Southeastern to be taken over by OLR

[hwl]

Because it is highly market sensitive with the ability to significantly affect the stock market.

The Go-Ahead market cap dropped by over £100m as a result which illustrates the point.

 

[F Great Eastern]

As a very well connected person said to me today, if the DfT and the Government had a great case, they would have stripped SE of their franchise before it expired rather than not renewing it.

I'm also at a loss as to how the DfT have not noticed that they have had a pool of money missing for the last 7 years. The fact that they did not notice tells you all you need to know about them.

If a contracting authority is sure that someone has breached a contract and has a watertight case, they act as soon as possible, rather than wait for the breached contract to expire. Whilst they're talking about potentially taking further action, I would be surprised to see this ending in lots of expensive lawsuits in light of this.

Regardless of what the Government and the minions at the DfT are spinning to the media, there was no stripping of franchises, just simply there was not a renewal or further direct award contract issues. However that wouldn't create as much political capital for the Government, so spin must be used instead.

And the DfT can play the good guy once more, pretending to be on the side of passengers, because as we know, the DfT has amazing great innovative ideas and passenger focused policies and for the last 20 years their great world leading schemes and innovative forward thinking and planning have been held back by those evil greedy operators who have laughed all the way to the bank by squandering the chances to improve railway services despite this perfect operating environment.

Don't get me wrong, it's clearly wrong what Go-Ahead have done if it is the case, but at the same time there has been some politics played here by a DfT that apparently was so concerned about it and had such a strong case, that rather than stripping the franchise for breach of contract they allowed SE to just carry on regardless until the end of the contract they breached, then turned around and said they stripped SE of a contract, which is misleading. They simply didn't renew it.

 

[bramling]

As a very well connected person said to me today, if the DfT and the Government had a great case, they would have stripped SE of their franchise before it expired rather than not renewing it.

I'm also at a loss as to how the DfT have not noticed that they have had a pool of money missing for the last 7 years. The fact that they did not notice tells you all you need to know about them.

If a contracting authority is sure that someone has breached a contract and has a watertight case, they act as soon as possible, rather than wait for the breached contract to expire. Whilst they're talking about potentially taking further action, I would be surprised to see this ending in lots of expensive lawsuits in light of this.

Regardless of what the Government and the minions at the DfT are spinning to the media, there was no stripping of franchises, just simply there was not a renewal or further direct award contract issues. However that wouldn't create as much political capital for the Government, so spin must be used instead.

And the DfT can play the good guy once more, pretending to be on the side of passengers, because as we know, the DfT has amazing great innovative ideas and passenger focused policies and for the last 20 years their great world leading schemes and innovative forward thinking and planning have been held back by those evil greedy operators who have laughed all the way to the bank by squandering the chances to improve railway services despite this perfect operating environment.

Don't get me wrong, it's clearly wrong what Go-Ahead have done if it is the case, but at the same time there has been some politics played here by a DfT that apparently was so concerned about it and had such a strong case, that rather than stripping the franchise for breach of contract they allowed SE to just carry on regardless until the end of the contract they breached, then turned around and said they stripped SE of a contract, which is misleading. They simply didn't renew it.

Would stripping the franchise have caused too much complication, though?

If SE was stripped, surely this would also have to mean GTR as well? I can’t see there being too much appetite for anyone wanting to take on running that monolith at the moment, not least the government. GTR is, after all, pretty much bottom of the list for needing or wanting to interfere with at the moment.

How they’ve handled SE seems to have essentially avoiding stirring up a proverbial hornet nest. Anyone would have to be pretty much bonkers to want to take over the running of TSGN at the moment, and there’s no way the DfT will want to be rushed into making a decision on the future of that operation.

Go Ahead, I’d think, are to some extent indispensable.

 

[Watershed]

Would stripping the franchise have caused too much complication, though?

If SE was stripped, surely this would also have to mean GTR as well? I can’t see there being too much appetite for anyone wanting to take on running that monolith at the moment, not least the government. GTR is, after all, pretty much bottom of the list for needing or wanting to interfere with at the moment.

How they’ve handled SE seems to have essentially avoiding stirring up a proverbial hornet nest.

It also avoids a costly and protracted legal battle - of the kind that ensued over the East Midlands and West Coast franchise awards. Obviously we don't know how long ago the DfT started treating Southeastern's (in)action as potentially dishonest, but if it was only a few weeks or months ago...

 

[matt_world2004]

What good would have stripping the franchise immediately have done OLR needs to prepare to run the service there is often a transition period during which the old franchise prepares to hand over to the new franchisee

 

[Rab Smith]

Is there no end to this current Government's incompetence? Franchise 'hides' £25m from the DfT, surely someone at the DfT has to take responsibility for this because it is a blatant disregard for taxpayers money.
Never mind that everyone at this Company who was complicit in the fraud should be arrested, the Civil Servants involved should be sacked immediately.
Absolute shambles again from the Tories.

 

[Horizon22]

The 465s form part of a package - unkempt stations and unkempt trains.

By contrast the 365s have tended to be fairly well looked after, and to be fair haven’t had quite the level of vandalism the SE metro gets. The 365 also had some tweaks to the interior (from new, not the “dumbing down” 2010s refurbishment) which made them a bit brighter and more spacious.

That said, I like the 465s, and do think they get a bit of a bad press on here.

I personally don't think 465s would have got such a clapped out interior if Southeastern hadn't been in the "last year of the franchise" for about 5 years. They weren't doing brilliant regardless, but still there's not much incentive from a maintenance perspective and was a major negative of the franchise system and tiny or indefinite extensions.

 

[43096]

Is there no end to this current Government's incompetence? Franchise 'hides' £25m from the DfT, surely someone at the DfT has to take responsibility for this because it is a blatant disregard for taxpayers money.
Never mind that everyone at this Company who was complicit in the fraud should be arrested, the Civil Servants involved should be sacked immediately.
Absolute shambles again from the Tories.

What does it have to do with the Tories?

You do know that the contract will be overseen on a day-to-day basis by civil servants, who are non-political.

 

[Railwaysceptic]

Is there no end to this current Government's incompetence? Franchise 'hides' £25m from the DfT, surely someone at the DfT has to take responsibility for this because it is a blatant disregard for taxpayers money.
Never mind that everyone at this Company who was complicit in the fraud should be arrested, the Civil Servants involved should be sacked immediately.
Absolute shambles again from the Tories.

First, we don't yet know how this £25 million was hidden. As has already been pointed out, it's quite likely that it was done slowly and gradually and consequently was not noticeable. Second, any double checking should have been done by civil servants. As they were not aware that anything was wrong, they had nothing to report to their Ministers. Therefore the Government's ignorance of this problem is not due to incompetence and does not constitute "an absolute shambles again from the Tories."

It's best to wait until a proper investigation has been carried out before grinding party political axes.

 

[dosxuk]

Is there no end to this current Government's incompetence? Franchise 'hides' £25m from the DfT, surely someone at the DfT has to take responsibility for this because it is a blatant disregard for taxpayers money.
Never mind that everyone at this Company who was complicit in the fraud should be arrested, the Civil Servants involved should be sacked immediately.
Absolute shambles again from the Tories.

First, we don't yet know how this £25 million was hidden. As has already been pointed out, it's quite likely that it was done slowly and gradually and consequently was not noticeable. Second, any double checking should have been done by civil servants. As they were not aware that anything was wrong, they had nothing to report to their Ministers. Therefore the Government's ignorance of this problem is not due to incompetence and does not constitute "an absolute shambles again from the Tories."

It's best to wait until a proper investigation has been carried before grinding party political axes.

There's a lot of comment on the wider internet suggesting it may have been an accounting error as a result of the complicated track access rules on HS1, with the error being from the start of the first direct-award.

London Reconnections have a detailed article on the subject and how this wasn't news to those in the know - https://www.londonreconnections.com/2021/southeastern-non-breaking-news/

One snippet in that article explores how the missing money came to light, in 2020, and the response from Southeastern.

The DfT discovered the issue in 2020, presumably as a consequence of reviewing all terms and conditions in detail during the process of dealing with COVID arrangements and rebates, and as part of the modernisation and standardisation they need in place for their ‘Great British Railway’ (GBR) plan.

To quote LSER’s own 2019 accounts:

On 31 March 2020, the Secretary of State for Transport notified one of the Group’s subsidiary companies, London and Southeastern Railway Limited (LSER) that it was required to recalculate the Profit Share payable over the period from 12 October 2014 to 29 June 2019 pursuant to the Franchise Agreement dated 10 September 2014.

 

[Horizon22]

There's a lot of comment on the wider internet suggesting it may have been an accounting error as a result of the complicated track access rules on HS1, with the error being from the start of the first direct-award.

London Reconnections have a detailed article on the subject and how this wasn't news to those in the know - https://www.londonreconnections.com/2021/southeastern-non-breaking-news/

One snippet in that article explores how the missing money came to light, in 2020, and the response from Southeastern.

An interesting read thanks - the continuing Direct Awards for Southeastern were no doubt unhelpful to all involved (operational & financial) and led to the rather sorry state of some of its services today.

I think those expecting a dramatic improvement in metro stock / stations / services and potential devolution will be disappointed as TfL just don't have the finances (since Covid) to bring about 30-40 stations and staffing up to the "Overground standard".

 

[Djgr]

There's a lot of comment on the wider internet suggesting it may have been an accounting error as a result of the complicated track access rules on HS1, with the error being from the start of the first direct-award.

London Reconnections have a detailed article on the subject and how this wasn't news to those in the know - https://www.londonreconnections.com/2021/southeastern-non-breaking-news/

One snippet in that article explores how the missing money came to light, in 2020, and the response from Southeastern.

So were they incompetent or immoral?

 

[AlterEgo]

So were they incompetent or immoral?

It says it’s an accounting error, which implies incompetence.

 

[pdeaves]

It says it’s an accounting error, which implies incompetence.

Of course, such phrasing may also cover a deliberate error. Politically expedient terms are used all over the place, like people being 'forced' to resign which, to all practical purposes for those outside of that employment contract, means 'sacked'.

 

[swt_passenger]

Who said they were going to take over paying for it?

It’s speculation anyway, however it might happen, we shouldn’t be discussing it here…

 

[LNW-GW Joint]

The Guardian has a piece about the Southeastern bust-up, though it forgets the failure of Connex South Eastern over financial issues and its transfer to the OLR of the day in 2003.
It points out that the issue relates to the treatment of HS1's access charges for LSER trains, and this is likely to continue even under GBR rules.
DfT actually pays the HS1 access charges, with Southeastern repaying the DfT on a usage basis year by year.
It seems that Govia accepts there were mistakes, but not clear if DfT will punish them further.
The rail franchise system is so confusing, no wonder Southeastern mislaid £25m | Jonn Elledge | The Guardian

The company has since admitted its error, apologised, repaid the money and accepted the resignation of its finance director. “We recognise that mistakes have been made and we sincerely apologise to the DfT,” Go-Ahead’s chairwoman Clare Hollingsworth said, making exemplary use of the passive voice. “We are working constructively with the DfT towards a settlement of this matter.”
The DfT, though, seems not to be buying it. In its statement, it said it considers the underpayment to be “a significant breach of the good faith obligation within the franchise agreement”: you hardly need the Enigma machine to decode that. For good measure, the government said it would consider “further options for enforcement action”, including fines. Whether the government is really as angry as it claims, or whether it’s meant as a warning to others, is not exactly clear

 

[Gerard92]

Will be a major issue if that is the case for staff - there’s been cross/commuting for years especially after TL took over some services.

An Agreement is in place for the continuation for staff/family travel facilities for both SE/GTR

 

[dk1]

An Agreement is in place for the continuation for staff/family travel facilities for both SE/GTR

That’s good to hear.

 

[Mag_seven]

Just another reminder that for speculation as to what could happen next as OLR take over South Eastern you should use this thread in the speculative ideas section.

thanks

 

[KC1]

Yes as that agreement applies regardless of who operates either franchises. It’s not all the shuttles either, and Southern couldn’t crew it without SE working the ones they do.

Why is this the case? Can’t Southern just train their own employees to work this route?

 

[JonathanH]

Why is this the case? Can’t Southern just train their own employees to work this route?

The early and late workings run from Tonbridge. Southern's employees can work the route (although I guess not Tonbridge Jubilee Sidings) but would have to have overnight turns or the timetable would need to change.

https://www.realtimetrains.co.uk/se...3/0200-0159?stp=WVS&show=all&order=wtt&toc=SN shows two departures from Tonbridge Jubilee Sidings at 0428 and 0519 and two arrivals at 1903 and 0105.

 

[KC1]

The early and late workings run from Tonbridge. Southern's employees can work the route (although I guess not Tonbridge Jubilee Sidings) but would have to have overnight turns or the timetable would need to change.

https://www.realtimetrains.co.uk/se...3/0200-0159?stp=WVS&show=all&order=wtt&toc=SN shows two departures from Tonbridge Jubilee Sidings at 0428 and 0519 and two arrivals at 1903 and 0105.

I see. Thanks for the explanation.

 

[Horizon22]

Southern OBSs work the route too do they not?

 

[capitalconnect]

Southern OBSs work the route too do they not?

Yes indeed Southern OBSs still work all of the services that are driven by a Southern Driver and Southeastern Guards work all of the services that are driven by a Southeastern Driver.

However before Southern had got rid of Guards and introduced OBSs it was even more complicated. Every day depending on the journey there was four different types of staffing. The train could be:

• SE Driver and SE Guard
• SE Driver and SN Guard
• SN Driver and SE Guard
• SN Driver and SN Guard

This made things quite complicated. Especially things like ten bell despatch from the rear cab (which happens often on busy trains) which SN Drivers and SN Guards were allowed to use but the SE Drivers and SE Guards were not allowed. So if they were not paying attention it could get confusing when a SE Driver and SN Guard or a SN Driver and SE Guard worked together.

But it is now a lot simpler with SN Drivers only working trains with SN OBSs and SE Drivers only working trains with SE Guards.

The staff sometimes get confused though! I remember one time a Southeastern Guard told me my i could not use my Southern Daysave as it was not valid for use on any Southeastern services before realising that he was actually working a Southern service!

 

[ScottGallagher]

Well goodbye GoVia South Eastern....

No debranding operation taking place yet I guess?

 

[thedbdiboy]

There's not really much to debrand. Back in 2003 when Southeastern became the first OLR operation after the Connex South Eastern franchise was terminated a simple identity was chosen; and when in was finally refranchised (about 4 years later I think) part of the deal was not to change the name or undergo an expensive rebrand - remember this was the era of ONE, c2c etc and there was a bit of a backlash. So GoVia only ever tweaked the identity. I guess it will get tweaked again but apart from the small print there's nothing really to take off.

 

[capitalconnect]

Well goodbye GoVia South Eastern....

No debranding operation taking place yet I guess?

There is nothing to debrand as unlike Northern Rail for example (who had "By Arriva" written under their logo) Southeastern make no reference to Govia at all!

Does anyone know what the final Govia SE service will be and what the first state run SE service will be?

 

[bicbasher]

After 2am, the website footer changed to SE Trains Limited, but still uses the GoVia template.

 

[Applepie356]

Not much will change, but I am concerned that if they will be looking for a new operator throughout the tenure of the OLR, then there will be a lack of investment which SE definitely needs.

 

[Class800]

I suppose last resort is last resort, so if they can find a new operator, they go with that.