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First will not take over West Coast from December
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LNW-GW Joint
Veteran Member
The ICWC franchise short list was announced in February 2011. This included Virgin, First, Abellio and Keolis/SNCF.
It could probably be argued (eg by DB/Arriva or NX) that enough time has passed for this list to be reviewed, taking the competition back to square one.
The Essex Thameside bids came in last week, so will need to be parked until the process is confirmed.
The GW franchise bids are in progress and are due in on 25 October (ie the hard graft of bidding has already been done).
Who knows what will happen to that.
Both of these were intended to follow the same DfT financial evaluation which is now discredited.
The big question is if a new WC ITT needs to be issued.
It's possible that the only elements of the process which are suspect lie within the DfT's internal control and do not affect the bid content.
On the other hand 5 months have already elapsed since the bids came in, and the bidders may well want to revisit their numbers (if not the content).
Since VT and First (and everybody else) know each other's premium profile it would be invidious to start again on exactly the same ITT terms.
My guess is that we will go right back to the beginning on WC, with a new ITT. Oh joy.
Looking on the bright side, maybe they will do some franchise remapping to muddy the waters a little.
To be mischievous, the new WC timetable will probably clash with EC's, so one will have to be deferred (again).
They will try and find a way of not restarting the other bids, but there will inevitably be some delay.
First has a lot to lose on the upcoming bids, because the whole issue of franchise risk is now central.
It's inevitable they will be marked down on new bids, relative to what would have happened had DfT signed up for WC in August.
On top of this, confidence in the franchising process is shot, and it would not be surprising if the franchise bidders take a dim view of the risks and price accordingly.
And in case this all seems like a game, you can be sure the cost will come out of the rail budget at DfT, and weaken government support for other DfT projects such as HS2.
George Osborne will just have struck out whatever rail announcement he wanted to make next week or in the budget, until McLoughlin "gets a grip".
It could probably be argued (eg by DB/Arriva or NX) that enough time has passed for this list to be reviewed, taking the competition back to square one.
The Essex Thameside bids came in last week, so will need to be parked until the process is confirmed.
The GW franchise bids are in progress and are due in on 25 October (ie the hard graft of bidding has already been done).
Who knows what will happen to that.
Both of these were intended to follow the same DfT financial evaluation which is now discredited.
The big question is if a new WC ITT needs to be issued.
It's possible that the only elements of the process which are suspect lie within the DfT's internal control and do not affect the bid content.
On the other hand 5 months have already elapsed since the bids came in, and the bidders may well want to revisit their numbers (if not the content).
Since VT and First (and everybody else) know each other's premium profile it would be invidious to start again on exactly the same ITT terms.
My guess is that we will go right back to the beginning on WC, with a new ITT. Oh joy.
Looking on the bright side, maybe they will do some franchise remapping to muddy the waters a little.
To be mischievous, the new WC timetable will probably clash with EC's, so one will have to be deferred (again).
They will try and find a way of not restarting the other bids, but there will inevitably be some delay.
First has a lot to lose on the upcoming bids, because the whole issue of franchise risk is now central.
It's inevitable they will be marked down on new bids, relative to what would have happened had DfT signed up for WC in August.
On top of this, confidence in the franchising process is shot, and it would not be surprising if the franchise bidders take a dim view of the risks and price accordingly.
And in case this all seems like a game, you can be sure the cost will come out of the rail budget at DfT, and weaken government support for other DfT projects such as HS2.
George Osborne will just have struck out whatever rail announcement he wanted to make next week or in the budget, until McLoughlin "gets a grip".
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Yes indeed. Although I think all the bids would have shown remarkable similarities anyway, including all having a service to Blackpool.
The main thing that First did was to project growth at such a high level that they needed to create a lot of extra seats. An average 60+% seat occupancy is not something that would be possible, so that's the only deliverable way to reach their numbers (unless First had a crowding model that didn't work and it wasn't spotted by DfT).
Aside from the additional units they proposed to buy then they must have had a long term plan to increase seats on the existing stock, and that means some of their comments around the on-board shop, etc. were somehwat disingenuous.
But doesn't that leave the potential for First failing to make the shortlist and taking legal action, further delaying the process?
northwichcat
Veteran Member
Didn't Renfe also make a bid? They said they were to bid for every franchise in an attempt to get in to the UK market.
Arguably any bidder that was on the shortlist last time and doesn't make it again would be in the same position as First, who didn't end up being awarded the contract - preferred bidder has no legal standing.
But I don't think anyone will take legal action.
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No. They didn't pre-qualify.
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northwichcat
Veteran Member
Unless they proposed off-peak service cuts or taking 11 car Pendolinos out-of-service for the off-peak period.
Sorry, I wasn't suggesting that First had any special status over the others, I just named them as one of the bidders that could potentially not make the shortlist. Is there no risk at all that if one was not shortlisted (even Virgin) they could end up taking legal action?
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LNW-GW Joint
Veteran Member
Yes, anything's possible. We are in free-fall!
It all depends on if they go a for a quick fix, or re-do the franchising process from scratch.
I expect the latter (the Treasury might insist on it).
You can't mess about with EU procurement either.
It's a body-blow for First (even if no part of their bid was faulty).
WatcherZero
Established Member
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More practically would Firsts shareholders even let them bid again? Their shares fell when they won the contract from about 260 to 240 because analysts thought they had overpaid, they rose a bit back to 260 where they had been pre franchise award after the conference call when they managed to persuade investors that the actual risk to First itself of a franchise collapse was pretty insignificant. Today its down 20% to 196 (19.71% at the moment) and traders are saying that a permanent negative 50p adjustment to the groups share price should be made as a result of this news. Combine that with their inability to raise more than a couple of million from a pledge to raise £100m from bus disposals.
Except that doesn't spell growth, does it? They need more seats, not to make some trains more crowded.
You're misrepresenting what happened. Before rumours that they had won started circulating, their shares are where they have fallen back to today. Clearly then the market thought ICWC was a Franchise worth having on the terms they bid.
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No. If the process starts again, First will be in direct competition with whoever else decides to bid, and their success or failure will depend on what they submit as the PQQ. I think competition will be tougher second time around.
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LNW-GW Joint
Veteran Member
Yes they did, also Trenitalia.
But they were excluded at PQQ (ie they did not make a full bid).
I don't think I saw these two during the PQQ for GW and the other more recent franchises.
WatcherZero
Established Member
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No they are about 40p lower today than before rumours started circulating that they had won in early august (and even they were already pulling out of a large dive in July) Their currently 65p lower than after the conference call and down 50p on yesterdays closing trade.
http://uk.finance.yahoo.com/q/bc?s=FGP.L&t=6m
WatcherZero
Established Member
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Dft have posted an update:
Abrupt wording makes it look a bit dodgy.
Abrupt wording makes it look a bit dodgy.
So Beardy Branson has got his own way again.
But I can't say I'm not overjoyed by the result. Although as time goes on I find myself disliking the entire Virgin brand more and more, I'm happy the desision has been overturned and they've managed to hold onto it for the time being.
From what I gathered they apear to be doing a pretty decent job over on the West Coast, so why change operator? I found it surprising that First would win the contract when from what I've also gatherd they apear to be going a little down hill in the south there.
But I can't say I'm not overjoyed by the result. Although as time goes on I find myself disliking the entire Virgin brand more and more, I'm happy the desision has been overturned and they've managed to hold onto it for the time being.
From what I gathered they apear to be doing a pretty decent job over on the West Coast, so why change operator? I found it surprising that First would win the contract when from what I've also gatherd they apear to be going a little down hill in the south there.
No, FirstGroup's share price reached a low on 12 July. Media reports first surfaced that they were the frontrunner to win the franchise on 15 July.
It simply comes down to who puts in the best bid, it would be unfair to just allow the same company to continue indefinitely without any competition for the franchise.
The first press report I can recall is dated July 15th.
Had an inkling there was developments last night but didnt want to comment further. Suffice to say I imagine this will be sorted in the first half of 2013.
Personally want this sorted out once and for all. I feel for the customers as any delay will impact on any sort of service improvements.
Personally want this sorted out once and for all. I feel for the customers as any delay will impact on any sort of service improvements.
Geezertronic
Established Member
No, there were issues with the process that the DFT have admitted to. Comments such as that only make you look DaFT...
Donny Dave
Established Member
Firstly, apologies if the points I'm going to raise have been covered, I reached these 2 posts and have not bothered to read the rest of the thread.
Secondly, I am going to admit an element of bias towards First here, as I live in an area covered by 1 of their franchises, but no where near the WCML. However, I am not a "fanboi" of either company.
I guess you have never used a train on any First Group franchise then. All of their current franchises are performing well. Most problems they have are not of their own doing, but instead the (Labour) government, specifically not giving them enough stock to run the highly detailed timetable specified in the franchise agreement (FGW), reducing an order for new stock then adding routes to the franchise (FTPE) and ordering some highly reliable stock to be transferred to another franchise and having it replaced with trains that have a history of unreliability (Hull Trains).
Virgin's problems though were of their own making. IE. Insisting that trains continued to run during the WCRM when a blockade was needed to carry out some work. Replacing long(ish) trains with new ones that are totally unsuitable stock for the number of passengers expected.
First Group is a company that specialises in transportation or more accurately, public transportation. What is Virgin's core business?
Firstly, if you have any proof of corruption of the bus privatisation process, I suggest you contact the SFO and pass it over to them.
Secondly, for the part of your post I've highlighted, do you realise that Stagecoach own 49% of Virgin Rail Group?
These "low grade bus companies" as you describe them are doing quite well as rail operators. Unlike Virgin, they are willing to take on the franchises that are not seen as glamorous. IE. The commuter networks, such as FCC, SWT, parts of EMT. They also do not make as much profit as Virgin, who IIRC, make the highest profit (in terms of percentage of revenue) in the entire rail industry. Which company is the bandit now?
Secondly, I am going to admit an element of bias towards First here, as I live in an area covered by 1 of their franchises, but no where near the WCML. However, I am not a "fanboi" of either company.
I guess you have never used a train on any First Group franchise then. All of their current franchises are performing well. Most problems they have are not of their own doing, but instead the (Labour) government, specifically not giving them enough stock to run the highly detailed timetable specified in the franchise agreement (FGW), reducing an order for new stock then adding routes to the franchise (FTPE) and ordering some highly reliable stock to be transferred to another franchise and having it replaced with trains that have a history of unreliability (Hull Trains).
Virgin's problems though were of their own making. IE. Insisting that trains continued to run during the WCRM when a blockade was needed to carry out some work. Replacing long(ish) trains with new ones that are totally unsuitable stock for the number of passengers expected.
First Group is a company that specialises in transportation or more accurately, public transportation. What is Virgin's core business?
Firstly, if you have any proof of corruption of the bus privatisation process, I suggest you contact the SFO and pass it over to them.
Secondly, for the part of your post I've highlighted, do you realise that Stagecoach own 49% of Virgin Rail Group?
These "low grade bus companies" as you describe them are doing quite well as rail operators. Unlike Virgin, they are willing to take on the franchises that are not seen as glamorous. IE. The commuter networks, such as FCC, SWT, parts of EMT. They also do not make as much profit as Virgin, who IIRC, make the highest profit (in terms of percentage of revenue) in the entire rail industry. Which company is the bandit now?
northwichcat
Veteran Member
Relating to the 'install ticket barriers' at all West Coast stations I've just thought how well will that work at Carlisle when on a Saturday there can be more excursion passengers to let through than passengers who have travelled on regular services?
Xenophon PCDGS
Veteran Member
Except in the case of nationalisation proposed by Bob Crow at the meeting of the Select Committee that was televised.
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