GWR compensation scheme

[BestWestern]

Network Rail pays the TOC for an incident, such as a person hit by train. TOC does not pay delay claims to passengers.

Network Rail does not pay the TOC if a mechanical fault stops the train running. TOC has to pay delay claims to passengers.

There are a great many costs involved for a TOC when a fatality happens. Crews are displaced, trains are displaced, there is overtime galore to be paid, there will likely be additional traffic such as extra services or empty stock moves needed, passengers may require additional measures such as taxis or replacement transport to be organised, there are numerous 'behind the scenes' measures like delivering chain of care to affected staff which absorb a good deal of management and control centre manpower, and of course there is a train out of service and very possibly damaged and unavailable for service for the next few days. Anybody who's seen the front of an HST after a fatality at full pelt will tell you that rather more than a quick hose down and run through the wash is required before it will be fit for service again. The expense to a TOC is enormous!

 

[JN114]

The expense to a TOC is enormous!

And that’s before it comes to “compensating” everyone delayed by such an incident - which can be tens of thousands of people if it happens at peak time - despite the TOC having no control over when it happens.

That is why compensation arrangements are negotiated as part of the franchise contract; and anticipated costs therein are factored into bids. Because the GW franchise is now so old (into 11th year with at least another 3 or 4 to go) it has the older-style compensation arrangements. I fully expect Delay Repay to be a part of the next franchise, if indeed its introduction isn’t negotiated beforehand.

 

[Haywain]

Because the GW franchise is now so old (into 11th year with at least another 3 or 4 to go) it has the older-style compensation arrangements.

However, it hasn't been a 'normal' franchise for some time, so there is no reason that the DfT could not have enforced introduction of Delay Repay. And a new franchise isn't going to happen until at least 2020, or later as some of the more informed railway press expect.

 

[JN114]

However, it hasn't been a 'normal' franchise for some time, so there is no reason that the DfT could not have enforced introduction of Delay Repay. And a new franchise isn't going to happen until at least 2020, or later as some of the more informed railway press expect.

The franchise has been extended on a broadly similar payments regime each time - reportedly lower than the original proposed premium extension First turned away from a few years ago - but similar nonetheless. Any introduction of a more rigorous compensation scheme would incur a higher cost to First than specified in the contract. I suspect any imposition by the DfT would result in a legal challenge for changing terms of the contract - that’s why it won’t have been done thus far.

 

[Haywain]

The franchise has been extended on a broadly similar payments regime each time - reportedly lower than the original proposed premium extension First turned away from a few years ago - but similar nonetheless. Any introduction of a more rigorous compensation scheme would incur a higher cost to First than specified in the contract. I suspect any imposition by the DfT would result in a legal challenge for changing terms of the contract - that’s why it won’t have been done thus far.

Which is exactly why I blame DfT. They have had the opportunity on each occasion to bring the compensation scheme in line with other franchises and have declined to do so. First Group agree the terms each time, they don't have to but they choose to. It's about negotiation and DfT are firmly to blame for this.

 

[BestWestern]

Which is exactly why I blame DfT. They have had the opportunity on each occasion to bring the compensation scheme in line with other franchises and have declined to do so. First Group agree the terms each time, they don't have to but they choose to. It's about negotiation and DfT are firmly to blame for this.

However, if they attempt to force it and First don't want to play, the DfT is left with a headache. We've already had some silly political decision making at SWT for pretty much the same reason, perhaps DfT didn't fancy playing the same game all over again so soon?

 

[Haywain]

You are missing the point. At each of the times that DfT have negotiated a continuation/extension of the franchise/management contract it is witihin their power to specify the terms and negotiate a deal that is good for not just the DfT and First but also the travelling public. Nobody forces the status quo to continue, other than DfT.

If First are told "do delay repay" they will come back to DfT with a cost. DfT either don't tell them to do it or don't accept the cost.

 

[JN114]

You are missing the point. At each of the times that DfT have negotiated a continuation/extension of the franchise/management contract it is witihin their power to specify the terms and negotiate a deal that is good for not just the DfT and First but also the travelling public. Nobody forces the status quo to continue, other than DfT.

We’re not privy to those negotiations - a very small number of people get to see the minutiae of those discussions. The DfT may have tried; and not been willing to “pay” (through reduced premiums) for its implementation. Delay Repay isn’t a new thing, I doubt it hasn’t at least been on the table before but First/DfT can’t agree a price. By all accounts the DfT makes money from the GW franchise, perhaps they weren’t happy with the dent in their profits. What’s the greater public interest? Reducing government subsidy to the railway industry as a whole, or standardising compensation regimes.

Believe me I’d rather the latter; but it would have to be at the right price not to adversely afflict the former.

 

[Starmill]

Believe me I’d rather the latter; but it would have to be at the right price not to adversely afflict the former.

Demonstrably the 'price was right' with the new contract at SWR for 15 minute Delay Repay to be introduced, although it was phased in and did not apply from changeover day. Northern and TransPennine also had their previous compensation schemes replaced with the standard Delay Repay offering on their changeover day. GTR changed to 15 minute Delay Repay mid way through at a random date. West Midlands Trains moved over to offering it from their changeover date.

This suggests that a proper re-franchising does result in the price being appropriate, but the DfT's chosen extensions for Great Western do not stretch to this.

 

[bb21]

The "15-minute Delay Repay" was brought in more as a "quick win" than anything else, amid the ongoing saga of the Southern dispute. Excellent way to divert attention from what is going on.

That of course then meant the whole timetable of getting all TOCs onto the standard "30-minute Delay Repay" is completely messed up.

It really wasn't about giving passengers the best deal, as otherwise they wouldn't have bothered with a stepped process with SWR. Why would you introduce all the complexity and inevitable confusion?

PR is obviously more important to the DfT than consistency and genuine simplification.

 

[BestWestern]

You are missing the point. At each of the times that DfT have negotiated a continuation/extension of the franchise/management contract it is witihin their power to specify the terms and negotiate a deal that is good for not just the DfT and First but also the travelling public. Nobody forces the status quo to continue, other than DfT.

If First are told "do delay repay" they will come back to DfT with a cost. DfT either don't tell them to do it or don't accept the cost.

However you consider the negotiations might take place, the point is that if the TOC doesn't want to meet DfT's desired price, DfT is left with a rather stark choice - give in and go cheaper, or re-let the franchise. Stagecoach clearly wouldn't meet their price at SWT, and so they went for the re-letting option. That was a prime franchise and attracted only two bidders. Stagecoach were out for political reasons, so it was a one horse race. Not great on the competition front. GWR is in the midsts of a range of messy and changeable projects (including a fleet of Class 802s being procured by Firstgroup themselves), it will be a significantly more attractive prospect in a few years time when it's finished. It is entirely possible that the DfT simply doesn't want to end up in a corner and so is making any renegotiations intentionally painless and simple, to avoid any outcome other than the current operator carrying quietly on.

 

[island]

The franchise has been extended on a broadly similar payments regime each time - reportedly lower than the original proposed premium extension First turned away from a few years ago - but similar nonetheless. Any introduction of a more rigorous compensation scheme would incur a higher cost to First than specified in the contract. I suspect any imposition by the DfT would result in a legal challenge for changing terms of the contract - that’s why it won’t have been done thus far.

I posit that GWR is run mainly for the benefit of Reading commuters, who much prefer the current discount system that rewards the frequent 10-15 minute delays which DelayRepay does not.