Everything would just transfer over. Whoever takes up the baton will probably run a campaign saying that:
(The image shows an East Coast (DOR) travel wallet bearing the slogan "It's business as usual, it's your...East Coast)
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Virgin Trains East Coast franchise to end 24 June 2018 and is temporarily re-nationalised
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Everything would just transfer over. Whoever takes up the baton will probably run a campaign saying that:
(The image shows an East Coast (DOR) travel wallet bearing the slogan "It's business as usual, it's your...East Coast)
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Like it. ''its your' as in it belongs to the people, the taxpayer?
SaveECRewards
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The biggest risk is that the app has an issue that means it's crashing on the day you travel. It's happened quite a few times so I strongly advise against using the VTEC m-tickets for that reason. But the new operator (if there is one) has to honour all valid tickets issued in whatever form.
Having not been on the ECML for some considerable time I was interested to see for myself how things seemed in what must be Virgin's final stages on the route. It was an interesting experience. I went for the 0858 York to London but in fact caught the 0802 running 62 minutes late and running ahead of the 0858. What was really good was the performance of the onboard staff, who produced the customer service exactly as it is supposed to be and cheerfully carried on serving drinks etc even on the later stages of what turned into an 80-minute-late. The train manager was duly apologetic for the delays (though it seemed pretty clear he wasn't getting all the information), and there were members of VT staff at the platform-end at King's Cross offering each passenger individually a delay-repay form. The only fault with VT staff I could identify was at York station, where no-one bothered to tell us on platform 3 that the second of the two London trains running one after the other would actually arrive in London 23 minutes ahead of the first and that those with open tickets would therefore be well advised to wait. The actual run of the delayed 0802 was proof that today's railway industry is interested only in the public performance figures and, once a train is into the repay area, doesn't give a damn how much more delay it inflicts on passengers on that train. (The same was true with the two other trains I was on today, though not quite as badly as with the ECML working.)
With the risk of going OT
I use Booking.com quite often for my own hotels and many independent places will remind me to book direct as it is cheaper. I have yet to find one that is actually cheaper. Quite often you can walk into a hotel and request a room and be told (to pick an example) £100 for the night and you can look online at that very moment and booking.com has the same room for £65. You also get a little bit of additional protection from them if things go wrong.
If VTEC started with that game I’d likely stop using them.
To be fair, with a service running that late it was probably unclear that would necessarily yet happen; such a decision to allow one to be overtaken by the other at Retford may well not have been a clear choice that would present itself at that stage, let alone had the decision been made and communicated to station staff.
Thats before we get to the perils of describing "open tickets" over a PA...
It wasn't overtaken at Retford. It was stopped on the up fast in Doncaster station, then put on to the up slow, and it was not passed by the 0858 off York until it had been seriously slowed again at the approach to the junction with the fast at Loversall Carr (?), so it must still have been quite a few minutes clear of the 0858 on the approach to Doncaster. Then the delays just kept on coming ... This was a seriously lousy run, only made tolerable by the plentiful supplies of coffee and water.
Same points apply tho.
DfT getting a bit of a kicking from the Commons Public Accounts Committee.
Nothing about "a small number of months and no more" though.
https://www.edinburghnews.scotsman....ne-growth-forecast-was-wildly-wrong-1-4731219
Nothing about "a small number of months and no more" though.
https://www.edinburghnews.scotsman....ne-growth-forecast-was-wildly-wrong-1-4731219
diffident
Member
All this goes to show is that there is not an adequate "Stress Test" on those bids to run franchises considered by the DfT. Like the banks since the financial crisis, stress tests ensure that they have the capital and the structure to not end up in another RBS/Northern Rock/Lloyds situation. Like the financial industry, it was nationalising parts of the banking industry that saved the day - and similar parallels can be drawn with the rail industry.
The DfT should stress-test not just the bids against worse-case forecast scenarios, but should also stress-test the companies and consortiums behind those bids.
3141
Established Member
Is there any evidence that current franchise holders aren't strong enough financially to run their franchises? According to various reports, Stagecoach and Virgin may have lost up to £100 million because they've paid the premiums even though their revenue has been well below what they forecast.
The main problem, it seems to me, is that the DfT is too keen to accept a high bid, partly because of pressure from the Treasury, and doesn't actually evaluate bids critically enough, although it always claims that it does.
The main problem, it seems to me, is that the DfT is too keen to accept a high bid, partly because of pressure from the Treasury, and doesn't actually evaluate bids critically enough, although it always claims that it does.
syorksdeano
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Was confused about something the other day. Virgin East Coast commented that they are continuing to invest £140 million into improvements. I can't find the link but I have no doubt it will be mentioned somewhere on this thread.
Given that they was allegedly only able to continue for a few months, why are they still investing in something they are leaving?
Given that they was allegedly only able to continue for a few months, why are they still investing in something they are leaving?
SaveECRewards
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The 140m was the 'Total Rehaul' project. I think all aspects of that are complete, if not there'll just be a few small things left.
The main part of the project was the refurbishment on all the trains. I do wonder how it cost so much though as the main structures of the seats are the same, even the bits in coaches B and M on the mk 4's where there used to be a smoking area still have evidence of where the divider door used to be. It's nowhere as significant a refurb as GNER's Mallard was. Even in the Foodbar if you look up the text at the top is still in the GNER font.
Presumably they are hoping that they'll be allowed to keep the franchise on rearranged terms and so are doing everything that they are required to do so that they remain in the DfT's good books up until the point that they breach the £165million bond.
diffident
Member
In a strictly business aspect - the franchise is operated by a separate limited company from the parent companies - for just such a scenario. They can liquidate it without affecting the parent. But if the parent cannot, or is unwilling to fund it, it is by virtue, insolvent. It could also been seen as fair to say that if Stagecoach for example funded the franchise for its entirety, it would put such pressure on it, that the viability of the wider company as a whole would be brought into question.
I agree with you that the DfT is to blame here, and the figures/finance breakdowns in the bids should be bench-marked against an independent financial assessment and forecast, that way the DfT will be able to immediately spot those that are overstating their numbers, and those that are within realistic expectations.
I heard the news bulletin on the BBC Radio 4 Today Programme, and the DfT response to the Public Accounts Committee's findings is:
The irony being, of course, that the Public Accounts Committee's report concludes that it is the DfT that failed to grasp the complexity of the situation.
The associated Virgin Trains East Coast statement included:
I sincerely hope that that's just the VTEC PR froth generator stuck on auto-spew as per. <shudder>
The irony being, of course, that the Public Accounts Committee's report concludes that it is the DfT that failed to grasp the complexity of the situation.
The associated Virgin Trains East Coast statement included:
I sincerely hope that that's just the VTEC PR froth generator stuck on auto-spew as per. <shudder>
Elecman
Established Member
Grayling won’t allow back to Operator of Last resort as it’s goes against his Tory mantra Public bad Private good. Of course he will just give Stagecoach/Virgin a Management Contract to continue running EC at almost any price they ask
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Precisely. There is always pressure to take the biggest premium, even if "Quality" is supposed to affect the decision. One problem is that DfT don't appreciate the complexities of their own scoring method.
I side with the PAC on this. DfT is prone to patting itself on the back for a job well done, when actually it's made a complete hash-up.
The letting of the TSGN franchise is an excellent example - badly managed from start to finish because they were desperate to get it let (and that in turn was due to the WCML fiasco). And yet Wilkinson presented this as a huge success in public presentations afterwards (before all the brown stuff hit the whirling blades).
It seems to me that the lesson we ought to learn from the various issues what have befallen operators of the InterCity East Coast franchise, is that the financial profile of the business is too volatile.
Rather than being overly concerned about the DfT's assessment of said volatility, which is one of those issues that can be addressed however leaves the underlying problem in place surely we ought to be looking for a way to reduce the underlying volatility in the business.
(This is rather off topic and any further discussion ought to be in a new thread) I would suggest that creating (to some degree) a multi purpose franchise would be a good way to achieve this. In this instance given there is thought being given to reducing the size of the Thameslink Southern Great Northern franchise, surely a good way to give the ICEC franchise a stable revenue base would be to transfer the Great Northern operation into it (perhaps not the Moorgate operation). This would assist with resolving a TSGN issue and an ICEC one.
Rather than being overly concerned about the DfT's assessment of said volatility, which is one of those issues that can be addressed however leaves the underlying problem in place surely we ought to be looking for a way to reduce the underlying volatility in the business.
(This is rather off topic and any further discussion ought to be in a new thread) I would suggest that creating (to some degree) a multi purpose franchise would be a good way to achieve this. In this instance given there is thought being given to reducing the size of the Thameslink Southern Great Northern franchise, surely a good way to give the ICEC franchise a stable revenue base would be to transfer the Great Northern operation into it (perhaps not the Moorgate operation). This would assist with resolving a TSGN issue and an ICEC one.
That makes a lot of sense bearing in mind that HS2 will impact on the number of long distance passengers on the East Coast services.
3141
Established Member
I understand your point, but it would be necessary to make assumptions about how bad the situation of the franchise company might get while the parent was still expected to fund it. If the DfT was going to insist that the parent should go on supporting the franchise whatever happened, there'd either be no bidders, or the bids would be very low. Not many potential bidders would have the financial strength to take on the commitment of funding the franchise operator whatever happened.
There probably should be a greater degree of flexibility built in to a franchise contract, so that adjustments can be made to the premiums required as overall economic conditions change, as they will. Then we get into debates about who should take the risk. But it will still be essential for the DfT to make a better assessment of whether the expectations of bidders are realistic or not.
diffident
Member
If re-nationalisation is out of the question (and who knows which way the current government might play it in the coming years), and the franchise system is clearly flawed, some might say as a result of the DfT's inability to competently run a successful competition, there is a third option.
Instead of taking on a franchise, these companies should bid for a long-term lease of paths. That way, the company that wins say a 30 year lease of paths on the East Coast would have the freedom to run their business the way they liked, and should they fail, it would be an almost certainty that other companies would be quick to snap up the remainder of the lease out of administration. That way, there's less pressure on the Government providing an "operator of last resort", as the lease-holder would continue operating in administration (like most other industry sectors) until a buyer for the lease could be found.
It would also free up the companies to run and amend their business model to cater for swings in the economic system, instead of having to hit potentially unassailable targets they themselves set in the franchise biidding process.
The idea is shockingly simple, and yes, a long-term lease of paths would basically go to the highest bidder.
DenmarkRail
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I've mentioned this before, but how possible could it be to cut the franchise back, and offer the remaining paths to open access operators? 5 smaller operators, rather than 1 main one. I suppose by that point, we'd be loosing the intergration that I desire.
700007
Established Member
I always felt that it was the simplicity, or rather lack of non-competitive destinations that had failed to generate revenue for VTEC. Surely stripping it further won't do it much to generate more revenue however it could save on operating costs?
Every major destination is served by someone else from London with perhaps the exception of Leeds (putting aside the odd EMT).
Every major destination is served by someone else from London with perhaps the exception of Leeds (putting aside the odd EMT).
Kettledrum
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The desperate denials in the PR responses are particularly disappointing.
A DfT spokesperson said: “It is disappointing the committee has produced such an imbalanced report that fails to grasp the complexity of the situation.
“Our franchising model already puts passengers and taxpayers first and has doubled the number of passengers using trains since privatisation reversed decades of decline and under investment under British Rail.”
[It is impossible to put both passengers and taxpayers first....and doubling the number of passengers might have happened anyway. Widespread view seems to be the franchise model is broken, as evidenced by repeated failures, and lousy services on some that haven't failed financially. DfT's denial is arrogant in the extreme.
A Virgin spokesperson said: “We have met or exceeded all of our contractual commitments and have never lost sight of our focus on customers, delivering industry-leading passenger satisfaction, and progressing our £140m investment programme. We believe we are best placed to continue the transformation.”
[No apology for over-bidding from Virgin then]
A DfT spokesperson said: “It is disappointing the committee has produced such an imbalanced report that fails to grasp the complexity of the situation.
“Our franchising model already puts passengers and taxpayers first and has doubled the number of passengers using trains since privatisation reversed decades of decline and under investment under British Rail.”
[It is impossible to put both passengers and taxpayers first....and doubling the number of passengers might have happened anyway. Widespread view seems to be the franchise model is broken, as evidenced by repeated failures, and lousy services on some that haven't failed financially. DfT's denial is arrogant in the extreme.
A Virgin spokesperson said: “We have met or exceeded all of our contractual commitments and have never lost sight of our focus on customers, delivering industry-leading passenger satisfaction, and progressing our £140m investment programme. We believe we are best placed to continue the transformation.”
[No apology for over-bidding from Virgin then]
Helvellyn
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With the Thameslink upgrade coming on line I'd argue that the East Coast should take on the Cambridge Express services from King's Cross. That would add a firm commuting base to the franchise (albeit on one route) whilst allowing competition in the form of the Thameslink services.
I also think a better way forward should be a simple profit share (for profitable franchises) rather than bidders effectively trying to guess on the premiums they can pay. That is what the problem is with VTEC - it is profitable it is just that growth is not as high as expected so once you add in the premium payments to DfT that is where the losses for Stagecoach/Virgin come in.
I also think a better way forward should be a simple profit share (for profitable franchises) rather than bidders effectively trying to guess on the premiums they can pay. That is what the problem is with VTEC - it is profitable it is just that growth is not as high as expected so once you add in the premium payments to DfT that is where the losses for Stagecoach/Virgin come in.
Isn't that basically how it is anyway but they have to lease the stations as well effectively?
If it was only a lease of the paths who'd run the stations?
And if they leased them the stations as well wouldn't it effectively be the same as now just with a much longer agreement?
NorthernSpirit
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Integration could still be there even if it meant having half a dozen companies running services up and down the ECML. Maybe using the Open Access model could be the way to go, whereby the entire timetable of both OAOs and TOCs are integrated into a single pre-defined timetable where potential TOCs and OAOs bid for the paths along the line with the more lucrative ones costing more.
Plus the services would be all shown in a single generic ECML timetable which would show all services no matter who runs them rather than just the current set up which shows the single East Coast services. OK, there is a risk that if a path isn’t bided for then HM Government would have to step in and run it themselves with whatever they can lay their hands on even if its some class 321 with an onboard trolley, its better than nothing.
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