Who pays for new trains and where do they come from?

[david_VI]

I know the TOC's don't own the trains themselves so surely do not pay for new ones?

I see a lot of people posting on Twitter about certain franchises saying for example "Virgin should run this service because they have better trains etc etc" but surely if Virgin took over a certain franchise they wouldn't bring all their trains with them!

So how does it work with regards to new rollingstock, for example on GEML? We've had the same trains for multiple franchises, so who actually pays for new ones and how is that worked out?

Cheers
David

 

[455driver]

The TOC lease the trains from the leasing companies.

The DaFT state what and how many trains the TOC are allowed.

The TOCs themselves have very little say in either.

 

[muz379]

Nobody buys new trains the DFT believes they fall off of the new train tree when old ones die .

In all seriousness tho the leasing companies are the ones who actually own the trains , the TOC's just lease them from leasing companies . DFT allocates stock .

New trains are usually financed by the private sector

Take the Intercity express trains as an example they where procured by the DFT making a contract with some private sector companies . The private sector companies will finance the purchase of the new trains and the train operators who use the trains will pay these private sector companies to use the trains .

 

[antharro]

Interesting. With the IEPs, did any of the TOCs get a say as to their configuration (engines, seating, layout, etc) or was it all decided by the DfT?

 

[WatcherZero]

In a few but notable cases the Goverment has tendered them but generally the Franchise will issue a tender for rolling stock, they will decide what train and how many they want to buy, they will then tender for a leasing company to finance the deal by buying the trains and then leasing them to the franchise.

With IEP the TOCs have a say on seating arrangement, catering provision and livery, everything else was decided by the government.

 

[NSEFAN]

Interesting. With the IEPs, did any of the TOCs get a say as to their configuration (engines, seating, layout, etc) or was it all decided by the DfT?

I believe that there are "optional" interior features for IEP which the TOCs can choose, such as a proper buffet counter rather than just a trolley. However, getting bums on seats is more important than catering, so I would expect this to mean a downgrade of facilities on routes currently due to receive IEP trains.

I see a lot of people posting on Twitter about certain franchises saying for example "Virgin should run this service because they have better trains etc etc" but surely if Virgin took over a certain franchise they wouldn't bring all their trains with them!

I wish more of the public understood this. They see a private company running the trains and assume that the company has control over everything. The TOCs and front line staff end up being treated like a punching bag for bad days, when most of the problems can be attributed to a lack of investment at some point (which is ultimately an issue for the DfT, given they run the show!)

 

[ajdunlop]

The thing that always confuses me is that when new trains do come along the TOC declares how wonderful they are but if they don't buy them what is the expense to them. Will they pay more to lease newer trains? Do northern pay a lot less for their trains than say Virgin or FTPE (per carriage)? The Network Rail access charge might change with different trains but I believe new trains can reduce as well as increase this depending on their impact on the infrastructure.
The TOC will presumably have to pick up the tab for branding the train and training staff and drivers.

 

[NSEFAN]

I believe that track access charges can be found here:

http://www.networkrail.co.uk/using-our-network/cp5-access-charges/

Different kinds of stock will indeed incur different costs, depending on the traction type and weight per axle.

 

[Envoy]

Would TOC's actually prefer to keep say Pacers because they are cheaper to rent than new trains and hence the TOC could make more profit?

 

[87019Chris]

ROSCO's (rolling stock operating companies) Purchase the trains at a massive cost, then lease them to TOC's through the DaFT. After a period of time on lease the ROSCO's will make the purchase cost back and then many more ££££££££ in profit. ROSCO's are companies like Angel trains, and I believe HBOS or a subsidy also owned a one, Eversholt Rail and Porterbrook.
Hope this helps a bit.
Chris

 

[LNW-GW Joint]

ROSCO's (rolling stock operating companies) Purchase the trains at a massive cost, then lease them to TOC's through the DaFT. After a period of time on lease the ROSCO's will make the purchase cost back and then many more ££££££££ in profit. ROSCO's are companies like Angel trains, and I believe HBOS or a subsidy also owned a one, Eversholt Rail and Porterbrook.
Hope this helps a bit.
Chris

With a 20-30 year life, the Roscos won't buy trains without some guarantee that they will be used for a significant period of time.
That's why new franchises are the point when new trains are ordered, as they get 7-10 years guaranteed use.
Sometimes the DfT has to step in and issue a longer term guarantee, so the Roscos know they stand some chance of getting their money back.

Further, some recent deals have been funded by the manufacturers themselves.
For IEP, Hitachi (and its banks) will own the trains and lease them directly to the TOCs.
The TOC is actually leasing trains/depots/maintenance in one package in units of "diagrams", with the availability risk being on the manufacturer.

The TOCs have a big say in refurbishment or upgrades, as they are paying directly for them in increased leasing charges.
The other driver is legislation which might force upgrades to keep trains in service beyond a certain date (like disability regulations kicking in in 2020).

 

[david_VI]

Cheers guys, thats a lot clearer. I'm not a company man but do get annoyed when people complain about the trains when the company has little to do with them. For example Abellio has said Scotrail will get new trains, yet down here we have to deal with refurbishing old ones.. I suppose that shows its not down to the company.

 

[HSTEd]

The glorious and undying free meerkat provides the trains.

Which means the ROSCOs get to make absurd sums of money out of old trains, and then even more absurd sums out of the new ones - again as the meerkat commands.

 

[455driver]

In a few but notable cases the Government has tendered them but generally the Franchise will issue a tender for rolling stock, they will decide what train and how many they want to buy, they will then tender for a leasing company to finance the deal by buying the trains and then leasing them to the franchise.

With IEP the TOCs have a say on seating arrangement, catering provision and livery, everything else was decided by the government.

DaFT has to approve all new trains, the TOCs can ask for specific trains but it is up to DaFT whether they get them!

As for IEP, that is purely a DaFT decision but the TOCs can specify the interiors (as long as DaFT approve) although DaFT have stated how many seats the sets must have, hence FGW doing away with the Travelling Chefs now (so it forgotten about) because once the number of seats have been squeezed in there isnt enough room for a food prep area except behind the cab (crumple zone) at the 1st class end so if they were to provide hot food to Standard Class either the passengers would have to walk through 1st or the orders would have to be served by on train staff who would have to walk through 1st. Neither would be acceptable so get rid of the TC now so people dont put 2 and 2 together and work out its because of the new trains which only start service 2 years after the Chefs were withdrawn.

 

[WatcherZero]

Daft doesnt have to approve all new trains and dont normally have influence over TOCs signing deals for cascaded stock, if they are being asked to subsidise the operation of additional or more expensive stock (provide more money) then they do get a say as they can withhold subsidy if they dont like them. Some tocs however dont rely on subsidy for operation and have totally bypassed the Dft in procurement.

 

[pablo]

Banks create the money out of thin air by the process known as fractional reserve banking. The Governmint lets them do it. The Banks lend it to the Roscos who buy the trains. Often Banks and Roscos are indistinguishable from each other. i.e. they are the same thing. It's a wonderful Fairyland.

 

[muz379]

Banks create the money out of thin air by the process known as fractional reserve banking. The Governmint lets them do it. The Banks lend it to the Roscos who buy the trains. Often Banks and Roscos are indistinguishable from each other. i.e. they are the same thing. It's a wonderful Fairyland.

Banks also have another magical fairyland machine which allows them to print even more money

They can still make massive volumes of money leasing life expired stock that has been paid for many times over .

 

[jon0844]

I wish more of the public understood this. They see a private company running the trains and assume that the company has control over everything. The TOCs and front line staff end up being treated like a punching bag for bad days, when most of the problems can be attributed to a lack of investment at some point (which is ultimately an issue for the DfT, given they run the show!)

There were certainly a lot of Tweets when GTR took over from FCC about them still 'running the same old trains'.

Even someone who doesn't fully understand things surely can't imagine that a new operator comes in and brings 150+ brand new trains with them. Where did they come from? Did the TOC just rock up to a rolling stock dealer that had a hundred or more trains ready and waiting to be purchased?

 

[NSEFAN]

There were certainly a lot of Tweets when GTR took over from FCC about them still 'running the same old trains'.

Even someone who doesn't fully understand things surely can't imagine that a new operator comes in and brings 150+ brand new trains with them. Where did they come from? Did the TOC just rock up to a rolling stock dealer that had a hundred or more trains ready and waiting to be purchased?

This is the problem. Some passengers don't understand the railways at all, although they magically become experts in times of disruption. "Why don't they just run more trains?" :roll:

 

[Murph]

A point frequently missed by the general public on this subject, is that ultimately the travelling public and/or taxpayer always end up paying for them. Nationalisation or privatisation, leased, bought, whatever, the cost always ultimately lands on tickets and/or DfT subsidy/premium. The banks, manufacturers, ROSCOs, TOCs, etc, whoever stumps up the vast cost for them initially only provides financing to spread (some of) the cost over time.

 

[ian959]

Where do trains come from?

Well there is a mama train and a papa train and when they go into a tunnel together they do some naughty things and hopefully make a new train.



I think that is DaFT Procurement Policy No.1...

 

[jon0844]

Well there is a mama train and a papa train and when they go into a tunnel together they do some naughty things and hopefully make a new train

IEP clearly being the result of an HST and Mk4 getting 'friendly' after a night out.

A point frequently missed by the general public on this subject, is that ultimately the travelling public and/or taxpayer always end up paying for them. Nationalisation or privatisation, leased, bought, whatever, the cost always ultimately lands on tickets and/or DfT subsidy/premium. The banks, manufacturers, ROSCOs, TOCs, etc, whoever stumps up the vast cost for them initially only provides financing to spread (some of) the cost over time.

I think if the moaners knew that, they'd stop immediately demanding new trains and consider whether refurbishing the ones they're currently using as possibly a better idea.

Obviously there comes a point where new trains are the only viable option (crash worthiness, complying with new regulations etc) but there are plenty of 20+ year old trains that have another 20+ years in them.

 

[59CosG95]

The glorious and undying free meerkat provides the trains.

Which means the ROSCOs get to make absurd sums of money out of old trains, and then even more absurd sums out of the new ones - again as the meerkat commands.

Do they get a free meerkat toy?

 

[455driver]

Do they get a free meerkat toy?

Yes, one for each new unit!

 

[jon0844]

Simples.