I can get an Advance ticket for £3.50" brigade so I wouldn't be to worried.

 

[junglejames]

A comment from FB:



I was going to reply but it's easier to pander to ignorance.

Wow. What FB page was that on?
Now we know why they have 100,000 votes. People who know absolutely nothing, who will then go and tell their friends. These people would be dangerous if they had any power.

 

[jon0844]

Fortunately they think being popular on Facebook or Twitter means something.

Too many people trying to change the world without doing the hard work of trying to action change the proper way.

 

[Whistler40145]

Well, I don't believe in either Facebook or Twitter.

 

[Lampshade]

Wow. What FB page was that on?

It wasn't, a friend (in the Facebook sense) posted it.

 

[PaxVobiscum]

Well, I don't believe in either Facebook or Twitter.

Oh, I assure you they do exist but I don't use them either.

 

[Helvellyn]

This is classic Richard Branson. He plays a certain line in the media, that has absolutely no chance of coming off, yet it's spun in such a way that the innocent/ignorant buy it and the competitor on the receiving end can usually do very little to try and counter, as they need to use detail to counter Branson's one-liner.

You only have to look at the decision of British Airways to retire Concorde. BA had been spending millions to upgrade the aircraft following the Air France Paris crash (kevlar lining to the fuel tanks, new reinforced tyres, refurbished interiors) but Airbus decided they weren't going to continue supporting the aircraft. Air France and BA pretty much had to call it a day. Yet Branson walked on and said BA was withdrawing an icon, and that it should hand over the aircraft for £1 each, the price BA had supposedly paid. Nice headline, and cue BA having to come out with the technical explanations (withdrawal of manufacturer's support to maintain airworthiness of the aircraft) and the financial situation of the 1980s (UK Government wrote off Concorde's development costs, and sold the last two aircraft that nobody wanted to BA for a nominal £1 fee, but ignored the fact that BA had still outlaid millions over the years on the 7 aircraft). It never had a chance in hell of coming off, but Branson pitched himself as the saviour of a British icon from unfeeling, corporate BA.

Branson knows there's not a chance in hell the DfT will reopen the bidding for the WCML, as it would throw the whole franchise process into a mess if DfT said they got it wrong (cue challenges each time other companies lose, or fail to win, a bid). I'm sure First Group would also launch a challenge in the courts. Virgin Rail is dead, but Branson is now milking this for the publicity for Virgin Group as a whole, the consumer's champion who has been hard done by yet again by greedy government and big business.

Lets get the contract with First signed, and move on. Let the new regime set out its stall, start working to win over the passengers (heck, if First perceive that Virgin have a loyal following then surely they are going to go all out to win them over?) and importantly let them start working to the takeover day and build a new relationship with the many employees they will take on from Virgin under TUPE rather than leave those hard working railway men and women in limbo wondering what's going to happen next.

 

[Whistler40145]

Well said Helvellyn. I totally agree with you. It's forwards we're going.

 

[Masboroughlad]

Shows even more the shambolic inadequacies of how the railway was first privatised in 1990s.

It needs a massively radical approach to changing it, not tinkering like is being done. Letting contracts is hardly ground breaking.

 

[90019]

Shows even more the shambolic inadequacies of how the railway was first privatised in 1990s.

It needs a massively radical approach to changing it, not tinkering like is being done. Letting contracts is hardly ground breaking.

What? :?

 

[Metroland]

These people would be dangerous if they had any power.

So you would take their votes away from them (or anyone else for that matter) because they don't know enough about running the NHS, maintaining the roads, policing, social policy, housing and all the rest and you disagree with them?

This whole debacle throws up exactly why rail privatisation is a joke.

The DFT are running the show, specify basic timetables, service delivery levels, appoint people to deliver the day-to-day service in secret with little or no public consultation. There is far more government control than BR ever had, costing far more public money too.

It's fairly sad some people here are rubbishing people that sign petitions as 'sheep'. Completely missing the point that the Government want to squeeze as much out of these sorts of franchises as possible as a matter of ideological policy, and as a rail passenger you should be concerned about that.

Essentially all the franchises are IS a PR and marketing tool - pretty liveries and station colours, uniforms, advertising and PR machines with the promise of a cut of the profits for delivery a day-to-day service often set in stone by third parties.

There have very little control over very much - in fact essentially a bunch of contracts - tend to inherit most of their staff, have their trains in many cases maintained by train builders, they don't own the trains, and most of their performance depends on the "rules of the route" and Network Rail and have to follow pre-determined group standards. Many of them aren't in the business long enough to invest much of their own money and are simply a front to wider policy objectives by the DFT and the Government of the day, without the political risk.

 

[ainsworth74]

So you would take their votes away from them (or anyone else for that matter) because they don't know enough about running the NHS, maintaining the roads, policing, social policy, housing and all the rest and you disagree with them?

There is a difference between voting for someone to make those decisions for you and allowing the people to directly make decisions on matters which they have limited knowledge. I would be wary about allowing people to vote directly on matters affecting the NHS (for example I'm not sure it would be wise to hold a public vote on the NHS budget or where they should build a new hospital).

 

[calc7]

Your logic is a bit off there.
If 1 or 2% decide to stop travelling in the first year, then that will hit the first years growth figures.
But after that, they make no difference to the growth figures because they were accounted for in the first year. Yes they would hit overall passenger figures (barely) but not growth figures (as again that essentially negative growth was accounted for in the first year).

Is it that inconceivable that just 1%pa of the "Virgin Fanatics" will travel less/drive/take another route due to the First operation? There's nothing to say this loss of brand loyalty can't be compounded.

Yes, I'm pro-Virgin and playing devil's advocate here, but I don't think it's as simple as "all the posh Cheshire folk travelling in November will be travelling in January". First only have to cheese off a very small fraction and their growth target is jeopardised!

 

[Metroland]

There is a difference between voting for someone to make those decisions for you and allowing the people to directly make decisions on matters which they have limited knowledge. I would be wary about allowing people to vote directly on matters affecting the NHS (for example I'm not sure it would be wise to hold a public vote on the NHS budget or where they should build a new hospital).

No but you do have a choice who to vote for on a number of policies that YOU think are best for the country even though YOU might have very limited knowledge on that subject. I mean 'You', in general terms not you personally.

For example a person might vote for a party that wants to privatise the NHS, but they are most certainly not an economist or an expert on social policy or would only be able to tell if that was a good policy on the very basic knowledge or more often that not personal ideology. In the latter case, you might believe private companies or more efficient than the 'lazy public sector', and don't like free healthcare at source. You might believe people should pay for their own care though an insurance.

I'm sorry, but petitions, discussion, media, and protests are democracy in action. It is the height of arrogance to suggest that people expressing an opinion through a petition are idiots because you don't agree with them.

In fact, looking through this forum, most of the anti-Virgin arguments seem to boil down to 'I don't like Branson'.

 

[The Planner]

Would be interesting to know if the bidders factor in payments coming back to them for when the infrastructure sits down in their figures, I'd bet they would stand to lose a fortune if NR ran it fault free for a significant period of time. Makes you wonder if a lower PPM actually benefits them.

 

[WelshBluebird]

Is it that inconceivable that just 1%pa of the "Virgin Fanatics" will travel less/drive/take another route due to the First operation? There's nothing to say this loss of brand loyalty can't be compounded.

Yes, I'm pro-Virgin and playing devil's advocate here, but I don't think it's as simple as "all the posh Cheshire folk travelling in November will be travelling in January". First only have to cheese off a very small fraction and their growth target is jeopardised!

Yes it is that inconceivable. Because it would not happen every year!
The first year, maybe (although I don't actually think it will).
But surely by the time you get to the second year, everyone who would have boycotted it would already have anyway? The people who just travel a couple of times a year (so would not be accounted for in the first year) wouldn't give that much of a damn about what company runs their trains - they certainly wouldn't boycott it! So you aren't going to be losing any more customers in the second year.
So its not 1% pa, its just 1% in the first year.

 

[HH]

Your logic is a bit off there.
If 1 or 2% decide to stop travelling in the first year, then that will hit the first years growth figures.
But after that, they make no difference to the growth figures because they were accounted for in the first year. Yes they would hit overall passenger figures (barely) but not growth figures (as again that essentially negative growth was accounted for in the first year).

They hit the growth on growth, which adds up too, but yes the majority is just that the base is down, but that means every year's income is down. 1% may not seem a lot but that is a hit that goes straight to the bottom line. First bid a 5% EBIT, so a 1% loss of revenue would be 20% of their profit gone. A 2% drop would be 40% of it gone.

 

[David10]

Would be interesting to know if the bidders factor in payments coming back to them for when the infrastructure sits down in their figures, I'd bet they would stand to lose a fortune if NR ran it fault free for a significant period of time. Makes you wonder if a lower PPM actually benefits them.

Was one of the excuses trotted out by GNER for its problems after NR got its act together on the East Coast. Any franchise banking on PPM revenue to balance the books is asking for trouble.

 

[IanXC]

Is that the sound of a bandwagon I hear...?

Labour is urging ministers to delay signing a new West Coast Mainline contract until Parliament returns.

The party says MPs must have the chance to consider the decision to take the franchise from Virgin Trains and give it to FirstGroup for the next 13 years.

http://www.bbc.co.uk/news/uk-politics-19388309

I hope the DfT keep there nerve and stick to what they are currently saying:

"We note the offer that one of the bidders appears to have made via the press.

"However, the winning bidder was decided by a fair and established process and no reason has been advanced to convince DfT not to sign the agreement."

Who knows what will happen if they cave in.

 

[WatcherZero]

Is that the sound of a bandwagon I hear...?

http://www.bbc.co.uk/news/uk-politics-19388309

I hope the DfT keep there nerve and stick to what they are currently saying:

"We note the offer that one of the bidders appears to have made via the press.

"However, the winning bidder was decided by a fair and established process and no reason has been advanced to convince DfT not to sign the agreement."

Who knows what will happen if they cave in.

Yep Labour has joined on the bandwagon of several Cabinet members privately calling for a postponement including the PM and Cable, reportedly its only defenders in Cabinet now are Greening and Osborne.

 

[PR1Berske]

Labour are "doing a Branson", more so to a degree because they know the contract will be signed before they can get the issue on the order paper.

 

[Masboroughlad]

I have to say, IF it is a fair decision, the secrecy should go and all bids be made open and available for scrutiny. It does is all seem too secretive and cloak and dagger.

 

[EM2]

I have to say, IF it is a fair decision, the secrecy should go and all bids be made open and available for scrutiny. It does is all seem too secretive and cloak and dagger.

Well so far, Virgin have refused to release any details of this 'more deliverable' bid.

 

[PR1Berske]

From the Independent today

Prime Minister David Cameron must intervene in the row over the new West Coast Mainline contract to “get some sense” into the Department for Transport over the controversial deal, Sir Richard Branson urged today.

The Virgin boss has offered to effectively run the route for free to allow the decision awarding the 13-year franchise to FirstGroup to be re-examined.

It comes as Labour today urged Transport Secretary Justine Greening not to sign off the contract until MPs have been able to scrutinise it in detail.

More than 100,000 members of the public have also signed an online petition against the decision, in a campaign supported by double Olympic champion Mo Farah, Apprentice star Lord Sugar and celebrity chef Jamie Oliver.

Sir Richard, who has claimed that FirstGroup's bid will lead to "almost certain bankruptcy", said Virgin Trains and Stagecoach would operate the joint venture on a not-for-profit basis or donate profits to charity if the franchise needed to be extended beyond December for a few months to allow Parliament to investigate the decision.

"I think that the person that can really intervene to try to get some sense into the Department for Transport is the Prime Minister and the Prime Minister is currently on holiday, the Chancellor is on holiday and we would like things delayed by a month or so," he told BBC Radio 4's Today programme

"If, as a result of that, it means that the handover is delayed we would obviously be very happy to run it on a not for profit basis."

Labour said MPs had been denied the chance to raise concerns about the deal because it was announced during the Commons summer recess.

In a letter to the Transport Secretary, shadow transport secretary Maria Eagle wrote: "The decision appears almost exclusively a 'bottom line' one, driven by a particularly high pledge of payments to Government.

"First Group's successful bid of £5.5bn was significantly higher than any other bid, including the £4.8bn offered by the incumbent.

"You will know of the history of franchise contracts being brought to an early end, at least in part because of over-ambitious payment promises that proved impossible to realise. There are fears that lessons have not been learnt."

Ms Eagle also warned about the impact on fares and levels and quality of services and the possibility of First cutting short the contract.

She added: "Due to the wide-ranging nature of these concerns, I would therefore urge you to delay any signing of this contract until after you have made the statement to parliament - a statement I'm sure you will agree is appropriate for such an important and contentious decision."

FirstGroup claims it will deliver better value for taxpayers. It plans major improvements to the InterCity West Coast franchise to enhance the customer experience, including improved wifi and catering, as well as additional services and more seats and reducing standard anytime fares by 15 per cent on average.

Bob Crow, leader of the RMT transport union, said: "The shambolic handling of the West Coast franchise has not only left 800 of our members' jobs hanging by a thread but has also exposed the chaos right at the heart of the Transport Department and the insanity of government rail policy which revolves around a poisonous cocktail of cuts, fare increases and private profits. The only sensible solution is renationalisation if we are to avoid the anarchy of an action replay of the east coast route collapse."

PA

 

[SkinnyDave]

A very naive question here but would nationalising the Intercity routes similar to East Coast not be a bigger money earner for the Government than these shenanigans?
SNCF and Abellio do a decent job of it in their respective countries

 

[David10]

Bob Crow has managed to ignore First's answer on employment levels when they stated they would be broadly flat.:roll:

 

[tbtc]

I have to say, IF it is a fair decision, the secrecy should go and all bids be made open and available for scrutiny. It does is all seem too secretive and cloak and dagger.

I'm sure all the bids will be made available, but at the moment nothing has been signed so presumably there's some confidentiality in place.

It does seem a little hypocritical for the Virgin people to demand all of First's plans are scrutinised openly when (as EM2 says) Virgin haven't released their bid yet.

Presumably, as it was "more deliverable" it was "less risky" so was "less ambitious" - I'd be interested to see how it compares, and I'm sure we will find out how they compare soon (once the contract has been awarded to First).

 

[Masboroughlad]

I have to say, IF it is a fair decision, the secrecy should go and all bids be made open and available for scrutiny. It does is all seem too secretive and cloak and dagger.

Well so far, Virgin have refused to release any details of this 'more deliverable' bid.

Think all bids should go on the table now. By DfT. That would give their decision justifiable credibility. Why can't they be made to show them under the law that can make such info be put in public domain?

 

[David10]

A very naive question here but would nationalising the Intercity routes similar to East Coast not be a bigger money earner for the Government than these shenanigans?
SNCF and Abellio do a decent job of it in their respective countries

Renationalisation would mean the railway debt (which is quite substantial) would end up on the public sector balance sheet. The privatisation laws prohibits UK government or government bodies bidding to run franchises, although obviously doesn't exclude those of other countries

 

[Wath Yard]

A very naive question here but would nationalising the Intercity routes similar to East Coast not be a bigger money earner for the Government than these shenanigans?
SNCF and Abellio do a decent job of it in their respective countries

Considering the DfT already have a ready made TOC in DOR, personally I would like them to be able to bid, even if only to set a baseline to judge other bids against to ensure tax payers aren't being ripped off by the other bidders. However, politically is it impossible for that to happen. It would effectively be an admission that privatisation isn't working and the private sector can't be relied upon to deliver benefits.