why does the leasing co have to pay the 180million for the new carriages? surely it would be cheaper for virgin to buy them themselves?
Read 'Informed Sources' articles by Roger Ford in MR for more info on this.
Basically, if Virgin were to buy the carriages then they'd have to repay the cost over the length of the franchise, which means extortionately high rental costs. After the franchise has ended, the ROSCO would still want a lot of profit, they don't like reducing prices even for equipment that has fully paid for itself.
So, a long lease needs to be negotiated. The only way that can be done is if the DfT procure the stock and guarantee that whoeever runs the franchise will be forced to use that rolling stock.
However, this has many drawbacks and actually pushes up prices in the long term due to a lack of competition. But it's the only way out of the mess.
Privatisation is flawed, and has resulted in massively increased costs and there is no way round the fact that the ROSCOs are absolutely wallowing in several million pounds of taxpayers money, year-on-year. The ROSCOs are literally laughing all the way to the bank... oh wait, they
are banks, after banks realised how lucrative being a ROSCO could be, and they bought them all out!