SWR to be nationalised?

[bakerstreet]

Thought this might be of interest, will be interesting to see what happens

South Western Railway’s auditor has warned the strike-ridden train network's future is at risk as it battles a string of crippling challenges.

Deloitte said that South Western faces "material uncertainty" over whether it can continue operating, as accounts filed on Tuesday revealed it is at risk of being nationalised by the Department for Transport (DfT).

Alternatively, owners London-listed FirstGroup and Hong Kong-based MTR could be forced to submit a fresh plan to the Government to run the line on a short-term basis.

It comes after the firm was hit by Britain's biggest ever rail strike last month, causing misery for thousands of commuters as scores of services were delayed or cancelled.

https://www.telegraph.co.uk/busines...ailway-could-nationalised-auditor-raises-red/

View attachment 72444

A bit more info. Posted on Twitter

https://twitter.com/anonswr/status/1214580174131478529?s=21



For those who cannot read the contents in the attached image above, in summary:

• A letter to all SWR staff from new MD Mark Hopwood
• Talks about media coverage re the contract
• Talks about the reasons why SWR's performance has suffered (infrastructure, timetabling and industrial action)
• Mentions the constructive talks the company is having with the DfT
• Talks about 2 possible outcomes - one a new contract for the company or that the contract ends with trains continuing to operate but under a Government controlled body
• Finally it assures staff that none of this will affect their role or the company's plans to improve the service
• Updates from the company will follow

 

[RealTrains07]

Damm was hoping nobody had created a thread about it

Have to say iam not surprised. It wasnt too long ago that a similar article also reported that SWR aswell as TPE was struggling financially so this just adds to the problem.

we will have to see if anything is said by the DfT about whether they talking to First MTR about SWR

 

[Taunton]

Went yesterday morning (6 Jan) on SWR for the first time since the strikes. Guess what, completely disrupted on all sides, this time due to signals.

Whether it's NR, or your staff, or your train builder, or the weather, the TOC needs to pull it all together, and in particular have the resources to be able to come back from disruption without huge and lingering continued issues. Despite lots of people hanging round on platforms, next trains were being non-stopped past those waiting - only to join a queue further along the line. What is the value of non-stopping Clapham Junction on the Windsor Lines, which often nowadays seems to contribute more to the trainload than Waterloo?

 

[hwl]

a bit more info. Posted on Twitter

https://twitter.com/anonswr/status/1214580174131478529?s=21

View attachment 72446

Having read the accounts nothing too untoward in there apart from uncertainly around DfT renegotiation and numbers being way of from what was bid. Pretty standard accounts language all round.
The huge loss is just recognising a write down now rather than later if DfT doesn't reset.

 

[Goldfish62]

a bit more info. Posted on Twitter

https://twitter.com/anonswr/status/1214580174131478529?s=21

View attachment 72446

Looks pretty much standard stuff which most franchises have gone through at one time or another.

 

[47421]

I am not so sure this is non-news. Telegraph article suggests SWR are burning through the committed shareholder funding rapidly and it will be all gone by March. No doubt FirstGroup will not provide any additional funding unless the Franchise Agreement is substantially renegotiated in its favour, its shareholders would not wear them throwing good money after bad. DfT in a difficult position, if they renegotiate GA will immediately ask for same treatment, costing DfT loads. If they dont renegotiate its OLR time in a few weeks.

 

[Failed Unit]

Having read the accounts nothing too untoward in there apart from uncertainly around DfT renegotiation and numbers being way of from what was bid. Pretty standard accounts language all round.
The huge loss is just recognising a write down now rather than later if DfT doesn't reset.

Be interesting what Stagecoach’s reaction will be like if they reset. As it will send out the message bid what you want - if you get it wrong just renegotiate. Seems stagecoach got their maths right lost, and will watch first get bailed out.

 

[JohnMcL7]

@Brush 4, @NewSt Can we have something in text format please? Not all our members are able to access social media sites such as Twitter; our blind members are unable to read text contained within images and our deaf members are unable to listen to radio programmes. iPlayer is also unavailable to many for other reasons too.

Thanks in advance

In response to this post on the previous thread:

Subject Employee Communications

Dear Colleagues,

You may have seen some media coverage about South Western Railway following the publication of our yearly accounts and I would like to explain to you what this means for our business.

As you know, SWR's recent financial performance has been affected by a number of issues - including infrastructure reliability, timetabling delays and industrial action. Back in may, following the first Group annual results, Andy Mellors wrote to you explaining that we were in discussions with Department for Transport about changes to our contract to reflect this. Discussions are continuing and the recent publication of SWR's yearly accounts sets out potential outcomes for these talks.

We are having constructive talks with the DfT as regards a new contract for our continued operation of the franchised train service. Another potential outcome is that the current contract will end. If this happens, the business will keep operating, just under a Government-controlled body which colleagues would transfer across to.

I want to reassure you that this doesn't affect your role at all, and it doesn't affect our plans to improve services for passengers in 2020 and beyond. We are focused on concluding the process successfully and will continue the talks to ensure we reach the right outcome for the Government, our shareholders and our customers.

We'll keep you updated as to the outcome of these discussions.

Thank you for your continued hard work and support in delivering great service, in often difficult circumstances, to our passengers.

Mark Hopwood
Managing director

 

[3141]

There are several possible futures:-

a management contract while DfT considers a longer term solution;
renegotiate terms of franchise (which DfT wouldn't do for Stagecoach at East Coast, but might consider if it regards the circumstances here as justifying such a step);
Operator of Last Resort (OLR), which some like to portray as nationalisation;
devise a new approach, perhaps as a guinea pig for whatever the Williams report recommends.

No doubt there will be extensive speculation and rumour.

 

[Bessie]

First Group is trying to break itself up. Has been trying to sell its US bus operations for a while. Impairment write downs biting big time

 

[180zephyr]

Seems stagecoach got their maths right lost, and will watch first get bailed out.

Stagecoach had 21 years of experience running SWT, and kept the unions much happier than SWR. Of course the overbidding has everything to do with the strikes - they wouldn't have taken action had SWR not ordered 750 new (DOO) carriages as part of their bid.

 

[Robertj21a]

Be interesting what Stagecoach’s reaction will be like if they reset. As it will send out the message bid what you want - if you get it wrong just renegotiate. Seems stagecoach got their maths right lost, and will watch first get bailed out.

I wonder who recalls that a good many people thought that Stagecoach should have remained as the franchise holder. They are just so much more professional than most of the others.

 

[Failed Unit]

I wonder who recalls that a good many people thought that Stagecoach should have remained as the franchise holder. They are just so much more professional than most of the others.

I suspect many (not in dft). It appears like many others they went for the money rather than the best delivery, hence they will bail out first to save face.

 

[Snow1964]

I think the problem with renegotiation is twofold, will upset the losing bidder if it resembles what they bid (or ends up even lower standards) to the bid that got rejected. It will also set a bad example (although East Coast did this) just accept burning through your deposit/retainer and you don’t have to incur any further losses.

Not been very successful to date, in almost 2.5 years :
facelifted interiors of about half the fleet of about 1500 coaches
repainted virtually nothing,
Had ridiculous staff relations so awash with strikes,
failed to get the 90 class 442s back in service (should all have been by 13 months ago)
Not introduced a single new train into service (the 707s weren’t SWR)

Don’t think they will be missed by many commuters if they fail

 

[Agent_Squash]

I suspect many (not in dft). It appears like many others they went for the money rather than the best delivery, hence they will bail out first to save face.

Stagecoach (and Virgin for that matter) would have a field day with this. The franchise they lost, now been bailed out by Government, and yet when they had the same issue they got OLR?

I’m sure the DfT are just hoping Avanti keeps its hands clean of any trouble - VT was the only TOC that’s had good press when it left!

 

[winks]

agree with above, OLR seems highly likely to me given any potential court action by Stagecoach. OLR gives the DFT flexibility when awarding the next contract or whatever comes out of the Williams Review.

 

[ABDeltic]

Stagecoach (and Virgin for that matter) would have a field day with this. The franchise they lost, now been bailed out by Government, and yet when they had the same issue they got OLR?

I’m sure the DfT are just hoping Avanti keeps its hands clean of any trouble - VT was the only TOC that’s had good press when it left!

Stagecoach had 21 years of experience running SWT, and kept the unions much happier than SWR. Of course the overbidding has everything to do with the strikes - they wouldn't have taken action had SWR not ordered 750 new (DOO) carriages as part of their bid.

It has got worse since First took over but I think it's been forgotten that the last 2 or 3 years under Stagecoach were poor. This malaise started about 6 years ago I think. Not sure when the WICC moved out of Waterloo but a lot of experienced staff left SWT and it's not recovred

 

[Carlisle]

Looks pretty much standard stuff which most franchises have gone through at one time or another.

Yes, northern employees received a pretty similar communication recently

 

[Robertj21a]

The problem is management. Both MD's have been "militant" according to staff in regards to policy. If the operator does change, some of the management changes and the old attitudes go. This is possibly one of those rare cases where instating an OLR might actually make a significant difference.

Perhaps it isn't the management - perhaps it's the fact that it's still the same staff......

 

[Failed Unit]

Is OLR or a management contract likely to improve things? Same applies to Northern and TPE.

Has LNER improved on punctuality, reliability and customer service since the demise of VTEC?

But if things stay the same or the contract is renegotiated it sends out the message. Bid high - fail - renegotiate after a couple of years.

LNERs Performance hasn’t. But the majority of things are outside their control that cause them delays.

customer service has improved. The staff seem much happier and their attitude has improved as a result.

 

[tbtc]

Seems stagecoach got their maths right lost, and will watch first get bailed out

That's what I was coming on to say!

(as well as to wonder whether anyone is going to propose nationalising it as a magic bullet when the two biggest problems seem to be the signalling/infrastructure and the fact that the Unions aren't happy about hundreds of coaches of DOO stock - neither of which are going to be simple for a new provider to resolve any time soon)

 

[TrainTube]

The problem is management. Both MD's have been "militant" according to staff in regards to policy. If the operator does change, some of the management changes and the old attitudes go. This is possibly one of those rare cases where instating an OLR might actually make a significant difference.

But how would this improve the actual service? What management now is done now that is creating a poor service? I'm not counter arguing I'm just not aware of it!

 

[Meerkat]

Repeated mentions of First being “bailed out”.
There isn’t any suggestion of this is there, other than biased union and Labour Party misinformation?
As I understand it the contract states that once they burn through the shareholder funding they can hand over the keys, losing the bond they put up to pay for the DfT admin costs in such circumstances.

 

[Journeyman]

Well, the RMT have got what they wanted.

I've long been convinced that their disputes are far more about forcing franchises to fail than anything else.

 

[Meerkat]

Well, the RMT have got what they wanted.

I've long been convinced that their disputes are far more about forcing franchises to fail than anything else.

i will struggle not to smirk at the RMT if the result is the DfT enforcing DCO and OBS in a new franchise.

 

[Bletchleyite]

i will struggle not to smirk at the RMT if the result is the DfT enforcing DCO and OBS in a new franchise.

Wouldn't that just restart the strikes?

 

[Journeyman]

i will struggle not to smirk at the RMT if the result is the DfT enforcing DCO and OBS in a new franchise.

I know what you mean. I think the month-long strike is going to backfire very badly.

 

[HamworthyGoods]

Be interesting what Stagecoach’s reaction will be like if they reset. As it will send out the message bid what you want - if you get it wrong just renegotiate. Seems stagecoach got their maths right lost, and will watch first get bailed out.

But Stagecoach bid an even more aggressive revenue growth....

 

[Journeyman]

But Stagecoach bid an even more aggressive revenue growth....

Stagecoach actually bid pretty realistically, on a level of risk they were willing to take based on 21 years of experience.

They didn't want it badly enough to make the mistakes First MTR did.

 

[Carlisle]

I've long been convinced that their disputes are far more about forcing franchises to fail than anything else.

I’m not convinced about that, it’s surely far more about the union retaining maximum leverage within whatever ownership system happens to be in place