State rail operator hunts for staff to run failing routes

LNW-GW Joint

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The diagram is doubly misleading.
Once you've got WMT and TPE routes in there, there's no room to show Avanti on the WCML, arguably the most important operator on the route.
Not such a problem in GA and SWR-land.
 
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Sad Sprinter

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Shapps is always good for a headline-grabbing news release, a kind of "Dads Army" approach, should be music to the ears of the demographic he's wanting to appeal to - the "it was much simpler in my day" crowd who read the (physical) Sunday papers.

Grayling, on the other hand, never had the political nous to come up with stunts like this - Shapps is much better at the dodge/distract politics (which is not to say that he'll deliver anything better, just that he can conjur up a nice smokescreen when he wants)

We can ignore the fact that things are significantly more complicated nowadays than the environment that these people worked in, because I don't think there's any realistic chance of it happening - if anyone comes in to replace Arriva (etc) it'll be well paid management consultants (as with LNER), rather than begging Sir Topham Hat to come out of retirement



Disappointing - the Forum rules clearly state that any Glasgow - Kilmarnock - Carlisle - Settle - Leeds service must continue south to (at least) Nottingham :lol:

(but it does maybe say something about how seriously the rest of the country take railways when such *basic* errors can be printed - most people don't use trains more than a couple of times a year though, so will take this at face value)



It's amazing that the Victorians managed to build thousands of miles of railways (given that there were over a hundred years between "railways" and "British Rail")
In this case I think it was more simplistic in their day!
 

squizzler

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To me the solution seems quite simple. Offer the incumbent operators a lifeline in terms of a renegotiation to simple 'manage and operate' contract like that for GTR, TfW and others for the remainder of their term. No need for DfT to have in house management, and the knowledge of each operation, such at it is, remains in place. The Williams review will be out shortly so we know then wha we need to do when franchises come up for renewal.
Shapps is always good for a headline-grabbing news release, a kind of "Dads Army" approach, should be music to the ears of the demographic he's wanting to appeal to - the "it was much simpler in my day" crowd who read the (physical) Sunday papers.
Quite. In keeping with Boris' "Government of the people" schtick, there seems to be a big push to be seen as that which "made the trains run on time". I wouldn't be surprised if they use that phrase too at some point, just to be provocative.
 

js1000

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Franchises don’t work. Get rid. 6 or 7 regional companies plus an expanded CrossCountry taking in some of East Mids, TPE and Northern services and start pooling resources like BR did, that worked and was efficient. Start reducing frequencies but lengthening trains. That’s my opinion anyway...
I believe the plan going forward (in a nutshell) will be a 'concession' based system rather than 'franchise' based system. Instead of the DfT asking private companies to bid (normally unrealistically) on how much money think they can make, the DfT will collect the revenue. Similar to Thameslink, TFL Rail, Metrolink etc.
 

The Planner

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There are plenty of "experts", just not enough with experience in railway operations. Far too many times senior managers have arrived from other industry, where they may understand management techniques, but if they have not worked their way up through the ranks as a railway employee - which many in the past have done - then they seldom understand the needs of the railway and its users. Politicians only know what the civil servants tell them and civil servants can only see how little investment they need to supply to ensure the whole rail network doesn't fail completely.
Sounds like the previous head honcho at our place, who believed and passed on a snake oil story that digital railway was going to solve the woes of the railway.
 

The Planner

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Whilst there is some truth in this, I query the ‘rooms full’ part.

In my experience, the number of people negotiating and managing the contracts is relatively small. To take one example, the track / station access contracts between NR and the TOCs in the ‘third rail’ part of the world. These are managed by a handful of people.
Indeed, it is a fairly small group elsewhere too judging by the people I have spoken to.
 

Failed Unit

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To me the solution seems quite simple. Offer the incumbent operators a lifeline in terms of a renegotiation to simple 'manage and operate' contract like that for GTR, TfW and others for the remainder of their term. No need for DfT to have in house management, and the knowledge of each operation, such at it is, remains in place. The Williams review will be out shortly so we know then wha we need to do when franchises come up for renewal.

Quite. In keeping with Boris' "Government of the people" schtick, there seems to be a big push to be seen as that which "made the trains run on time". I wouldn't be surprised if they use that phrase too at some point, just to be provocative.
Probably with that is it is rewarded the incumbents for failure.

Albelio and First group overbid. It is entirely possible that the group coming 2nd in the process may have survived. EMR will be interesting if it fails as if only had one bidder.

But any kind of renegotiation of the franchise sends the message - “who cares what you bid. Get it right you make lots of money. Get it wrong and the renegotiate. You can only lose £x

Considering ScotRail, Greater Anglia and London Midlands are all in deep trouble we have serious problems with who evaluates these bids. To get it wrong once ok, 3 times?

likewise SWR and TPE. Same stupid mistakes. Expect new trains to work out the box. 458 anyone?
 

UQB709

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I believe the plan going forward (in a nutshell) will be a 'concession' based system rather than 'franchise' based system. Instead of the DfT asking private companies to bid (normally unrealistically) on how much money think they can make, the DfT will collect the revenue. Similar to Thameslink, TFL Rail, Metrolink etc.
This helps solve one of the failures of franchising - overly optimistic bidding assumptions on revenue. However there are still plenty of ways under concessions for bidders to simply end up making the same overly optimistic errors on the cost side, on KPI abatements (assuming there is a rigorous KPI regime to encourage delivery of the promised service) and on the capability of themselves (and others) to actually deliver on their promises for performance and service improvements. There is still also the same scope for DfT to be as successful in both specifying and evaluating bids as it has been in the past.

In short, any process that relies on contracting out but uses the current TOC approach risks some familiar old problems:
- a government department which is not an effective, or always well informed, client which is setting specifications and evaluating bids and has a proven track record which we all recognise
- bid teams under pressure to deliver the cheapest, yet most exciting and innovative proposals, which may or may not be deliverable and that certainly won't be the responsibility of the bid team to achieve and will prove to be a straitjacket (or is that mill stone) around the management who will have to deliver the service
- a complex web of arrangements to actually make the railway work, which may or may not be successful depending upon the alignment of Mars, Pluto and Venus.
 

LNW-GW Joint

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How is Southern, South Eastern, Chiltern and C2C doing? Or GWR?
Southern is part of GTR so is on their management contract, and not carrying the same risk as full franchises.
Went through the performance mill like the rest of GTR but seems to have stabilised.
South Eastern is at the end of its franchise term and will get a short-term direct award at low risk.
Chiltern is also at the end of its franchise next year, and has the best deal going as it was the only long-term deal the SRA ever struck.
They face a big change with the next franchise, if it survives in the current form.

c2c was sold on to Trenitalia by National Express, and seems to be stable with limited changes in prospect. Seems OK for now.
GWR seems to have weathered all the major changes it had to deal with, and the electrification/IEP setup seems to be working quite well.
It is on a direct award which keeps getting renewed, so they face a competition whenever DfT gets its act together - meanwhile probably fairly stable.
Being First Group it has a problematic parent, and their TPE franchise is in real trouble.
They have just started with Avanti and must be praying that it continues to deliver steady profits for them as it did for Virgin/Stagecoach.
 

FGW_DID

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Surely the DfT only needs to look in the very pages of this forum, plenty of ‘experts’ with an opinion on all aspects of railway operation and franchising here!

RUKF Rail!
 

Meerkat

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Franchises failing is not a sign that franchising is wrong as a concept.
If no franchises fail I would be suspicious about the bidding process.
People forget that franchising gives you the chance to change a failing franchise. When BR was failing a route there was nothing that could be done.
Concessions would be a disaster, with DfT getting to specify everything!
 

Staffordian

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Franchises failing is not a sign that franchising is wrong as a concept.
If no franchises fail I would be suspicious about the bidding process.
People forget that franchising gives you the chance to change a failing franchise. When BR was failing a route there was nothing that could be done.
Concessions would be a disaster, with DfT getting to specify everything!
Agreed - there is presumably no potential sanction against OLR if things go wrong. VTEC lost the franchise basically because they got their pax and revenue forecasts wrong (or were not robust enough to cope with unexpected situations). However, I have not seen any figures as to whether LNER are meeting their pax and revenue forecasts, or indeed whether they have any. It seems perverse to say that the franchise system is failing because some TOC's fail to meet their financial targets and propose that the solution to this is to move to a system where there are no targets !
 

AndrewE

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Agreed - there is presumably no potential sanction against OLR if things go wrong.
There is: they are politically accountable. MPs and the Govt should ensure that heads roll if they keep messing up. MPs get voted out if they ignore the complaints of their constituents.
The trouble is that since Teflon Tony none of the politicians have the integrity to fall on their sword, even when caught lying, and I suspect the civil servants are "only obeying orders," hoping that we shall realise that they have been given an absolutely stupid set of instructions by politicians. That's the only reason I can think of why so many things in Whitehall are a shambles: if they can't even pay farmers their grants (for land that stays the same size,) let alone run a Criminal Justice system, what hope is there for transport?
 

Djgr

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Franchises failing is not a sign that franchising is wrong as a concept.
If no franchises fail I would be suspicious about the bidding process.
People forget that franchising gives you the chance to change a failing franchise. When BR was failing a route there was nothing that could be done.
Concessions would be a disaster, with DfT getting to specify everything!
If it were one or two I would agree; when it snowballs to a significant proportion of the total network I would not agree with your view.
 

Failed Unit

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Was it not the case that stagecoach walked away to prevent further losses? So the question maybe should be would we have got more under the revised contract?

I still have a bad feeling about renegotiated franchises. Let’s say I bid 100M for a franchise, you bid 95M I win. I then say ok I can pay 100M but I can't offer 90M. Dft says yes. You would be extremely annoyed as it maybe was possible you got your sums right.

I feel this is what is happening now. Bid high and renegotiate. I watch EMR with great interest. But most of the recent lets are in trouble.
 
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Meerkat

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There is: they are politically accountable. MPs and the Govt should ensure that heads roll if they keep messing up
When did BR or DfT people ever get sacked for bad decisions leading to poor performance? Did they even get sacked when they killed lots of people?
They just hide behind “not enough state money”, whereas that is harder for a franchise as they agreed to that settlement.

Let’s say I bid 100M for a franchise, you bid 95M I win. I then say ok I can pay 100M but I can offer 90M. Dft says yes
I guess it might depend how much shareholder cash they burn through before being allowed to change the deal. I feel they should lose it all first before getting renegotiated.
 

Failed Unit

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I guess it might depend how much shareholder cash they burn through before being allowed to change the deal. I feel they should lose it all first before getting renegotiated.
I would agree, Abellio have 3 of thier franchises in trouble. EMR is too new to tell. Something is wrong on both sides here as either Abellio's bid team is bad or DfTs evaluation teams are not upto standard.

You could give a bit of sympathy with the new rolling stock introductions - but then history should have told them that the HST conversions were not going to be simple and new rolling stock always has teething problems. In Scotland they releases a number of 170s immedaitely to save costs and it but them on the back foot, this was just a quick saving they attempted which backfired.

Both First and Abellio are complaining about the Central London employment index, but really these are not new and ironically part of the problem is directly related to the rail industry. These are both new franchises, the trend towards flexible working in my industry is at least 6 years old. I don't personally go in every day, May 2018 actually was the big point for many in my office using GTR. We found we could be just as effective with not going into the office everyday (yes not everyone has this option) Others are tired of the cattle crush conditions onboard so again any chance to avoid this is welcome. The rail industry not delivering a suitable product in the peak has driven people away, but the rail industry is complaining about drop of revenue because if it. Some may argue this is a good thing. Less people in the peak means less need for 12 car trains all day. I digress.

I am not sure what the answer is however. Bigger Franchises? Smaller Franchises? The current system as created a lot of lines that have split areas such as the Midlands with limited East / West Midlands through journeys available. In the North we are already talking about splitting Northern, but do we really think 3 franchises will make any difference? To me taking as many back under the state will at least give us a chance to pause for thought. Digest the Williams review and then move on. If we renegotiate we have the same problems until the next batch of franchises expire. I wonder if bigger is better and should we re-create regional railways, NSE and Inter-City? However if we do then some of the intergrated benefits of Great Western are lost. However in the East Midlands we have Lincolnshire operated in a group with the MML where really Lincolnshire is more influenced by ECML.

One thing for certain - with the loss of Stagecoach and the fact EMR was ran with 1 bidder something needs to change. Arriva seem luke warm now, Abellio I suspect have got burnt badly to not rush in so recklessly next time.
 

Peter Bonner

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Full article-

Save
The government’s in-house train operator faces a struggle to recruit enough rail experts as concerns mount that at least five major franchises are at risk.

Sources said that the so-called operator of last resort (OLR) — a subsidiary of the Department for Transport — was finding it difficult to cope with a mounting workload caused by the implosion of train companies.

A number of former railway executives are understood to have been asked to come out of retirement to work for the organisation amid uncertainty over the future of the franchising system.


Grant Shapps, the transport secretary, has raised the possibility of renationalising Northern Rail within the next three weeks because it is close to financial collapse. He has asked the OLR to draw up detailed plans for the huge Northern Rail commuter network. A decision will be taken by the end of the month whether to place it in state hands or give its existing private operator, Arriva, a short-term contract under new terms.

Industry sources said it looked increasingly likely that Mr Shapps would choose temporary renationalisation to “make an example” of the German-owned franchise.
Since when did the London North Eastern KX to Inverness run via Aberdeen and Elgin??
 

Meerkat

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I am in favour of smaller franchises - should get more bidders, more dedicated management, and more alignment with devolved political power, less disruption if they go wrong.
The metros would probably be best as concessions, with franchises on the mainlines.
 

Failed Unit

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I am in favour of smaller franchises - should get more bidders, more dedicated management, and more alignment with devolved political power, less disruption if they go wrong.
The metros would probably be best as concessions, with franchises on the mainlines.
Dont disagree, but I wonder what the optimum size is. Rural areas are a pain in the neck and don't make any money so need to be absorbed into larger areas (which then ignore them). If you make them too small you lose decent cross country links, make them too big you get the problems we see at Northern and Central trains. Chiltern seems about right but we always get routes that just don't fit anywhere but are very useful (Norwich - Liverpool)
 

marko2

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Seeing as we worship the Germans how small do their franchises/concessions get?
One or two S-bahn or rural lines at a time, with pretty much guaranteed litigation from Deutsche Bahn when they lose one. They're more like operating concession AFAIK let by the passenger-travel organisation, subsidised by state and/or city government.
 

LNW-GW Joint

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Seeing as we worship the Germans how small do their franchises/concessions get?
They seem to bundle up a line or two at a time, which would be very small by our standards.
They measure them by train-km I think, and are always specified by the local (Land or city) transport body, leaving the federal transport ministry to deal with long-distance.
Local fares are set locally too, although there are some national schemes which they all support, and all the trains are on the DB web site (bahn.com).
DB Regio wins a good number of the regional concessions, but by no means all.
DB Fernverkehr runs the long distance services under a monopoly licence that is due to end in a few years, and is then due to be tendered competitively.
Don't get the idea that DB is a perfect operation, they are very deep in debt and have an increasingly poor performance record.
There are a few open access long dstance services, but they don't threaten DB in any serious way.
Freight is open access.

An example of a local setup is the Transdev operation around Munich, where they have 3 different operating contracts: Meridian south east towards Salzburg, BOB south towards Holzkirchen, and BRB around Augsburg.
Map below.
https://www.meridian-bob-brb.de/uploads/bb/media_document/43/original.pdf

In a UK context, that's like having different local contracts around Manchester for, say, Calder Valley, Southport and Blackburn services under TfGM control, while a national operator runs services to Preston, Birmingham and Leeds (and beyond) under DfT control.
 
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tbtc

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In this case I think it was more simplistic in their day!
Much simpler.

But then the railway was a lot simpler in BR's day too.

There's no easy lesson from the past which we can use to determine what the future should be.

Franchises failing is not a sign that franchising is wrong as a concept.
If no franchises fail I would be suspicious about the bidding process.
People forget that franchising gives you the chance to change a failing franchise. When BR was failing a route there was nothing that could be done.
Concessions would be a disaster, with DfT getting to specify everything!
Agreed - it was easy for BR to thin the service out, replace long trains with two coach Sprinters, introduce a "two new trains for every three old ones scrapped" policy, cut the Sunday service, introduce above inflation fare hikes at various times of the year (rather than being restricted to one annual rise at no more than RPI+1%)

Agreed - there is presumably no potential sanction against OLR if things go wrong. VTEC lost the franchise basically because they got their pax and revenue forecasts wrong (or were not robust enough to cope with unexpected situations). However, I have not seen any figures as to whether LNER are meeting their pax and revenue forecasts, or indeed whether they have any. It seems perverse to say that the franchise system is failing because some TOC's fail to meet their financial targets and propose that the solution to this is to move to a system where there are no targets !
This is the problem that I keep mentioning - it was fine for DOR to operate East Coast and it's fine for LNER nowadays because nobody is holding them to account, they don't have franchise commitments, they are able ignore promises that the franchise had previously agreed to provide (e.g. East Coast cancelling the bi-hourly Lincoln service that NXEC had taken on the 180s to provide), there's no benchmark for subsidy/premium...

...so people who are minded to see reasons to justify nationalisation are able to look at East Coast/ LNER and say "look, the state-operated service is doing well", when there's no way of proving whether they are any more efficient than the subsidy/premium that NXEC/VTEC promised to deliver.

Must be nice for them to just focus on running the trains without anybody criticising them for failing to deliver a certain level of premium, but that doesn't mean that they are any better at returning money to the Treasury (I suppose that some people think that its' fine for the state to miss out on millions of pounds of premium because that's a price worth paying for it to be run by a state-controlled operator but that doesn't mean that a state-controlled operator is any more efficient)
 

daccer

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As mentioned above it is a commercial necessity to run the railways as lean as possible and therefore some franchises would be expected to struggle as an element of optimum bias is going to be prevalent in a blind bidding process. It does appear that there is a direct correlation between the level of trouble a franchise is in and the amount of changes they have committed to in their agreement. The question will always be is there a better deal to be had for the Govt by re-letting rather than renegotiating quite apart from any idealogical considerations. If a TOC has gone through most of their growing pains and is showing signs of recovery then patience might be in order. I do believe that there are considerable bonds in place that are lost when a TOC defaults and these have been increased in light of some of the more high profile failures in the past.
 

158756

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They seem to bundle up a line or two at a time, which would be very small by our standards.
They measure them by train-km I think, and are always specified by the local (Land or city) transport body, leaving the federal transport ministry to deal with long-distance.
Local fares are set locally too, although there are some national schemes which they all support, and all the trains are on the DB web site (bahn.com).
DB Regio wins a good number of the regional concessions, but by no means all.
DB Fernverkehr runs the long distance services under a monopoly licence that is due to end in a few years, and is then due to be tendered competitively.
Don't get the idea that DB is a perfect operation, they are very deep in debt and have an increasingly poor performance record.
There are a few open access long dstance services, but they don't threaten DB in any serious way.
Freight is open access.

An example of a local setup is the Transdev operation around Munich, where they have 3 different operating contracts: Meridian south east towards Salzburg, BOB south towards Holzkirchen, and BRB around Augsburg.
Map below.
https://www.meridian-bob-brb.de/uploads/bb/media_document/43/original.pdf
What do these very small franchises do about the costs of maintenance, or the risk of the service collapsing if a small number of staff are ill or trains break down (like Hull Trains with their 180s)? Or, in the Transdev example, is it a case of winning batches of adjacent routes to create economies of scale - which would presumably restrict the number of bidders?
 

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