First win Intercity West Coast franchise

[willc789]

I'm sure someone will correct me if I'm wrong, but I think this is what's happened in previous franchise changeovers - only the upper management change.

Yeah I would be under the same impression but was unsure if First would bring in there own senior staff from there existing franchises and intergrate the new staff into the established franchises like FGW.

On a separate note it'll be interesting to see how they refurb the 390's given that some of them eill be less than a year old when they get the keys. Would like to see if they gut them and install the high back seats like the HST's in order to create more space or will simple recover the existing ones. I'd certainly hedge a bet on the 1st class sections being reduced along with the replacement of the shop with a buffet type set up. Would make sence to gut the front 1st class coach of its kitchen, install more seats, do the same with the shop and then take a 1st class coach and turn it into a buffet/kitchen vechile...makes sence in my mind at least although happy to be proved wrong!!

 

[All Line Rover]

So as a regular commuter to Birmingham and a member of the Virgin Traveller Club will I lose everything?

I suspect an East Coast-style loyalty scheme will be introduced. There is mention of a "loyalty scheme," but not one that is restricted to First Class passengers.

 

[RobShipway]

Will First or the DfT be ordering the 6 carriage units?

If First, I wonder if they'll buy them and hold on to them like the HSTs on the GW and using them as a bargaining tool.

I could be wrong, but I would suspect that funding will come from the DFT for the 11 6 carriage units and will more than likely be an add on order to the new Pendolino order with Alstom to the new carriages being added. Unless Bombardier build new Voyager/Meridian diesel/electric trains or Hitachi build more class 395's or more train orders are added to the IEP order.

 

[Proud Salopian]

Wonderful news for Shropshire - but why wait until 2016 - stock cascade - IEP - Voyager with an electric coach?

Gives them four years to think up an excuse not to run from Shrewsbury!

 

[rail-britain]

Would make sence to gut the front 1st class coach of its kitchen, install more seats, do the same with the shop and then take a 1st class coach and turn it into a buffet/kitchen vechile...makes sence in my mind at least although happy to be proved wrong!!

That would not be possible, with Coach K, for passenger safety
However the shop could be removed and a catering facility installed into Coach A (a mirror of Coach K)
Thus both First Class and Standard ticket holders would receive the at-seat catering, as proposed by First InterCity West Coast

 

[David10]

I could be wrong, but I would suspect that funding will come from the DFT for the 11 6 carriage units and will more than likely be an add on order to the new Pendolino order with Alstom to the new carriages being added. Unless Bombardier build new Voyager/Meridian diesel/electric trains or Hitachi build more class 395's or more train orders are added to the IEP order.

The new EMUs will be funded by a ROSCO and least to First. As the extra Pendo carriages are nearly finished and the new trains aren't needed for 4 years won't be an add on. Besides the window to order any more Pendos to the current design has now closed.

 

[All Line Rover]

According to the comments on the BBC Branson's lost all that cash he invested in the Pendolinos and Voyagers (seeing as First are "stealing" them) and now First is going to trash the WCML just like they trashed the ECML. I can understand why First are planning to increase their marketing budget ten-fold to £20m!

 

[142094]

After what I've seen happen on the ECML with GNER (partly) and NXEC, I wouldn't be surprised if in two years time we are here again asking why First are giving the franchise back, and why they overbid for it.

 

[attics26]

now First is going to trash the WCML just like they trashed the ECML.??

I must have been off that day

 

[williamn]

What is a bit sad is that it underlines to other TOC's that it doesn't matter what your passengers think of you, what satisfaction ratings you get - these are of no consequence to the dft and it all comes down to the bottom line.

 

[sonic2009]

now First is going to trash the WCML just like they trashed the ECML.??

I must have been off that day

When did First trash the ECML?

 

[RobShipway]

now First is going to trash the WCML just like they trashed the ECML.??

I must have been off that day

Me too, as First have never run East Coast. They did run the First Great Eastern franchise for a while though, maybe that is what you are thinking about?

 

[sparks2000]

Yeah I would be under the same impression but was unsure if First would bring in there own senior staff from there existing franchises and intergrate the new staff into the established franchises like FGW.

On a separate note it'll be interesting to see how they refurb the 390's given that some of them eill be less than a year old when they get the keys. Would like to see if they gut them and install the high back seats like the HST's in order to create more space or will simple recover the existing ones. I'd certainly hedge a bet on the 1st class sections being reduced along with the replacement of the shop with a buffet type set up. Would make sence to gut the front 1st class coach of its kitchen, install more seats, do the same with the shop and then take a 1st class coach and turn it into a buffet/kitchen vechile...makes sence in my mind at least although happy to be proved wrong!!

The biggest improvement they could make in 1st is to fix the smelly toilets - there's not much wrong with the rest of the set up. I actually prefer the ride to that of the Mk3/4. Standard class could be improved by attaching some Duple buses to the set.

 

[rail-britain]

Will First or the DfT be ordering the 6 carriage units?

First InterCity West Coast have allocated £75m for the new rolling stock
They pay DfT who order the rolling stock, who in turn pay the RoSCo, who then in turn own the rolling stock

 

[Clip]

Interesting readin g of the comment s on the beeb story

408.Andy K
8 Minutes ago
This tory gov't has lost it, sorry but I dont want 185 class trains taking 5 hours to reach london I don't want a huge price hike (which we are getting anyway thanks to the switch in interest rate this gov't gave) I don't have anything against first but this decision is more than a little backward.

Where on Earth did he think up that statement from.

 

[hwl]

Having read First's post announcement presentation and press releases some interesting thoughts occurred not previously mentioned.

The revenue paid back to government if reliant on actual GDP matching OBR GDP projections, if it is more than 4% out in total over the term the revenue to the government could be radically different. [This is obviously to prevent a repeat of GNER scenario when we went into recession and they had bid on the basis of not...]. The base line for this is the OBR spring 2012 forecast, but the OBR summer forecast is 1% lower for 2012 already so they are 25% of the way to paying DfT less than agreed before the franchise has even started. (ignoring the that 2013 and 2014 forecasts have also been lowered to so probably nearer 50%, but we can be relatively certain on the 2012 outturn)

First state that current overall fleet-wide seat occupancy following the partial introduction of the 11car Pendos is just 35%. [I've only ever travelled on rammed peak hour services Euston to Manchester so can't comment on the accuracy of this.] I suspect the additional stops (e.g. MK) might be a very easy way to increase bum on seats and with the extra interchange opportunities spread the load a bit. While slightly slower time due to extra stops might be annoying for existing passengers it appears to be key to generating extra revenue for first.

They also state that the west coast IC route has a very low modal share compared with EC and GW franchises, but then again it is the only IC franchise where there is any significant rail competition on parts of the route - LM and Chiltern. Could we see them try to limit LM and Chilterns abilities to compete with them at their franchise renewal or other significant point such as CP6 planning by leaning on the government not to electrify the other 2/3 of the Chiltern route etc.

 

[Metroland]

Time to sell First Group Shares? I think it's a great shame Virgin didn't win the franchise, and I suspect First Group will go the same way as National Express and GNER.

http://www.moneyweek.com/investment-advice/share-tips/sell-firstgroup-west-coast-mainline-bid-23300

It’s time to sell FirstGroup

If you want to run an inter-city rail franchise in Britain one thing is abundantly clear – you need to be prepared to offer the government lots of money.

That’s what FirstGroup (FGP) has agreed to do today. In return for running the West Coast rail franchise - which links London to places such as Birmingham, Manchester and Glasgow - for the next 13 years it has signed up to pay eye-watering amounts of cash to the Treasury.

Stagecoach (49% owner of Virgin Rail) has given us some numbers that can help here. It was the second highest bidder for the franchise. Its bid committed it to pay the government £8.6bn to run the franchise, or £4.8bn in net present value terms.

Based on FirstGroup’s £5.5bn and Virgin Rail’s numbers, my back-of-the-envelope calculation suggests that FirstGroup’s total cash promise to the government is around £9.85bn.

Given that newspaper reports in recent weeks were suggesting a winning bid might come in nearer £7bn – which itself was considered toppy – it’s no surprise that FirstGroup’s shares are getting hammered this morning.

FirstGroup thinks that’s passenger numbers can grow by 5.8% per year and revenues by 10.4% for the next 13 years. That means they are going to grow faster during the next 13 years then they have during the last ten.

This is surely too optimistic. Besides trying to predict what revenues and costs will be over the next 13 years is virtually impossible.

The problem for FirstGroup shareholders is that the costs of getting the numbers wrong could be very big indeed.

We think FirstGroup shareholders should be very worried. The payments to the government during the first years of the new franchise are not that big. West Coast should make a profit. It’s a few years out when things could get nasty.

It’s worth noting that last year West Coast Trains paid £167 million to the government. It should have paid £214 million, but it didn’t, because revenues did not meet forecasts – a recurring theme in some rail franchises.
We reckon that FirstGroup will have to make average annual payments of £740 million over the life of the franchise. In a weak UK economy, there’s good reason to think that it’s revenue forecasts won’t be met. This could mean that it may not be able to pay the government.

Think this can’t happen? Just look at the history of the inter-city East Coast franchise. The two previous operators, GNER and National Express, both had to give up the franchise because they couldn’t meet their promises.

FirstGroup looks to be in a very similar situation today. It has lots of debt, and a quarter of its profits come from rail franchises that start to expire next year. It needs to replace this income stream. It’s just promised a lot of money to try and do this. There’s a risk that it could face the same fate as National Express.

Just remember, if FirstGroup has to hand the keys back on West Coast, it will have to give up all its other rail franchises as well – a cross default clause of rail franchising.

http://www.moneyweek.com/investment-advice/share-tips/sell-firstgroup-west-coast-mainline-bid-23300

 

[MK Tom]

This appears to be good news for Milton Keynes, and that was the main thing keeping me torn between the two bidders.

Everyone's assuming the 'cascaded stock' has to do with the IEPs - is there a chance they might just be planning to bring a few HSTs across? If you put them on Shrewsbury you can pretty much keep to the timetable despite the 110mph top speed on the WCML for non-tilt stock. They manage it with the pretendolino on Birmingham workings.

 

[davido39]

The interesting thing here is there has been no statement released by the all mighty Souter. I wonder if he is keeping quiet due to the fact his company have/are bidding for franchises elsewhere?!

 

[All Line Rover]

now First is going to trash the WCML just like they trashed the ECML.??

I must have been off that day

That's the opinion of the general public - at least of those who comment on the BBC's website!

 

[sprinterguy]

That would not be possible, with Coach K, for passenger safety

That's not correct, as removing the kitchen from coach K would only open up the carriage to the same passenger saloon length as Coach A at the opposite end of the train. Unless the intention is to provide a bigger safety zone for first class passengers than standard class ones

 

[Bridge189]

That would not be possible, with Coach K, for passenger safety
However the shop could be removed and a catering facility installed into Coach A (a mirror of Coach K)
Thus both First Class and Standard ticket holders would receive the at-seat catering, as proposed by First InterCity West Coast

Yes I think Virgins shops will go and be replaced with an FGW/East Coast cafe bar style arrangement.

 

[Stats]

The interesting thing here is there has been no statement released by the all mighty Souter. I wonder if he is keeping quiet due to the fact his company have/are bidding for franchises elsewhere?!

Stagecoach have released a statement, as they are requried to do as a PLC.

http://otp.investis.com/clients/uk/stagecoach/rns/regulatory-story.aspx?cid=273&newsid=260463

West Coast rail franchise

Stagecoach Group plc ("Stagecoach") is disappointed that its joint venture, Virgin Rail Group, has been unsuccessful in its bid for the new West Coast rail franchise, due to commence in December 2012.

Virgin Rail Group has operated the West Coast rail franchise since 1997, and:

• Has transformed the West Coast operation from a heavily loss-making operation into one that makes significant payments to Government;
• Passenger journeys have more than doubled to over 30 million;
• Last year, the franchise had the highest customer satisfaction of any long distance operator.

We believe that Virgin Rail Group submitted a strong bid for the new franchise, which offered the prospects of continued, high quality services for passengers and a substantial yet deliverable benefit to taxpayers.

Stagecoach and its joint venture partner, Virgin, were both committed to Virgin Rail Group winning the new franchise but only on terms that resulted in an acceptable risk-reward profile and which would add value to the partners' shareholders. We understand that Virgin Rail Group was the Department for Transport's ("DfT") second choice bidder and that the reason it failed to secure the new franchise was because another bidder contracted to pay significantly higher premium payments to the DfT.... (more)

 

[calc7]

You can add me as another person who will miss Virgin Trains. When will advances come open for the 8th of December? Forum meet on the 2107 Wolverhampton to London Euston (which I think is the final VT service into London)?

Yes please!

 

[sprinterguy]

Everyone's assuming the 'cascaded stock' has to do with the IEPs - is there a chance they might just be planning to bring a few HSTs across? If you put them on Shrewsbury you can pretty much keep to the timetable despite the 110mph top speed on the WCML for non-tilt stock. They manage it with the pretendolino on Birmingham workings.

I haven't seen any assumptions here that IEP is related to "cascaded stock" on the WCML: Pretty much everyone is in concensus that it will be Virgin's existing 221s that will be cascaded onto other routes within the franchise by the introduction of eleven new 6-car electric trains, which are widely assumed to be "Baby Pendos" being offered by Alstom.This is fairly clear from the First Group press release.

There will be no HSTs moving across to the West Coast franchise, and the Pretendolino regularly loses time on the Birmingham trains, and would do so to a greater extent on any longer working scheduled for 125EPS timings.

 

[MK Tom]

I'm up for the forum meet too if it actually happens lol
--- old post above --- --- new post below ---

I haven't seen any assumptions here that IEP is related to "cascaded stock" on the WCML: Pretty much everyone is in concensus that it will be Virgin's existing 221s that will be cascaded onto other routes within the franchise by the introduction of eleven new 6-car electric trains, which are widely assumed to be "Baby Pendos" being offered by Alstom.This is fairly clear from the First Group press release.

There will be no HSTs moving across to the West Coast franchise, and the Pretendolino regularly loses time on the Birmingham trains, and would do so to a greater extent on any longer working scheduled for 125EPS timings.

Misread their release as meaning cascaded from other TOCs, my bad.

 

[williamn]

A poll on the Guardian website currently shows that 91% of respondents would prefer Virgin to First.

http://www.guardian.co.uk/money/blo...in-trains-firstgroup-which-best?newsfeed=true

Virgin Trains v FirstGroup: which is best?

FirstGroup has ousted Virgin Trains from the west coast mainline. How do the companies compare?

Train company FirstGroup has won the deal to take over the running of the west coast mainline for 13 years from December, ousting Sir Richard Branson's Virgin Trains in the process.

FirstGroup said it would add around 12,000 seats, with 11 extra trains, and new services to stations including Blackpool, Shrewsbury and Bolton, which sounds like good news for consumers. But how do the companies stack up?

Complaints data from Passenger Focus shows that Virgin Trains was the second most complained about rail company in the year to March 2012, after East Coast. It dealt with 277 Virgin Trains customers who were unsatisfied with the way the company had handled their complaints.

FirstGroup's operators are listed separately by Passenger Focus. First Great Western is third on the list with 237 complaints, First ScotRail was the subject of 128 complaints, First TransPennine Express had 94, First Capital Connect was involved with 64 and seven were about First Hull Trains. In total, Passenger Focus received 530 complaints about the group.

On top of these come complaints about services made to London TravelWatch. Between January and June 2012 it received 66 complaints about First Capital Connect, 15 about First Great Western and 22 about Virgin.

But while FirstGroup received more complaints, it carries many more passengers. It claims it has about 300 million passengers a year, compared to Virgin Trains' 28 million.... (more)

 

[rail-britain]

That's not correct, as removing the kitchen from coach K would only open up the carriage to the same passenger saloon length as Coach A at the opposite end of the train. Unless the intention is to provide a bigger safety zone for first class passengers than standard class ones

Virgin Trains advised me previously the Kitchen could not be removed
However, I had not taken into account a complete refurbishment by another TOC

I agree, it could be removed and reinstated to a similar seating format as Coach A
It looks like 18 seats could be installed, making a similar layout as the other First Class coaches

 

[The Ham]

Be very careful with these numbers.
According to First's post-success presentation , the year on year figures are as follows
From page 18:=
http://www.firstgroup.com/assets/pd...Coast_franchise_award_presentation_150812.pdf
£ Millions

2013 -£11
2014 £26
2015 £106
2016 £178
2017 £265
2018 £325
2019 £390
2020 £443
2021 £498
2022 £552
2023 £602
2024 £644
2025 £697
2026 £739

so it's going to take 4 years before it even matches Today's £160 million.
I dislike back-end loaded solutions immensely because so much can change in that time frame

At least £5.5billion of payments to the government is for running it before the extension, so no doing what they did at GW.

 

[traji00]

I have a question.
The "moderation of competition" clause: will it still exist with this franchise?