Scotrail to be run as a direct award to Abellio until March 2022 then Operator of Last Resort to take over

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PG

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As the thread title says it appears that the Scotrail franchise will continue to be run by Abellio under a direct award from next year.
As per these posts by @Ceat0908

RMT have posted this regarding abellio getting an extension under a direct award contract.

Scottish Government set to reward failure and give Abellio a free ride to continue operating the ScotRail franchise from 2022

RAIL UNION RMT today expressed its concern that the Scottish Government’s proposed revised ‘Franchising Policy Statement’ is laying the groundwork to give Dutch state-owned Abellio a direct award when the franchise ends next year, despite its well documented poor performance, rather than using its powers to take its rail services into public ownership.

As the consultation on the Franchising Policy Statement closes, it is clear the Statement reflects the Scottish Government’s intention to extend Abellio’s tenure. The Statement sets out a vast number of circumstances in which ‘the Scottish Ministers may decide to directly award a franchise agreement’ rather than tendering the franchise or taking it into public ownership via the Operator of Last Resort (OLR).

In contrast, earlier this week, Wales’ rail passenger services transferred into public ownership, as the Welsh Government has recognised that this is the most effective way to provide stability to the rail network in the face of ongoing Covid-19 uncertainty.

RMT believes that it would provide far greater value for money for passengers and taxpayers and provide greater resilience for Scotland’s rail network if the Scottish Government stopped making excuses and instead used its existing powers to take control of Scotland’s rail passenger services.

RMT General Secretary Mick Cash said:

“It is frankly unbelievable that the Scottish Government is poised to reward failure and give Abellio a free ride carrying operating rail services in Scotland.

“In the same week that the Government in Wales has taken rail services back into public ownership the Scottish government is once against showing its biased in favour of the privatised railway.

“The Scottish Government already has the powers to take its rail passenger services into public ownership, via the Operator of Last Resort yet it keeps making excuses not to.

“In response to a Freedom of Information case The Scottish Government has also refused to publish its response to the UK Government’s Williams Review of Rail, choosing instead to hide behind a veil of secrecy.

“This lack of transparency just reinforces RMT’s concerns that it opposed to public ownership of Scotland’s railways, despite this being the best way to deliver a resilient, cost-effective and reliable service.

“We need action, not more excuses, from the Scottish Government.”
 
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47271

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The RMT might not like the idea of Abellio, but for those of us in direct touch with management by the public sector in Scotland, it's a choice between being boiled or getting fried.

Abellio, or direct management by Transport Scotland. That's got to be a finely balanced 50/50 on the competence front, so maybe it's not so bad that it's been left as it is. At least Abellio's done it before.
 

Speed43125

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The RMT might not like the idea of Abellio, but for those of us in direct touch with management by the public sector in Scotland, it's a choice between being boiled or getting fried.

Abellio, or direct management by Transport Scotland. That's got to be a finely balanced 50/50 on the competence front, so maybe it's not so bad that it's been left as it is. At least Abellio's done it before.
I would have to agree, TS leaves a lot to be desired. I imagine now with the unrealistic timescales on new fleets out of the way, things may begin to settle down to something reasonable.
 

tbtc

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If true (and that's not to doubt the OP, just to say that I have genuinely no idea if this is true or not, so I'm not claiming to have any specific knowledge), it seems like a long time now since the SNP were being lauded for taking back control and being publicly seen to "dump" Abellio, no contract extension, a return to proper public sector railways (and various enthusiasts bemoaning the fact that this wasn't happening south of the border).

Maybe the grass wasn't greener and they now realise that the Dutch were the baddies that these kind of RMT press releases like to portray them as - running a railway is a difficult business and maybe sometimes there's something to be gained by bringing in experts in doing this kind of thing. Not the first time the SNP has talked a good game and then not exactly delivered - I genuinely like a lot of their "talk" but then feel let down by the actual results.
 

LNW-GW Joint

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Slightly different to the situation in Wales where TfW (the arm of WG) has taken over the rail operation, but with Keolis Amey retained as consultants/project managers.
In particular KA will continue to manage the introduction of the new trains they ordered for the franchise.
They are also continuing to run the Valleys infrastructure/electrification project for TfW.
But TfW/WG now owns the delivery of operational rail services.
 

pdeaves

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Slightly different to the situation in Wales where TfW (the arm of WG) has taken over the rail operation, but with Keolis Amey retained as consultants/project managers.
In particular KA will continue to manage the introduction of the new trains they ordered for the franchise.
They are also continuing to run the Valleys infrastructure/electrification project for TfW.
But TfW/WG now owns the delivery of operational rail services.
Also in Wales, Amey wanted to 'walk away' from the operations contract. I don't know if Abellio want/wanted to do likewise.
 

185

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Scottish Parliament - Parliamentary Business said:
1400 MINISTERIAL STATEMENT

Ministerial Statement: Scotland’s Railway


The future of the Scotrail contract. Michael Matheson spoke at 1456.

Confirmed Extension of EMA contract - Abellio to Sep 2021
March 2022 franchise ends
No franchise for succesor
Called Abellio & it's staff professional
2022 Direct award unwise
OLR is to run Scotrail MAR 2022, Staff to transfer.
 
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cf111

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Maybe they'll melt down the steel that's been sitting, rusting on the Clyde for last few years and build some new trains instead of ferries.
 

ScotsRail

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I'll not miss Abellio, a worse service at higher prices than when First ran it.

Not convinced that bringing it into the public sector is the way ahead but we shall see.....
 

snookertam

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ScotRail will be run by the operator of last resort, an arms length company wholly owned by the Scottish Government, from next year. In principle I agree with the franchise being in the public sector, I shudder to think what the management will be like though.

If they leave the day to day operations to those with expertise in that area, with public sector management taking a purely strategic role - planning, timetabling, fares and ticketing, integration with other modes etc - then it should hopefully work.
 

Skite Train

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A welcome development IMHO.

The margins are thin for public transport, but 2/3/4% in retained earnings that would be reinvested instead of paying out to shareholders - thats good news. Or lower fares to encourage uptake and improve income?

Next step, take the track and infrastructure under Holyrood's remit and have a fully integrated system of public transport within Scotland.
 

Bwsbro

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ScotRail will be run by the operator of last resort, an arms length company wholly owned by the Scottish Government, from next year. In principle I agree with the franchise being in the public sector, I shudder to think what the management will be like though.

If they leave the day to day operations to those with expertise in that area, with public sector management taking a purely strategic role - planning, timetabling, fares and ticketing, integration with other modes etc - then it should hopefully work.

Looks like their going down the Welsh Government / Transport for Wales route of operating. Hopefully they will appoint some good Railway people to lead the teams, and that the politicians in Hollyrood to allow them to do their work without too mutch interference
 

JonathanH

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The margins are thin for public transport, but 2/3/4% in retained earnings that would be reinvested instead of paying out to shareholders - thats good news. Or lower fares to encourage uptake and improve income?
...or neither of those things if less money is made or they want to increase fares to being in more revenue.
 

LNW-GW Joint

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Similar model to Wales then.
The difference there is that development projects (introduction of new trains and the infrastructure upgrade for the Metro) remain with Keolis Amey contracted to TfW.
K-A also remain as consultants to TfW, but operational services transferred to the WG OLR body.
Both arrangements still depend on the Westminster government defining the post-franchise structure for the industry, for any long-term solution.
As in England, a termination agreement will be necessary with Abellio for the Covid period, without the carrot of a new direct award.
 
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Bletchleyite

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Its always so pleasing to see the idea that fewer passengers can generate higher revenue via higher fares argument. Never gets old that one.

Ask Virgin Group about that - it's been fares policy on the WCML in the peak for years, and yes it does work when people are making a distress purchase or one that isn't from their own funds.
 

ainsworth74

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Or lower fares to encourage uptake and improve income?

Would a 4% reduction in fares really make that much difference? An Off-Peak Return from Edinburgh to Aberdeen is £56 so if you reduced that by 4% it would go down to £53.75. Or the Off-Peak Day Return between Edinburgh and Glasgow which is currently £13.70 and would go down to £13.15. I mean those aren't nothing but I'm far from convinced it would actually stimulate much, if any, demand...
 

A0wen

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A welcome development IMHO.

The margins are thin for public transport, but 2/3/4% in retained earnings that would be reinvested instead of paying out to shareholders - thats good news. Or lower fares to encourage uptake and improve income?

Next step, take the track and infrastructure under Holyrood's remit and have a fully integrated system of public transport within Scotland.

BIB - I'll correct that for you " The margins are thin for public transport, but 2/3/4% in retained earnings will be extracted by the RMT / ASLEF in pay rises under threat of industrial action"

Ask Virgin Group about that - it's been fares policy on the WCML in the peak for years, and yes it does work when people are making a distress purchase or one that isn't from their own funds.

Go back further, it was British Rail Southern Region's way of dealing with overcrowding. Increase the fares so the revenue overall was slightly higher but fewer travelling. Not something Virgin invented.
 

LNW-GW Joint

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The management fee for franchise management is not free "bunce" to be spent by the new owners.
Management teams cost money, and SG will now need access to capital it did not need to bother with before.
There will also be no handy intermediary to take the political flak when things go wrong.
 

Llandudno

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Would a 4% reduction in fares really make that much difference? An Off-Peak Return from Edinburgh to Aberdeen is £56 so if you reduced that by 4% it would go down to £53.75. Or the Off-Peak Day Return between Edinburgh and Glasgow which is currently £13.70 and would go down to £13.15. I mean those aren't nothing but I'm far from convinced it would actually stimulate much, if any, demand...
Maybe not, but when fares are increased by percentages in future years they will be added to a lower base rate as has happened in parts of Wales.

Every little helps I suppose!
 

stu77

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This has the potential to be a bigger clusterf#*k than abellio running it. The calmac ferry network has been completely under funded for years resulting in vast sums required to build new ships. Will the govt keep investing in scotrail or will investment go the way of the ferry’s.
 

43096

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A welcome development IMHO.

The margins are thin for public transport, but 2/3/4% in retained earnings that would be reinvested instead of paying out to shareholders - thats good news. Or lower fares to encourage uptake and improve income?
You are aware that Abellio have had to provide financial support to the franchise rather than taking any retained earnings/profit out?
 

Brissle Girl

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You are aware that Abellio have had to provide financial support to the franchise rather than taking any retained earnings/profit out?
Presumably only to the extent that their bid got the subsidy/premium payable from/to the Scottish Govt wrong?
 

LNW-GW Joint

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Presumably only to the extent that their bid got the subsidy/premium payable from/to the Scottish Govt wrong?

Since March 2020 there was some complicated hybrid setup to cater for the Covid usage drop, as in England/Wales.
But before that they did have several years of pumping in NS funds to keep going.
In the future it will all be down to Transport Scotland.
 

domcoop7

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[snip] and SG will now need access to capital it did not need to bother with before.
It never ceases to amaze me how little this concept is appreciated. The SG's capital will of course be funded by borrowing (involving financing costs) and tax payer support. The idea that there's millions of pounds sloshing around in evil capitalist profits on a highly competitive transport tender is just silly.*

[* other than when the tender process is run by incompetents like the former Strategic Rail Authority, which was of course swiftly abolished]
 

47271

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Like I said when this thread was opened last month, I'm completely ambivalent about this development. Abellio brought a lot of problems on themselves, as well as the ones that the franchise imposed upon them, but the track record of public management of Scotland's transport network over the past three or four years is dire. The state of the ferries is way worse than the obvious signs of the rusting hulks at Port Glasgow.

On that basis, it's difficult to imagine how they're going to make it better for the passenger. But if they're smart enough to put the right management in place and keep Transport Scotland out of mix then it might just work. Good luck to them, and I don't mean that sarcastically.
 

baza585

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There's an election coming. SNP talking tough because it will be electorally popular. Given the mess they have made of the ferry procurement, I have zero confidence they will be competent at running ScotRail.

Never let politicians near any operational decisions.
 
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