Is it in ROSCO's interests to swap an old unit for a newer unit?

[43096]

Whilst I understand that ROSCOs are in business not to serve the interests of TOCs and the public, but exclusively for profit (mainly pension funds)
It bothers me that once they've milked a cow (train) dry run it into the ground and made an eye watering amount of a return on their investment they still continue to flog the trains as a valid option to either desperate TOCs or cash strapped ones, I feel they should be forced to retire stock by the DfT once its made a 20%/30% return on the investment, or it hits a certain age whichever happens first!

This is the reason why privatisation has been a financial failure for the nation because we the paying public have been lining the fund managers pockets for years, I for one hope they scrap a number of these clapped out trains, it hits the ROSCOs in the pocket and the TOCs are given the power to run to a different ROSCO and let market forces take their course, forcing down prices

So 13% of Revenue not profit goes to pay for rolling stock! So SE railway turned over £850m a year so £110m paid for the trains and they've been paying that for the last 13 years of their franchise so £1.436b direct to hedge funds and fat cats

I'm tempted to play "RMT buzzword bingo" with your posts, but I will resist.

What you seem to be suggesting is state control of private companies, which is a very dangerous route to go down. You also don't seem to understand that the ROSCOs have costs that they incur out of the lease fee they charge - they will have financing costs as well as the capital depreciation of the asset value. They have certainly not paid over £1bn, or anything like that, to fat cats (as you put it) just from the SouthEastern fleet.

I really do not understand the UK obsession with profit being a bad thing. Profits are what generate tax revenues, fund our pensions and keep people in jobs. To use an old phrase: "profit" is not a four letter word, but "loss" certainly is.

 

[philthetube]

Whilst I understand that ROSCOs are in business not to serve the interests of TOCs and the public, but exclusively for profit (mainly pension funds)
It bothers me that once they've milked a cow (train) dry run it into the ground and made an eye watering amount of a return on their investment they still continue to flog the trains as a valid option to either desperate TOCs or cash strapped ones, I feel they should be forced to retire stock by the DfT once its made a 20%/30% return on the investment, or it hits a certain age whichever happens first!

This is the reason why privatisation has been a financial failure for the nation because we the paying public have been lining the fund managers pockets for years, I for one hope they scrap a number of these clapped out trains, it hits the ROSCOs in the pocket and the TOCs are given the power to run to a different ROSCO and let market forces take their course, forcing down prices

Using the reverse argument how long do Hull trains have to keep their 108.s for

 

[Bertie the bus]

But then there are cases like the 707s, where new stock has been bought and the ROSCO has been basically done over.

Those are the risks. Fund the purchase of trains for a TOC with a short amount of time left and no guaranteed future lease then on your head be it. If they don’t want to take those risks then either don’t do that or go into another area of business.

Before we start to get the hankies out, let's not forget the ROSCOs have made handsome profits for the last 2 decades. It's not as though they have being barely getting by so if one or two deals go sour then tough.

 

[43096]

Those are the risks. Fund the purchase of trains for a TOC with a short amount of time left and no guaranteed future lease then on your head be it. If they don’t want to take those risks then either don’t do that or go into another area of business.

Before we start to get the hankies out, let's not forget the ROSCOs have made handsome profits for the last 2 decades. It's not as though they have being barely getting by so if one or two deals go sour then tough.

It is indeed the risk they take.

But, if it happens too often then they will start looking at the risks and simply not fund new trains or significant upgrades mid-franchise without Section 54 guarantees. The ditching of the Class 707s has caused concern amongst the new entrants to the market - presumably they thought they had a sure-fire win and hadn't factored in the risks of trains being ditched at franchise change. Might explain why they have undercut the three original ROSCOs - they don't understand the market.

 

[matacaster]

With the ever-more bonkers Elf & Safety, Disability discrimination, Women-only coaches, No doubt separate toilets for transgender people, emissions controls etc, it will become increasingly difficult and costly to modify older stock. Punters like new trains too, so scrapping well before they are life-expired in the normal sense is highly likely. So shorter working lives will lead to increased lease costs, say over 30 and reducing rather than 40 years.

 

[Metal_gee_man]

I'm tempted to play "RMT buzzword bingo" with your posts, but I will resist.

What you seem to be suggesting is state control of private companies, which is a very dangerous route to go down. You also don't seem to understand that the ROSCOs have costs that they incur out of the lease fee they charge - they will have financing costs as well as the capital depreciation of the asset value. They have certainly not paid over £1bn, or anything like that, to fat cats (as you put it) just from the SouthEastern fleet.

I really do not understand the UK obsession with profit being a bad thing. Profits are what generate tax revenues, fund our pensions and keep people in jobs. To use an old phrase: "profit" is not a four letter word, but "loss" certainly is.

So let's expect the 375s to last 30 years at close to £110m a year equal £3.3bn and they didn't cost that in the first place! The asset write down isn't important ultimately they need to pay for themselves and the interest, anything else is gravy! And that'll be on new rolling stock figures, imagine how much BR flogged the Pacers to the ROSCOs for and how much they've returned since privatisation!
All I feel is they make too much profit from leasing them, if competition will drag prices down to more acceptable/desirable levels, so it forms a smaller percentage of TOCs costs we the paying public (I say hopefully) should see our fares go down!

 

[43096]

So let's expect the 375s to last 30 years at close to £110m a year equal £3.3bn and they didn't cost that in the first place! The asset write down isn't important ultimately they need to pay for themselves and the interest, anything else is gravy! And that'll be on new rolling stock figures, imagine how much BR flogged the Pacers to the ROSCOs for and how much they've returned since privatisation!
All I feel is they make too much profit from leasing them, if competition will drag prices down to more acceptable/desirable levels, so it forms a smaller percentage of TOCs costs we the paying public (I say hopefully) should see our fares go down!

You are just making numbers up. The £110m for the 375s you quote is the same number you quoted for the whole SouthEastern fleet earlier! You also do not know the structure of the lease: is it wet, soggy or dry; what upgrades are included etc etc.