InterCity East Coast Franchise consultation opens

[LNW-GW Joint]

I know there are limits on the ownership of the rail network a franchise is allowed.

I don't believe there are limits. Not formally anyway.
If First win WC they will own WC/TP/SC simultaneously - everything north of Lancaster to Glasgow and beyond.
Nothing to stop it.

The competition people are more concerned about conflicting bus interests, which are directly owned and not franchised by HMG.
It might matter if the winner had airline interests in Anglo-Scottish routes, but they don't (unless Virgin start up LHR-EDI/ABZ using ex-BMI slots, but I very much doubt they will).

 

[Failed Unit]

I wasn't saying you thought they did, I was just saying that if Stagecoach did decide to bid separately then Virgin Rail Group wouldn't bid, it would need to be a separate bid from a company owned by Virgin Group Ltd.
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Even if you end up with the 91s and Mark 4 coaches replaced by 390s?

Don't think that will happen to be honest (prays). There is nothing wrong with the 91s and mk4. I suspect it will be IEP if they force them away.
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I don't believe there are limits. Not formally anyway.
If First win WC they will own WC/TP/SC simultaneously - everything north of Lancaster to Glasgow and beyond.
Nothing to stop it.

The competition people are more concerned about conflicting bus interests, which are directly owned and not franchised by HMG.
It might matter if the winner had airline interests in Anglo-Scottish routes, but they don't (unless Virgin start up LHR-EDI/ABZ using ex-BMI slots, but I very much doubt they will).

I think that there is a rule that one company can hold more than x% of the rail market. Not sure what x is however.

 

[rail-britain]

There is nothing wrong with the 91s and mk4

The new franchise may be replacing the Class 91 and Mark 4 coaches, but if it does it will be well into the second half of the franchise, by then this rolling stock will only be 30 years old
However, there would be benefits in replacing it, as it could quite easily be cascaded to secondary operators (such as Anglia)

The high priority for this franchise, and DfT have made this very clear, is the passenger experience
Presumably this is because so much of the feedback (as DfT operate this franchise) is they miss the GNER operation, and NatEx completely destroyed the passenger experience
However, I think they are going to struggle with the stations

 

[Failed Unit]

However, I think they are going to struggle with the stations

Compared to Virgin's stations east coasts are luxary. But I agree I can't really see what else they can do to the likes of Newark NorthGate considering it is an island platform.

 

[johnnychips]

If the experience of passengers is not satisfactory, I would expect this to be a problem of punctuality and to a lesser extent reliability. New trains may increase reliability, but punctuality - improved to some extent by newer trains not breaking down and blocking the line - seems to be at the mercy of tight diagramming and less-than-robust overhead equipment.

 

[hairyhandedfool]

.... (is this the only franchise that is still all ex-BR equipment?).....

Merseyrail?

 

[Failed Unit]

East coast trains are not that unreliable. They are not that far off the Pendo's. In fact I think the HSTs are more reliable. Will check my modern railways from last month which gave the figures. But compared to a lot of trains east coasts fleet is very respectable. The ECML and cable thieves don't help with the PPM of the ECML.

 

[IanXC]

(is this the only franchise that is still all ex-BR equipment?)

On the other hand is it not the only franchise which does not have any (underfloor engine - lets not get into a Cl254 debate) Multiple Units?

 

[rail-britain]

If the experience of passengers is not satisfactory, I would expect this to be a problem of punctuality and to a lesser extent reliability

No, it is more about quality of service, and returning the level of service that GNER used to provide (excellence, value for money; along those kinds of standards)

As an example, First Class is no where near where it used to be
NatEx started that, going from crockery to plastic trays
East Coast have applied a model that is very close to Virgin Trains, which although basic is practical and works

NatEx didn't spend much money on stations (they didn't really have the franchise long enough to implement any plans, if they did have any), other than applying their own branding
East Coast have simply retained the status quo
So investments in stations is overdue, considering this route is the "flagship" service of trains in Britain

The next issue is upgrading stations, and when to do so
The specification of IEP really needs to be known
There may be some parallel benefits that can be applied
However applying these upgrades only to find they are unsuitable for IEP would be a disaster
Ironically, there are parallels there to West Coast, where the trains were upgraded first, and the stations later

 

[tbtc]

I think that there is a rule that one company can hold more than x% of the rail market. Not sure what x is however.

If anyone can find evidence of this figure, or the "no company can own adjacent TOCs" claims then I'd be interested.

Almost all the big companies have had adjacent TOCs at some stage (if its okay for Southern and Southeastern to be part of the same company, or NXEA and C2C or XC and West Coast or Great Eastern and Anglia or...)

 

[Zoe]

Almost all the big companies have had adjacent TOCs at some stage (if its okay for Southern and Southeastern to be part of the same company, or NXEA and C2C or XC and West Coast or Great Eastern and Anglia or...)

In the case of Taunton to Plymouth and York to Edinburgh there is a fairly equal split between XC and the other TOCs but last time the XC franchise was let First was on the shortlist even though had either won it would have given them all of the services on the route. National Express was also on the shortlist for XC although at the time the East Coast franchise hadn't been let.

 

[tbtc]

In the case of Taunton to Plymouth and York to Edinburgh there is a fairly equal split between XC and the other TOCs but last time the XC franchise was let First was on the shortlist even though had either won it would have given them all of the services on the route. National Express was also on the shortlist for XC although at the time the East Coast franchise hadn't been let.

People keep claiming that Operator X couldn't get Franchise Y because they already run Franchise Z but nobody seems to know where this magic rule comes from - and there's plenty evidence of one company running adjacent TOCs

 

[Failed Unit]

My understanding is the restriction is on total rail market share rather than if you have franchise x you can't have y.

But the GoVia are the largest now and are still bidding for some large franchise so maybe the could have 100% of uk rail. It isn't as if they would have no competition as we have road and air.

Will be interesting to see if first bid as stated and what they propose to do with Hull trains. Integrate would be nice and have an hourly Hull - London using the stopping path.
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I will see if i can find the % rule and post, but I am also beginning to think it is just a myth.

 

[David10]

..but there seems to be a myth that a company can't hold both east and west coast mainlines.

Virgin were preparing a bid for the 20 year EC franchise in 2001 before it was cancelled and then lodged bids in 2005 and 2007. Its safe to assume they would have checked if they were going to be excluded because of operating WC & XC.

 

[tbtc]

My understanding is the restriction is on total rail market share rather than if you have franchise x you can't have y.

But the GoVia are the largest now and are still bidding for some large franchise so maybe the could have 100% of uk rail. It isn't as if they would have no competition as we have road and air.

Will be interesting to see if first bid as stated and what they propose to do with Hull trains. Integrate would be nice and have an hourly Hull - London using the stopping path.
--- old post above --- --- new post below ---
I will see if i can find the % rule and post, but I am also beginning to think it is just a myth.

I don't know how you'd measure market share (e.g. a London commuter franchise will carry more people in twelve coach EMUs than Northern/ATW do in 30m Pacers, so is total mileage more important than number of people? Or is revenue important?).

Would be nice to see the OA services brought into line with East Coast services (co-ordinated times/ stops etc) whoever wins the big franchise, so that we see space over Welwyn pathed better etc

 

[Zoe]

People keep claiming that Operator X couldn't get Franchise Y because they already run Franchise Z but nobody seems to know where this magic rule comes from - and there's plenty evidence of one company running adjacent TOCs

Also don't forget that Virgin were one of the preferred bidders back in 2000 for the new East Coast franchise and had it not been for Hatfield they may well have won although we will never know this as GNER could still have won the 20 year franchise. In the end it was decided to not relet the franchise and GNER were given an extension.

 

[David10]

Will be interesting to see if first bid as stated and what they propose to do with Hull trains. Integrate would be nice and have an hourly Hull - London using the stopping path.

First will have to keep EC & HT completely seperately, the DfT are insistent on this. Wouldn't rule them out though, Arriva ran both ATW & WSMR on the Wolverhampton - Wrexham line.

 

[Zoe]

First will have to keep EC & HT completely seperately, the DfT are insistent on this. Wouldn't rule them out though, Arriva ran both ATW & WSMR on the Wolverhampton - Wrexham line.

So the DfT will not allow any Hull Trains stock to be used on East Coast?

 

[David10]

So the DfT will not allow any Hull Trains stock to be used on East Coast?

First EC could hire in stock from other sources but it must be at a fair rate, ie HT cannot charge through the nose. Of course bidders can propose to lease extra stock.

 

[LNW-GW Joint]

So the DfT will not allow any Hull Trains stock to be used on East Coast?

I should think the only requirement is to have separate finances (ie no cross-subsidisation, which is where Chiltern got in a mess with WSMR).

 

[rail-britain]

First will have to keep HT completely seperately

They could agree to sell it off, if awarded the East Coast franchise
However as an Open Access Operator there aren't any real issues as it is legally a separate company

 

[Zoe]

First EC could hire in stock from other sources but it must be at a fair rate, ie HT cannot charge through the nose. Of course bidders can propose to lease extra stock.

Why would First Hull Trains charge First East Coast through the roof to hire stock? Would it be in their interests to charge First East Coast that much considering the majority of Hull Trains is also owned by FirstGroup?

 

[Stats]

If anyone can find evidence of this figure, or the "no company can own adjacent TOCs" claims then I'd be interested.

There is no such rule. The competition assessment is on point-to-point public transport flows. If your interested in previous competition assessments you may want to google "site:www.oft.gov.uk East Coast"

 

[Masboroughlad]

First will have to keep EC & HT completely seperately, the DfT are insistent on this. Wouldn't rule them out though, Arriva ran both ATW & WSMR on the Wolverhampton - Wrexham line.

When Virgin got XC and West Coast, they had to keep them as two seperate companies for accountancy / safety case purposes etc, but they did brand them all as Virgin Trains. They just had to be able to split them if necesary.

Likewise, there is no reason I assume why Hull Trains and First East Coast could not be run under one brand name? First Great North Eastern for example?

 

[David10]

Why would First Hull Trains charge First East Coast through the roof to hire stock?

If First were wanting to sell HT down the track the price may be calculated as x times annual profit, so First could inflate HT's profit at the expense of First EC. Or sometimes franchises have flip points where any excessive profits or losses are shared in a different way, so a TOC could play games to exploit this.

Its more when the transaction occurs the other way, ie if HT were to hire a train from First EC, it couldn't be done at 'mates rates'. Currently First's Old Oak Common depot maintains both their GW and HT Adelantes but they are maintained as 2 seperate fleets with their own sets of spare parts. If a HT Adelante needs a part from GW's inventory it needs to be recharged to recover the cost in full, ie no discount. I presume this is audited, particuarly as FGW is in revenue support.

 

[Failed Unit]

I guess when you look at the rolling stock situation, East Coast are already looking at more rolling stock so they can extend hourly to York. I would be good if these are all electric. Options they have looked at so far are.

1. Breaking up an mk4 set, so they have a series of shorter ones for less well used services (coupled with spare coaches) Not sure what they have spare to be honest but it would mean 9 coach for London - Edinburgh and maybe 7 coach for London - York.
2. Obtaining another HST.

Whatever they don't have enough stock for all the asparations. I think this is in order of current preference.

1. Make the x08 London - York path hourly
2. Extend all Newcastle terminators to Edinburgh
3. Extend some York terminators to Newcastle
4. More services to Bradford / Skipton

I think they will need 1 new set for option 1, 2 new sets for 2 (3 in total)

Investigations have also taken place for the 2016 timetable of something like this.

1. London, Newcastle, Edinburgh
2. London, Peterborough, Newark, Doncaster, York, Darlington, Durham, Newcastle, Alnmouth, Berwick-upon-Tweed, Edinburgh
3. London, Stevenage, Peterborough, Grantham, Newark, Reford, Doncaster, York, Northallerton, Darlington, Durham, Newcastle
4. London, Peterborough, Doncaster, Wakefield Westgate, Leeds
5. London, Stevenage, Grantham, Doncaster, Wakefield Westgate, Leeds

I suspect that the stopping patterns will be debated a lot. North of newcastle will always be a hard demand to satisfy. I don't know if hourly fast London - Edinburgh has demand but maybe in 3 years time it may do.

As I have said on other threads I would like to see open access operators stop at some of the smaller stations. Would HT doing London, Peterborough, Grantham, Newark, Retford, Doncaster onwards to Hull be a bad thing. Well yes if you want to get from London - Hull as quickly as possible. But the Grand Central could stop at other stations and still make it to York on its existing path.

 

[HH]

My understanding is the restriction is on total rail market share rather than if you have franchise x you can't have y.

There is no such rule. There are things that mitigate against TOCs getting too large a share of the market though:

1. DfT seem reluctant to have one Group with too large a share. I don't think you can be hard and fast on a number, but too large a share might be viewed as anti-competitive (I know one owning group thought that problems would arise if the share was markedly over 30%).

2. Owning groups are less likely to put in cutthroat bids once they have a large market share.

3. Some owning groups would feel too exposed to rail risk if they had too large a share.

To be honest, given the level of competition during this round it's hard to see anyone repeating the success of First last time around with 4 wins (NX got a lot of their share from the previous round from buyouts). Both First and Govia will do well to hold on to anything like their current levels of market share.

 

[tom1649]

InterCity East Coast should be kept in the public sector. It is clear that the current franchise system is inefficient and a drain of public money which ends up with the shareholders of big private firms. Yet successive governments refuse to change the system. Why?

Our railway should be run for public service not profit.

 

[David10]

InterCity East Coast should be kept in the public sector. It is clear that the current franchise system is inefficient and a drain of public money which ends up with the shareholders of big private firms. Yet successive governments refuse to change the system. Why?

Because by keeping the railways in the hands of the private sector, the railway's considerable debts do not end up on the governments balance sheet which effects our AAA credit rating and how much it costs to finance our debt.

Renationalisation is not on anyone's agenda and apart from a few diehards like Bob Crow, everyone accepts this and is trying to make the best of what we have.

Let's not get into yet another debate on should BR have been privatised, has been done to death on other threads.

 

[HSTEd]

Because by keeping the railways in the hands of the private sector, the railway's considerable debts do not end up on the governments balance sheet which effects our AAA credit rating and how much it costs to finance our debt.

....
The government balance sheet that matters already includes that debt unless you think that the bond markets are entirely blind.

The figures that are massaged are just the ones that the ministers use in the press to get soundbites.