If we leave the EU what impact will it have on franchising?

Status
Not open for further replies.

Masboroughlad

Established Member
Joined
2 Mar 2011
Messages
1,487
Location
Midlands
If we leave the EU, what impact will it gave on EU countries owning UK franchises - current and future? Or will it make no difference?
 
Sponsor Post - registered members do not see these adverts; click here to register, or click here to log in
R

RailUK Forums

najaB

Veteran Member
Joined
28 Aug 2011
Messages
23,984
Location
Scotland
If we leave the EU, what impact will it gave on EU countries owning UK franchises - current and future? Or will it make no difference?
Current: little to no impact. Future: depends what trade agreements are negotiated. It could make no difference, or make it impossible.
 

aformeruser

Veteran Member
Joined
23 Jan 2009
Messages
30,636
Well GNER operated a franchise with an American parent company so I don't think TOCs with a German or French parent would end as a result of leaving the EU.
 

Domh245

Established Member
Joined
6 Apr 2013
Messages
7,688
Location
nowhere
It might remove the need for new rolling stock to be put out for tender?
 

rf_ioliver

Member
Joined
17 Apr 2011
Messages
659
If we leave the EU, what impact will it gave on EU countries owning UK franchises - current and future? Or will it make no difference?

Probably nothing at all. EU countries don't own any franchises but if you mean non-UK companies, then it gets complicated as to what constitutes a non-UK company. For example, DB Cargo UK *is* a UK company according to UK law. I notice that DB Cargo UK owns Euro Cargo Rail - a *French* rail freight company.

If you mean "state-owned" companies running UK franchises, then it is pretty much the same above.

BUT, remember under EU law, the UK and any company in the UK is entitled to exactly the same rights as any other EU company. Whether a country takes advantage of those rights is another matter altogether. If Germany decided to invest in DB leading to the situation where DB also runs most of Europe's rail freight, then well done Germany - the UK could have done exactly the same.

Actually, which UK companies run rail services (freight, infrastructure etc) in the other EU countries?

(NB: gross simplification below!)

The way a country organises its rail system, eg: as the UK did into franchises, is purely a local decision. The EU decided (actually all 28 countries individually agreed and MEPs voted on, an MPs in each country ratified) that infrastructure should be accounted differently from rollingstock/operations to provide transparency for competition and safety.*

t.

Ian
 

Rich McLean

Established Member
Joined
6 Feb 2012
Messages
1,610
It might remove the need for new rolling stock to be put out for tender?

Rolling stock should still be put out to tender in order to obtain a competitive price, which I don't think will change either. By obtaining at least 3 different quotes gives value for money for the taxpayer.

If they don't let it go out to tender, then it encourages companies to fleece the taxpayer. If putting things out to tender ceases to exist, then Politicians with connections or mates in the industry could be set to make a fast buck at a massively inflated price. If this ended up in the press, then it will harm the controlling government getting re-elected.

Of course they could bring it in house but highly unlikely
 
Last edited:

aformeruser

Veteran Member
Joined
23 Jan 2009
Messages
30,636
why? You are still going to want to ensure best value in your commercial decisions.

Indeed. I think DfT will keep that mandatory for any franchised operations but it may be up to the operator for open access.
 

Taunton

Established Member
Joined
1 Aug 2013
Messages
5,982
Rolling stock should still be put out to tender in order to obtain a competitive price, which I don't think will change either. By obtaining at least 3 different quotes gives value for money for the taxpayer.

If they don't let it go out to tender, then it encourages companies to fleece the taxpayer.
Well the EU bureaucratic tendering approach, all the OJEU stuff etc, has nothing to do with that. Of course, throughout the 1970s-80s-90s there were really just two rolling stock builders to choose from, BREL and Metro-Cammell, who were pretty much negotiated with directly rather than open tender. Since then, rolling stock prices have increased by notably more than inflation, not all down to enhancement of spec (and certainly not when you look at price per seat). So what advantage has come there?
 

A0wen

Established Member
Joined
19 Jan 2008
Messages
3,898
Of course they could bring it in house but highly unlikely

It's not unlikely - it will simply never happen.

Even when BR was nationalised it still bought rolling stock from various makers - Metro Cammell, Brush, English Electric, North British among many others.

And some of the most enduring designs came from private manufacturers.
--- old post above --- --- new post below ---
Well the EU bureaucratic tendering approach, all the OJEU stuff etc, has nothing to do with that. Of course, throughout the 1970s-80s-90s there were really just two rolling stock builders to choose from, BREL and Metro-Cammell, who were pretty much negotiated with directly rather than open tender. Since then, rolling stock prices have increased by notably more than inflation, not all down to enhancement of spec (and certainly not when you look at price per seat). So what advantage has come there?

Evidence of this supposed increase in the cost of rolling stock?

You can't make assertions like that without providing some hard evidence to support them. Not least because pretty much everything that's manufactured has fallen in price (in real terms) over the last 40 or so years.
 

swt_passenger

Veteran Member
Joined
7 Apr 2010
Messages
25,123
It might remove the need for new rolling stock to be put out for tender?

The EU rules only apply to publicly funded tenders anyway. TOCs and Roscos can and do obtain stock by private negotiation.

This is how GWR have been able to arrange their AT300s, it wasn't an OJEU tender.
 

43096

On Moderation
Joined
23 Nov 2015
Messages
9,943
Probably nothing at all. EU countries don't own any franchises but if you mean non-UK companies, then it gets complicated as to what constitutes a non-UK company. For example, DB Cargo UK *is* a UK company according to UK law. I notice that DB Cargo UK owns Euro Cargo Rail - a *French* rail freight company.



If you mean "state-owned" companies running UK franchises, then it is pretty much the same above.



BUT, remember under EU law, the UK and any company in the UK is entitled to exactly the same rights as any other EU company. Whether a country takes advantage of those rights is another matter altogether. If Germany decided to invest in DB leading to the situation where DB also runs most of Europe's rail freight, then well done Germany - the UK could have done exactly the same.



Actually, which UK companies run rail services (freight, infrastructure etc) in the other EU countries?



(NB: gross simplification below!)



The way a country organises its rail system, eg: as the UK did into franchises, is purely a local decision. The EU decided (actually all 28 countries individually agreed and MEPs voted on, an MPs in each country ratified) that infrastructure should be accounted differently from rollingstock/operations to provide transparency for competition and safety.*



t.



Ian

National Express run franchises in Germany. Not sure on the ROSCO ownership now: Alpha Trains (which owns a sizeable amount of continental stock and locos), was the non-UK part of Angel.

Incidentally there are rules around state aid to companies within the EU to keep fair competition. So DB could not use German government money to develop DB Cargo to help it undercut competitors.
 

Bald Rick

Veteran Member
Joined
28 Sep 2010
Messages
17,853
Well the EU bureaucratic tendering approach, all the OJEU stuff etc, has nothing to do with that. Of course, throughout the 1970s-80s-90s there were really just two rolling stock builders to choose from, BREL and Metro-Cammell, who were pretty much negotiated with directly rather than open tender.

Certainly not the case in the 80s and 90s. Roger Ford's monthly column was full of his escapades in the car park at Derby waiting to see who delivered the tenders for the latest rolling stock. Make of vehicle, number of boxes of files, number of people delivering - all were reported!
 

broadgage

Member
Joined
11 Aug 2012
Messages
1,091
Location
Somerset
It might remove the need for new rolling stock to be put out for tender?

Maybe. It might remove the legal requirement to put it out to tender, though tendering would still be good practice to ensure good value for taxpayers and fare payers.

Leaving the EU would probably enable the government to choose British if they so wished rather than being legally required to accept the cheapest bid.

If a UK bid for new rolling stock was just slightly more expensive than say the German bid, Placing the order domestically could be justified.
For example the UK bid might be just £20 million more expensive, that could be justified if 2,000 jobs were created. 2,000 workers paying tax rather than claiming social security is a significant gain to the public purse. Remember also that the workers engaged on the contract would probably spend a fair bit in local shops, pubs, and restaurants, many which would need to engage more staff and further reduce dole queues.
 

LNW-GW Joint

Veteran Member
Joined
22 Feb 2011
Messages
15,469
Location
Mold, Clwyd
Maybe. It might remove the legal requirement to put it out to tender, though tendering would still be good practice to ensure good value for taxpayers and fare payers.
Leaving the EU would probably enable the government to choose British if they so wished rather than being legally required to accept the cheapest bid.
If a UK bid for new rolling stock was just slightly more expensive than say the German bid, Placing the order domestically could be justified.
For example the UK bid might be just £20 million more expensive, that could be justified if 2,000 jobs were created. 2,000 workers paying tax rather than claiming social security is a significant gain to the public purse. Remember also that the workers engaged on the contract would probably spend a fair bit in local shops, pubs, and restaurants, many which would need to engage more staff and further reduce dole queues.

The government has stopped buying rolling stock (after IEP and Thameslink).
The rest is private TOC/ROSCO procurement (funded by banks) which doesn't depend on EU procurement rules.
And what UK manufacturers did you have in mind?
Bombardier offers largely German/Swedish bits, Hitachi offers Japanese bits.
Where you screw the bits together is relatively unimportant in a global industry.
 

aformeruser

Veteran Member
Joined
23 Jan 2009
Messages
30,636
Bombardier offers largely German/Swedish bits, Hitachi offers Japanese bits.

Not to mention Bombardier Transportation's head office is in Germany with their parent company's head office being in Canada, while Hitachi Europe's head office is in Ireland and their parent is obviously Japanese.
 

Taunton

Established Member
Joined
1 Aug 2013
Messages
5,982
Leaving the EU would probably enable the government to choose British if they so wished rather than being legally required to accept the cheapest bid.
It will also help avoid nonsenses like separate series of rolling stock orders being made with incompatible couplers which cause all sorts of operational issues and expense downstream.

Roger Ford's monthly column was full of his escapades in the car park at Derby
Yeah yeah yeah, that's just to show the non-exec directors (and Roger F) that you have done an evaluation of the options. In most mainstream procurement operations the "feel" for who you want is made fairly early on, the rest is to show you did a thorough examination, in case it all goes pear shaped and you come under scrutiny, and also to keep the supplier's quotations screwed down so they don't think they've got you by the short-and-curlies, financially.

I seem to recall that Richard Branson's initial bid from Virgin was more Hollywood glitz than boxes delivered from vans, and Uncle Roger was blown away by it all!
 

coppercapped

Established Member
Joined
13 Sep 2015
Messages
2,590
Location
Reading
It will also help avoid nonsenses like separate series of rolling stock orders being made with incompatible couplers which cause all sorts of operational issues and expense downstream.

Being in or out of the EU will have no effect on that type of issue. What couplers are fitted, as well as all the other things, is the result of agreement between the participating parties. As long as the stock is not purchased by GOVERNMENT, the EU procurement rules do not apply.


Yeah yeah yeah, that's just to show the non-exec directors (and Roger F) that you have done an evaluation of the options. In most mainstream procurement operations the "feel" for who you want is made fairly early on, the rest is to show you did a thorough examination, in case it all goes pear shaped and you come under scrutiny, and also to keep the supplier's quotations screwed down so they don't think they've got you by the short-and-curlies, financially.

I seem to recall that Richard Branson's initial bid from Virgin was more Hollywood glitz than boxes delivered from vans, and Uncle Roger was blown away by it all!

Not in my experience in high tech businesses. There are often many ways of solving a problem, not all of which are obvious. As long as the procurement specification is written as a performance specification, then the gubbins inside can be very different as can the costs of the final product. Sometimes one trades-off high 'non-recurring engineering' costs with a reduced unit cost. In other words it is often advantageous to define the Form, Fit and Function of the thing you want to buy and let the suppliers come up with the solution.

This does not relieve you of the need of being an informed buyer.
 

NorthernSpirit

On Moderation
Joined
21 Jun 2013
Messages
1,893
If we pulled out of the EU as far as I'm aware franchising would still continue but without the red tape, on the plus side it'd force the British Govenment to buy British.

This is why we need Derby Works to keep open, to help keep the jobs there.
 

Harbornite

Established Member
Joined
7 May 2016
Messages
3,634
Actually, which UK companies run rail services (freight, infrastructure etc) in the other EU countries?


Ian

There's Freightliner Poland, although the parent company is now American (G&W) so not sure if that counts.
 

dosxuk

Member
Joined
2 Jan 2011
Messages
817
If we pulled out of the EU as far as I'm aware franchising would still continue but without the red tape

We're plenty good enough at writing our own red tape. We didn't need the EU to bring it to our shores, so there's no chance of it disappearing if we leave.

on the plus side it'd force the British Govenment to buy British.

How?
 

LNW-GW Joint

Veteran Member
Joined
22 Feb 2011
Messages
15,469
Location
Mold, Clwyd
If we pulled out of the EU as far as I'm aware franchising would still continue but without the red tape, on the plus side it'd force the British Govenment to buy British.

This is why we need Derby Works to keep open, to help keep the jobs there.

With all the profits going to Berlin (or Montreal)?
It's never as simple as it looks.
Bombardier is NOT a British company, nor is Hitachi.
Buying Alstom would probably give you as much British content as those two (with Preston electrics) but nobody campaigns for Alstom because they are perceived to be "French".
 

WatcherZero

Established Member
Joined
25 Feb 2010
Messages
9,535
Many non-EU countries use the OJEU tendering process to get their contract notice to the most potential bidders possible.

Iceland, Norway, Macedonia, Serbia, Switzerland, Kazakhstan, Liechtenstein, Turkey, Japan, USA are regulars but also.....

1A - Kosovo (15)
AF - Afghanistan (4)
AM - Armenia (6)
AO - Angola (3)
AZ - Azerbaijan (3)
BA - Bosnia and Herzegovina (16)
BF - Burkina Faso (11)
BI - Burundi (1)
BJ - Benin (4)
BR - Brazil (2)
BW - Botswana (1)
BY - Belarus (7)
BZ - Belize (3)
CA - Canada (3)
CD - Democratic Republic of the Congo (11)
CI - Côte d'Ivoire (5)
CN - China (4)
CO - Colombia (3)
DJ - Djibouti (8)
DM - Dominica (2)
DO - Dominican Republic (2)
DZ - Algeria (6)
EG - Egypt (18)
ER - Eritrea (3)
ET - Ethiopia (3)
GE - Georgia (16)
GH - Ghana (1)
GL - Greenland (1)
GN - Guinea (1)
GT - Guatemala (2)
GY - Guyana (1)
HN - Honduras (8)
IN - India (5)
IQ - Iraq (3)
IR - Iran (1)
JM - Jamaica (5)
JO - Jordan (5)
KE - Kenya (3)
KG - Kyrgyzstan (7)
KI - Kiribati (1)
KM - The Comoros (1)
KZ - Kazakhstan (19)
LB - Lebanon (5)
LC - Saint Lucia (2)
LR - Liberia (6)
LS - Lesotho (1)
MA - Morocco (35)
MD - Moldova (8)
MN - Mongolia (4)
MR - Mauritania (5)
MU - Mauritius (1)
MW - Malawi (9)
MX - Mexico (1)
NA - Namibia (1)
NE - Niger (2)
NG - Nigeria (4)
NI - Nicaragua (4)
NP - Nepal (2)
PF - French Polynesia (1)
PG - Papua New Guinea (6)
PH - Philippines (2)
PK - Pakistan (2)
PS - Palestine (2)
RU - Russia (9)
RW - Rwanda (2)
SB - Solomon Islands (1)
SC - Seychelles (2)
SL - Sierra Leone (5)
SN - Senegal (3)
SR - Suriname (1)
SV - El Salvador (4)
SZ - Swaziland (2)
TG - Togo (1)
TJ - Tajikistan (16)
TM - Turkmenistan (2)
TN - Tunisia (4)
TZ - Tanzania (5)
UA - Ukraine (22)
ZA - South Africa (3)
ZM - Zambia (5)

Current contracts in the system 35,530 EU, 899 EEA, 302 EU candidates, 521 Joint procurement with Japan/USA/Switzerland, 414 other countries

For instance there is more OJEU notices from Norway, a non EU member than there are from 12 EU states including Denmark and Greece.
 
Last edited:

Taunton

Established Member
Joined
1 Aug 2013
Messages
5,982
For all that it's fashionable to present final assembly plants as "nothing more than two blokes with screwdrivers putting the imported bits together", they do provide a significant proportion of the cost is retained in the country, for testing, sales, all of that, plus domestic component manufacturers find it much more straightforward to offer (and deliver) their products. Ask the old Met-Cam suppliers who later had to try selling components to Alstom where the meeting in Paris for a UK train was being conducted in French.
 

6Gman

Established Member
Joined
1 May 2012
Messages
6,725
If we pulled out of the EU as far as I'm aware franchising would still continue but without the red tape, on the plus side it'd force the British Govenment to buy British.

That's simply not the case.
--- old post above --- --- new post below ---
If we pulled out of the EU as far as I'm aware franchising would still continue but without the red tape, on the plus side it'd force the British Govenment to buy British.

Nor is that!
 

najaB

Veteran Member
Joined
28 Aug 2011
Messages
23,984
Location
Scotland
If we pulled out of the EU as far as I'm aware franchising would still continue but without the red tape, on the plus side it'd force the British Govenment to buy British.
Nearly all the red tape is made in Whitehall - our European cousins manage their railways with a lot less complexity than we do. There is nothing in EU regulation that requires franchising to be done the way that we have. Equally, there is no guarantee that future rolling stock purchase would be British - though it would be more likely to be so.
 

deltic

Established Member
Joined
8 Feb 2010
Messages
2,313
The EU rules only apply to publicly funded tenders anyway. TOCs and Roscos can and do obtain stock by private negotiation.

This is how GWR have been able to arrange their AT300s, it wasn't an OJEU tender.

Many railway procurement contracts will fall under the utilities contract regulations which apply to activities relating to the provision or operation of networks providing a service to the public in the field of transport by—
(a) railway;
(b) automated systems;
(c) tramway;
(d) trolley bus;
(e) bus; or
(f) cable
(2) , a network shall be considered to exist where the service is
provided under operating conditions laid down by a competent authority, such as—

(a) conditions on the routes to be served;
(b) the capacity to be made available; or
(c) the frequency of the service.
 

100andthirty

Member
Joined
5 Mar 2012
Messages
311
Location
Milton Keynes
The law that determines public procurement is UK law. Although it was inspired by an EU Directive, it is still UK law. So, if we were to leave the EU, it would remain UK law until we change it.
 
Joined
10 Mar 2013
Messages
1,010
why? You are still going to want to ensure best value in your commercial decisions.

also look at what happens in the US where there is major drama over procurements becasue there is no framework for it except that which can be changed by who ever has the most brown envelopes
 

The Ham

Established Member
Joined
6 Jul 2012
Messages
8,019
It could be that we end up with more British parts on our trains, but at the cost of less British parts on other EU trains, but that depends what trade deal we end up getting. As it could well be that to import parts or export posts could be subject to trade tariffs (the reason that trains are assembled within the EU so as to ensure that the fewest bits have had to have paid said tariffs, potentially widget a gets charged a tariff on the way out only to have a tariff applied to it again when it is part of the finished train).
 
Status
Not open for further replies.

Top