FirstGroup vies with Virgin in west coast rail bidding war

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FManc

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Article on the Guardian's website today (15/07/12)......
I think we've got to take everything with a pinch of salt at the moment. There seems to be so many rumours at the moment and there's only going to be more over the next 4 weeks but still interesting nonetheless.


http://www.guardian.co.uk/business/2012/jul/15/firstgroup-west-coast-franchise-virgin?newsfeed=true

Dan Milmo said:
FirstGroup vies with Virgin in west coast rail bidding war

FirstGroup has emerged as a frontrunner for the multibillion-pound west coast rail franchise alongside incumbent Virgin Trains, with the contest now a two-horse race between the experienced operators.

Aberdeen-based FirstGroup is vying with Virgin despite announcing last year that it is handing back its Great Western rail contract three years ahead of schedule, avoiding more than £800m in payments to the government.

The Department for Transport is expected to bank a considerable windfall from the new 14-year west coast contract, with Virgin currently paying an annual premium of about £150m to the state. Both bidders are expected to promise an even bigger number over the life of the new franchise. The winner is expected to be announced next month.

It is understood that FirstGroup and Virgin are still in talks with the DfT, but two foreign-owned bidders on the four-strong shortlist are no longer considered likely contenders. They are a joint venture between public transport operator Keolis and SNCF, the French state rail group, and a bid from Abellio, which is controlled by the Dutch national rail operator.

SNCF had been hoping to use west coast as a bridgehead into the UK rail market but is now expected to focus on the prestigious, if perennially troubled, east coast franchise that runs from London to Edinburgh.

According to one rumour circulating within the rail industry, the SNCF bid considered using extended Pendolino trains that would be longer than station platforms in some cases. This would require passengers to shuffle down the train in order to alight at certain stops – a process known as selective opening. It is not known, however, whether selective opening formed a serious part of SNCF's pitch for the route.

The west coast route, which runs from London to Glasgow via Birmingham and Manchester, is already undergoing an expansion. By the end of the Virgin contract in December, it will have 35 trains made up of 11 Pendolino carriages, with a further 17 trains made up of nine carriages.

The franchise carried 30 million passengers last year and the contest between FirstGroup and Virgin is thought to be close. Industry sources expect FirstGroup to offer a slightly higher premium number, based on its strong record on cost management, while Virgin is expected to emphasise passenger growth and service.

Both contenders have reportedly considered tough cost-cutting measures. According to the RMT trade union, some bidders have been mulling changes to onboard services, which could see the removal of catering and onboard shops, threatening up to 800 jobs, although Virgin is thought to be considering less severe changes.

RMT general secretary, Bob Crow, said: "It is disgraceful that bidders for the prestige west coast route are looking at ripping out catering and shop facilities to cram in extra seats so that they can jack up profits at the price of both jobs and passenger service, and we are calling for this scandalous suggestion to be killed off right now."

FirstGroup's chances have not been endangered by its early exit from the Great Western franchise, which runs from London Paddington to Wales, the West Country and the Thames Valley. The group had arranged a clause in the £1.1bn contract that allowed it to walk away three years ahead of schedule, ensuring it could end the franchise early without legal redress.

If it wins the west coast franchise, FirstGroup could become a dominant player in the UK rail industry. It already operates the First Capital Connect, Scotrail and First TransPennine franchises and is shortlisted for the Thameslink and Essex Thameside franchises, as well as the successor to the Great Western contract that it is relinquishing.

The DfT, mindful of the plight of the east coast franchise, after National Express reneged on a £1.4bn contract, is understood to be seeking beefed-up insurance policies from west coast bidders. This could include a large "performance bond" that will be paid out if there is a default.

Another possibility is a cross-default clause, which would see an operator forced to hand over other rail contracts if their franchise goes sour. Virgin Rail Group is co-owned by Stagecoach, the public transport operator, and Sir Richard Branson's Virgin empire.
 
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scotsman

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There's only one company I want to run the WCML, and I imagine it's the same opinion of most of Virgin Trains' staff at the moment.

As an aside, you really have to admire the RMT PR machine - they may not always get positive coverage, but they really do manage to get into everything
 

tbtc

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you really have to admire the RMT PR machine - they may not always get positive coverage, but they really do manage to get into everything

Is Crow in competition with Nigel Farage for who can get the most "I'm shocked and outraged, but I don't know the details" quotes into the press. I'm sure it helps him feel like a "personality" but I;m not sure what practical help it is to the railways.

I wonder how long it'll be until the first "Operator X can't get Franchise Y because they already operate Franchise Z" comment?
 

scotsman

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Is Crow in competition with Nigel Farage for who can get the most "I'm shocked and outraged, but I don't know the details" quotes into the press. I'm sure it helps him feel like a "personality" but I;m not sure what practical help it is to the railways.

I seriously doubt Bob Crow is that (if much at all) egotistical. The fact is that he's 1) The leader of the union; 2) Very good at dealing with the media.

It seems that the RMT's strategy is to come across as on the side of passengers, given that a lot of commuters hate them for daring to disrupt their journeys into work.
 

SkinnyDave

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No wonder I'm not a betting man I had a feeling SNCF might have got it.
Virgin or First would make a good go of it I think
 

tbtc

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I seriously doubt Bob Crow is that (if much at all) egotistical. The fact is that he's 1) The leader of the union; 2) Very good at dealing with the media.

It seems that the RMT's strategy is to come across as on the side of passengers, given that a lot of commuters hate them for daring to disrupt their journeys into work.

Maybe it was someone else I saw on Have I Got News For You?

Some Unions manage to do a lot of effective work behind the scenes, rather than the "rentaquote" approach that Mr Crow seems to favour.
 

HSTEd

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Well... First always seem to start serving tea from styrofoam/paper cups from their franchises.... so I hope they don't get it.

Although I don't like Virgin much either.
 

317666

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I hope Virgin keep it, I think they do a superb job at the moment. Ok, the walk-up fares may be expensive, but as I always book in advance when travelling long distances that doesn't make a difference to me.
 

A0wen

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Personally, I hope it isn't First that win. I'm not a fan of Virgin, but experience of First has always been worse.

And I maintain they only got Scotrail because of political machinations by the Labour party - so they don't deserve to be in a leading position with rail franchises.

As for this nonsense by Bob Crow

"RMT general secretary, Bob Crow, said: "It is disgraceful that bidders for the prestige west coast route are looking at ripping out catering and shop facilities to cram in extra seats so that they can jack up profits at the price of both jobs and passenger service, and we are calling for this scandalous suggestion to be killed off right now."

So, passengers are going to be against having more seats on a train? Given how many end up standing, I think he's misunderstanding what most passengers would rather have - given the choice between a better chance of a seat or a ****-poor cup of overpriced coffee and sandwich, I'd go for the seat any day - I can bring better quality, cheaper food with me.
 

317 forever

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Personally, I hope it isn't First that win. I'm not a fan of Virgin, but experience of First has always been worse.

And I maintain they only got Scotrail because of political machinations by the Labour party - so they don't deserve to be in a leading position with rail franchises.

As for this nonsense by Bob Crow

"RMT general secretary, Bob Crow, said: "It is disgraceful that bidders for the prestige west coast route are looking at ripping out catering and shop facilities to cram in extra seats so that they can jack up profits at the price of both jobs and passenger service, and we are calling for this scandalous suggestion to be killed off right now."

So, passengers are going to be against having more seats on a train? Given how many end up standing, I think he's misunderstanding what most passengers would rather have - given the choice between a better chance of a seat or a ****-poor cup of overpriced coffee and sandwich, I'd go for the seat any day - I can bring better quality, cheaper food with me.

I have found it awkward that Cross Country no longer serve drinkable coffee. I sometimes travel via Virgin Trains and London for better coffee. That said, much as I like Virgin Trains coffee, I can manage without for 2 hours, especially now that a Pret-a-Manger has opened at Euston! There is also one at Manchester Piccadilly station now too.
 

scotsman

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And I maintain they only got Scotrail because of political machinations by the Labour party - so they don't deserve to be in a leading position with rail franchises.

Have you any evidence at all to back this up?

I'm expecting a BBC News story surrounding a man with a surname who shares a namesake with a US city to be quoted...
 

MidnightFlyer

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Is Crow in competition with Nigel Farage for who can get the most "I'm shocked and outraged, but I don't know the details" quotes into the press. I'm sure it helps him feel like a "personality"

<OT> Quite clearly Crow wins as Farage does nothing of the sort </OT>
 

WatcherZero

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There is something to be said for the fact that less waiting on stations (due to higher frequency) and less on trains (faster journeys) negates the need for onboard catering. I would only really expect onboard food nowadays if the journey crosses two meal times and with better connections and faster journeys that is rarely happening for me nowadays.
 

tbtc

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There is something to be said for the fact that less waiting on stations (due to higher frequency) and less on trains (faster journeys) negates the need for onboard catering. I would only really expect onboard food nowadays if the journey crosses two meal times and with better connections and faster journeys that is rarely happening for me nowadays.

On the West Coast franchise I can see the need for catering on London - Glasgow. But if people cannot cope without a proper meal on the journey from London to Birmingham/Manchester (an hour or two) then I'm not convinced that we should be giving up lots of potential seats to cater to their hunger.

A full buffet/restaurant service made sense a generation ago when there weren't dozens of "food" places competing for your attention on high streets/ train stations.
 

HSTEd

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You won't save that many seats though, and what happens when a set fails and all the diagrams get torn up.
 

giblets

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"It is disgraceful that the winners for the prestigious west coast route are jacking up profits at the price of both jobs and passenger service with overpriced catering and shop facilities, leaving passengers to stand in dangerous and overcrowded trains, we are calling for this scandalous practice to be killed off right now."

said Bob Crow in 2013....
 

cle

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On the West Coast franchise I can see the need for catering on London - Glasgow. But if people cannot cope without a proper meal on the journey from London to Birmingham/Manchester (an hour or two) then I'm not convinced that we should be giving up lots of potential seats to cater to their hunger.

A full buffet/restaurant service made sense a generation ago when there weren't dozens of "food" places competing for your attention on high streets/ train stations.

I agree to a certain extent - but don't the 11 car sets on the 1tph routes mitigate this somewhat?

Also they need the space for prep of first class goodies, which is absolutely needed to compete with planes - most important on Manchester and Glasgow routes.

And Euston's offering is still pretty grim compared to St Pancras or the new Kings Cross - not including the rather brilliant Eat Street up towards the canal!
 

Schnellzug

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How's that for biased phraseology from the Guardina?

"Aberdeen-based FirstGroup is vying with Virgin despite announcing last year that it is handing back its Great Western rail contract three years ahead of schedule, avoiding more than £800m in payments to the government."

these Fat Cat Transport Chiefs, they're as bad as Jimmy Carr! :roll:

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


I seriously doubt Bob Crow is that (if much at all) egotistical. The fact is that he's 1) The leader of the union; 2) Very good at dealing with the media.

.

Is he really? he's very good at getting into the media, and perhaps at getting the media to report what he says unquestioningly, but so much of he says is just wrong. Remember "the Government will be dragging unsafe relics out of the sidings to cope during the okympics, as Transport Chiefs push the panic button", which was actually nothing at all to do with the story he was Outraged about, and was just plain wrong in any case.
 
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Aictos

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I don't think First would be too bad, it's the same staff at the end of the day and after turning their Great Western franchise into the success it is today I think they have just as much chance of winning as Virgin as in retaining the franchise.

The most important thing for any successful bidder is to deliver improvements not just to the trains but to the stations, Preston for one isn't as good as it could be.

I don't want to see Virgin win on the basis that the winner should be anyone but First as that simply is unjust and bias on the same account I don't want First to win simply to kick Virgin out.

And another thing while one TOC's management might not be effective, another TOC's management within the same group might be very successful and popular.

As a example, let's take C2C vs National Express East Anglia - easy to see the differences in management ain't it!
 
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If this guardian article is to be believed then it does make a mochery of the fact the bids are supposed to be 'blind', which i always thought was boll#cks anyway.
 

VTPreston_Tez

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To be fair any of these two companies getting ICWC will be enough persuasion for me to move down south sooner.
I'm still hoping for SNCF, they have a lot of experience and lots of potential on new ground (and I really want the SNCF chime at PRE)
 

scotsman

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The Guardian has produced no evidence to support their claims, so this article is, at best, speculation and nothing more
 

142094

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RMT is probably the best union out there for getting results for its members, and that is what it is supposed to do.
 

Pumbaa

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The Guardian has produced no evidence to support their claims, so this article is, at best, speculation and nothing more

I'd be surprised if they did. The industry is a very leaky one. One of the remaining bidders for WC is on a final warning from DafT about publicising their plans for the upcoming franchise - it annoyed Marsham St greatly. If the Gruaniad was to reference their sources, I'd imagine lots of bricks in various tonnages would be released from height onto various parties.

There is a lot of hearsay rumbling around at the moment - some more believable than others, and some is certainly believed to be the case having been confirmed off the record by various companies involved with the bids.

Points of interest so far:

- one bidder proposed through trains to the continent.
- two bidders proposed to replace the 221s in 2016 using different products, one bidder wanted them to remain. The two remaining bidders have different ideas as to what should happen with the 221 fleet.
- one of the remaining bidders does advocate an almost complete withdrawal and downscaling of the current catering offer.
- neither of the remaining bidders proposed ordering additional cars to lengthen the remaining 390s to 11 cars.

- finally clarification is being sought for on many aspects of one of the bids, which is generally a good indication that the bid is favourable. If the railway journos and insiders are correct with their carpark watching, that bid is not that of the incumbent operator.

Usual disclaimers apply, if you want the info first hand then get chatting to the people in the know.
 

HH

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So, adding 2 and 2 and making 6, First are downscaling the catering, replacing the 221s (rumour was someone was doing it with Hitachi and First have contacts there), and are winning. It sounds like a First approach, and it would have been hard to beat Virgin on revenue, so looks like they went for cost.

Running to continent would have been non-compliant AFAIK; maybe SNCF/Keolis were kicked out?
 

WatcherZero

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Partial corroboration of the Guardian story has come from Alstom with them confirming the catering options being discussed.
 

rail-britain

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Running to continent would have been non-compliant AFAIK; maybe SNCF/Keolis were kicked out?
Why would a new train capable of running through the Channel Tunnel, not be able to operate along the West Coast Main Line?
 

Schnellzug

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Running to continent would have been non-compliant AFAIK; maybe SNCF/Keolis were kicked out?

Why would a new train capable of running through the Channel Tunnel, not be able to operate along the West Coast Main Line?

Beause it would be innovative and imaginative, and therefore the Ministry would never consider such a thing, when the only thing that is important is to do everything as cheaply as possible.
 
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