First win Intercity West Coast franchise

[HH]

Joint program setup between Virgin and Network Rail with the work carried out by Balfour Beatty, £90m spent by NR on 17 Virgin station car parks on the WCML which Virgin repays over time through higher station leasing charges. Proposal and scope of works originated from Virgin as far as I know. Virgin couldnt do the work directly as the franchise prevents them from directly acquiring assets that their successor would be responsible for. I believe the repayment time was 3 years (end date of the franchise) but I may be wrong.

You are. It went on the RAB, which means that First will be picking up the bill where Virgin left off. Unless Sir Dick is successful of course.

 

[Wath Yard]

And at heart I've been saying that the additional amount DfT asked for was way too low. IMO the VT amount was also too low! I would have asked for an amount equal to their total EBIT in both cases. That would mean (sort of), "walk away and you make no profit".

The Telegraph also ran an article last week saying that both First's and Virgin's bids were unrealistic. It would be quite amusing if the DfT is forced to reconsider and then gave it to Abellio.

 

[WatcherZero]

You are. It went on the RAB, which means that First will be picking up the bill where Virgin left off. Unless Sir Dick is successful of course.

Yep but when on over a very compressed timescale of just a couple of years so that it didnt extend past the franchise end. But if you want to go there, Firsts station fund in the new franchise is just £21m, Virgins bid was £60m to be spent on stations.

 

[SprinterMan]

The Telegraph also ran an article last week saying that both First's and Virgin's bids were unrealistic. It would be quite amusing if the DfT is forced to reconsider and then gave it to Abellio.

That would be the craziest thing ever. Abellio would go from being a bit part player with half of Northern to running 2 major franchises in less than a year. I wonder if GA staff would get free travel on the west coast.

Adam

 

[Royston Vasey]

Having flown on Virgin Atlantic, the interior reminded me of a Pendolino - IE... it was already quite worn and dated; I was quite unimpressed considering the "Virgin Brand".

I think I'd agree with this. Virgin Atlantic prides itself on being cooler, younger and slicker than BA. I think Virgin Upper Class is superb, BA's Club World is an excellent product but probably a bit more conservative. So up front BA probably falls a bit short, albeit certainly not on staff professionalism and attentiveness. At the back, Virgin's service and attention to passengers leaves a lot to be desired, not many frills, the attitude of staff I have found wanting and the interiors tired. And little things like limiting hand luggage to 6kg (no limit on BA) for no apparent reason. I thought I was checking into Ryanair!

Doesn't that sound familiar to the West Coast first and standard products? Virgin's first class service (in the week at least) is perhaps the best there is, but in the cheap seats it falls short on comfort, facilities and passenger environment/focus compared to EC for example. I would hope First will address this and they deserve a chance to do so after their vast improvement on the Western.

(Aside from that, for me it's easier to cross apply tier points and miles on Oneworld so it's easier to earn which is another plus to BA's package - status brings a step change in service, perks, upgrades, lounges, but that's another thread!)

 

[HH]

Yep but when on over a very compressed timescale of just a couple of years so that it didnt extend past the franchise end. But if you want to go there, Firsts station fund in the new franchise is just £21m, Virgins bid was £60m to be spent on stations.

It doesn't work like that. First would have been paying as much as Virgin, and over the whole franchise life.

Investment is another matter; I have already said that I consider First's £22m to be scandalously small. I've not seen Virgin's number quoted anywhere that I recall, but I imagine that all the other bidders put in considerably more.

 

[Oliver]

I've not seen Virgin's number quoted anywhere that I recall, but I imagine that all the other bidders put in considerably more.

"I imagine".....how can you form a useful opinion on the basis of imaginary facts?

 

[AndrewP]

Investment is another matter; I have already said that I consider First's £22m to be scandalously small. I've not seen Virgin's number quoted anywhere that I recall, but I imagine that all the other bidders put in considerably more.

As mentioned this will only be capital and not revenue (maintenance) spend and will also exclude any commercial investment i.e. where income can pay for it.

Having been involved in both capital projects and maintenance on buildings I know it is easy to make projects into 'grouped maintenance' and capitalise maintenance into projects so don't read too much into this.

 

[fgwrich]

Reading some of the comments on First Great Western's Facebook page I actually feel very sorry for them. Comments like "There's no way you're getting your hands on our West Coast Mainline", "We don't want you running the West Coast Mainline", "Be prepared for protests... we're not going to let you get your incompetent hands on the West Coast line without a fight.", etc, etc. A lot of these people really don't have a clue. A lot of them think they're going to get an abysmally bad service come December. Some people even think all the existing Virgin trains will all go, and First will put all their HST's and DMU's on these services!!!

The one irony ive noticed about this whole situation - and this just proves the point about how uninformed / stupid people really are. Take a look at Transpennines Facebook page, very little 'boatrocking' from the save Virgin brigade - most of which claim to live in the area and use Virgin everyday but hate First, whilst the poor staff at FGW seem to be taking most of the critism / flack for the WCML bid.

 

[Pen Mill]

First posted the figure of £190 million subordinated loan in their post-"success" presentation document.

My questions are :- did they have to do this ? and would the information have been available to the other bidders had they not done so ?

I guess what I'm asking is ' did they inadvertently shoot themselves in the foot ?

As a matter of interest , does anyone know what VT's subordinated loan was ?

 

[Lee W]

Do we know any more is there now a leagal challenge if so how is the gov going to handle this

 

[Ferret]

The one irony ive noticed about this whole situation - and this just proves the point about how uninformed / stupid people really are. Take a look at Transpennines Facebook page, very little 'boatrocking' from the save Virgin brigade - most of which claim to live in the area and use Virgin everyday but hate First, whilst the poor staff at FGW seem to be taking most of the critism / flack for the WCML bid.

That's the thing - unfortunately, partly because the standard of journalism in this country is so woeful, people haven't a clue about how the franchise system works. They like to pretend they do because they've listened to the uninformed wibblings of some crap journalist in the Sun, and this results in people venting their spleens on faceache, thus perpetuating the myths. Still, never mind - I enjoy seeing people demonstrate their ignorance!

 

[Wath Yard]

First posted the figure of £190 million subordinated loan in their post-"success" presentation document.

My questions are :- did they have to do this ? and would the information have been available to the other bidders had they not done so ?

I guess what I'm asking is ' did they inadvertently shoot themselves in the foot ?

As a matter of interest , does anyone know what VT's subordinated loan was ?

In one of his interviews Branson stated Virgin were asked for £100 million less, though I don't know if this is correct.

I think get out clause is probably irrelevant anyway. The court will be interested in the procedure, whether it was legally sound and fair, and whether it was followed. They're not going to be interested in pounds, shillings and pence.

The most infuriating part of this Judicial Review is that it is going to examine whether the DfT followed the rules, yet for the past week Branson has been demanding his 'right' to operate the franchise, that the DfT listen to the people, and that Parliament decide. None of these things are in the franchise procedures.

 

[Ferret]

The most infuriating part of this Judicial Review is that it is going to examine whether the DfT followed the rules, yet for the past week Branson has been demanding his 'right' to operate the franchise, that the DfT listen to the people, and that Parliament decide. None of these things are in the franchise procedures.

I wonder what Branson would be saying if he'd have won, and First Group were carrying on like this, hiring lawyers, and generally turning the whole thing into a circus?

 

[eastdyke]

I am thinking that RB may have privately accepted that FirstGroup have won the franchise.

But that the costs to Virgin Trains Ltd for a Judicial Review may be somewhat less than the profits that may accrue from a delayed handover.

Entrepreneur!!

 

[All Line Rover]

An interesting press release from Virgin:

New Services – our bid also proposes new direct services to Telford/Shrewsbury/Blackpool/Bolton but they would start a year earlier than FG. We would also double the frequency to Preston and increase calls to North Wales/Nuneaton/Milton Keynes and speed up journey times between Euston and Glasgow. In addition we would create new services to Stirling, Motherwell, Hartford, Liverpool South Parkway, and further enhance services for Gobowen/Chirk/Ruabon/Wrexham, increase journey opportunities between Milton Keynes/Rugby/Stafford to the North West and increase calls at Tamworth/Lichfield.

· Trains – we would replace all of the Voyager trains with 21 6-car “Baby Pendolinos” which would mean no diesel operation over electrified lines, delivering the best environmental solution and an all Pendolino fleet providing the best passenger environment. FG appears to be retaining all of the Voyager fleet but it is not clear whether this is a firm commitment to do so or that they have the option to redeploy them to other routes. Assuming they do retain all of the Voyagers, FG would be providing 4% more seats than we would on a daily basis. The investment in fleet would be £385m, but no contract is in place for FG.

· On Board Service – we would replace the current WIFI system with a completely new state of the art system capable of growing with passenger needs, as enhancing the current system is not feasible. There would be a complete On Board refresh. All of this would support the enhanced at seat complimentary service in First Class and a new at seat service for Standard Class. The Virgin investment in the On Board service is £109m, but there are no details as yet from FG.

· Track – to deliver the improved journey times working with Network Rail we would undertake a number of infrastructure upgrades including enhancement to allow the Pendolino to reach a top speed of 135mph in order to improve a number of journey times. This Virgin investment would be £125m, but there is no firm commitment in FG statements.

· Stations – As with FG we would install ticket gates and undertake a number of station improvement projects. We would also create more car parking, install more ticket machines and introduce smart cards. CCTV and information points would also be installed. The investment for stations totals £99m. FG has said they will invest £22m in this area.

· Passenger Services – we will design and develop a revolutionary new Centralised Booking Engine (CBE) which is unique to the industry. It pulls together all of the many industry systems and provides the passenger with a one stop shop experience. As part of this we will introduce a new customer experience system which includes a loyalty scheme in partnership with a major scheme provider. The investment in this area is £39m, but there is no detail in this area from FirstGroup
Including a number of other projects not listed above we are planning to invest nearly £800m in the franchise. FG has said its investment package is worth £350m but there is little detail of how or whether this is to be spent. To help customers and MPs understand,

The additional stops are interesting, although I believe Gobowen, Chirk and Ruabon to be utterly pointless, considering the demand for direct London services from those stations is incredibly low. Are they actually proposing to run the Shrewsbury to London service via Wrexham, which would take an age? There is more demand for direct London service from Nantwich! (And theoretically it would be possible to run the Shrewsbury to London service via Crewe).

Replacing all of the Voyagers is also interesting. How do they propose operating the North Wales services, as well as the new services that partly run along non-electrified routes?

It's also evident that they propose to replace "The Shop" with an at-seat service similar to CrossCountry. Hopefully with better food, though!

 

[Polarbear]

In addition to the legal challenge, Virgin have also issued a challenge to First Group regarding their bid & the associated commitments. The press release on the VT website also lists some of the bid details that Virgin would implement should they have been successful.

http://mediaroom.virgintrains.co.uk/2012/08/virgin-challenges-first-group-on-west.html

 

[Wath Yard]

Wonderful, more spin and lies. :roll:

If Virgin ave signed a contract for 21 6-car EMUs then they are rather stupid - they haven't got a franchise to run them on.

 

[F Great Eastern]

It's very easy to say what is in your bid after the competition winners are forced to publish theirs, it would be nice to see if the so called things they are talking about actually were in their bid, the reason I say that is because of the fact is they said they were going to publish such details a week ago, yet it's took them this long.....

I'd be very surprised if they placed an order through the fleet, but again they seem to gve the impression that they will own the trains, I'm sure there is going to be a Rosco.

I was hoping that with the process now going through the courts, Virgin would shut up and just go about it's business professionally and not try and carry out another war through the media, never less it seems the tactics of trying to bash First in public and create a slanging match are continuing, indicating they're trying to get the department to have a change of heart, this suggests they are not that confident of winning the legal case, based on the fact you would assume they would let the lawyers do the talking.

 

[Retorus]

I just want Virgin to disappear now, this is incredibly tiresome.

 

[LNW-GW Joint]

Wonderful, more spin and lies. :roll:

If Virgin ave signed a contract for 21 6-car EMUs then they are rather stupid - they haven't got a franchise to run them on.

What I'm sure they mean is that a deal is done with Alstom but is dependent on the franchise award.
Virgin's goodies list trumps First's in my book.
Not sure how they intend to work the non-electrified lines, though.

 

[F Great Eastern]

Despite what they seem to believe, Virgin are not rulers of transport in this country, but the way that statement is worded is almost like they are a regulator and in-fact are more powerul than the DFT as it seems everyone needs to justify everything to them!

Hate to break it to Virgin, but it's not up to them to decide what bid is best, or for them to ask questions, that is the DFT's role, although it seems they are now getting very confused.

 

[ainsworth74]

Not sure how they intend to work the non-electrified lines, though.

They'd have to drag them with 57s I guess. I seem to recall that the idea was that the couplers would be permanently deployed on the mini-390s to make it quicker to couple up.

 

[F Great Eastern]

“Taking all this into account, we find it impossible to believe that the FG’s bid can deliver more improvements for customers, which is why the Government scored it as less deliverable than the Virgin bid,” said Mr Collins.

That is the best line I've seen for a long while. If there is less that will be improved, then surely that makes it more easy and straight forward to deliver. The more you propose, the more complex and hard it is to deliver.

 

[eastdyke]

What I'm sure they mean is that a deal is done with Alstom but is dependent on the franchise award.
Virgin's goodies list trumps First's in my book.
Not sure how they intend to work the non-electrified lines, though.

The 'lists of goodies' count for absolutely nowt in the Judicial Review - and that is where we are.

 

[F Great Eastern]

The 'lists of goodies' count for absolutely nowt in the Judicial Review - and that is where we are.

Exactly, that is my point, resorting to such tactics gives off the distinct impression they are not confident of winning the Judicial Review and instead are simply lodging the review to whip up an even bigger fuss in the extra time they have given themselves whilst the JR process takes place.

 

[Stats]

An interesting press release from Virgin:

*Grabs popcorn and gets comfortable*
--- old post above --- --- new post below ---

Not sure how they intend to work the non-electrified lines, though.

Virgin have said on twitter that mini-pendolinos were to be hauled by new Vossloh locos.

 

[willc789]

Dare I say its more fodder for the "we hate first/love virgin" groups? As prevously mentioned, it will only stir up more headlines but the likelihood of it impacting on the JR is slim at best id have thought

 

[swt_passenger]

Track – to deliver the improved journey times working with Network Rail we would undertake a number of infrastructure upgrades including enhancement to allow the Pendolino to reach a top speed of 135mph in order to improve a number of journey times. This Virgin investment would be £125m, but there is no firm commitment in FG statements.

Haven't they been pushing this for a few years, yet it was always said they couldn't do this without cab signalling. (IIRC their point of view was that cab signalling was not required until 140 mph, but the rules were that it was required for all speeds greater than 125 mph.)

So have they now got a cab signalling system in mind - or is it still a 'vapourware' upgrade as it was a few years back?

 

[HH]

As mentioned this will only be capital and not revenue (maintenance) spend and will also exclude any commercial investment i.e. where income can pay for it.

Having been involved in both capital projects and maintenance on buildings I know it is easy to make projects into 'grouped maintenance' and capitalise maintenance into projects so don't read too much into this.

Generally the figures people use for "investment" are the biggest that they can muster. I've not seen anything to indicate that First are doing any different; if you have can you point to the source?
--- old post above --- --- new post below ---

"I imagine".....how can you form a useful opinion on the basis of imaginary facts?

OK I know, but I can't say any more than that.