First will not take over West Coast from December

[Goldfish62]

http://www.guardian.co.uk/uk/2012/oct/03/west-coast-rail-what-next?newsfeed=true

Have you ever seen a more biased article?

I don't understand. Biased in what way?

 

[Lampshade]

http://www.guardian.co.uk/uk/2012/oct/03/west-coast-rail-what-next?newsfeed=true

Have you ever seen a more biased article?

It's quite neutral by Guardian standards.

 

[sidmouth]

http://www.guardian.co.uk/uk/2012/oct/03/west-coast-rail-what-next?newsfeed=true

Have you ever seen a more biased article?

Looks totally unbiased to me. Just seems like simple school boy accountancy errors were made...

 

[LNW-GW Joint]

http://www.guardian.co.uk/uk/2012/oct/03/west-coast-rail-what-next?newsfeed=true
Have you ever seen a more biased article?

Similar articles are running in the Indy and Telegraph.
Biassed in what way?

 

[chuckles1066]

[Please continue discussion in here regarding the announcement today affecting the West Coast franchise. For reference, the old thread can be found here.]

Looks like Branson has succeeded where others have failed with the discovery of significant flaws affecting the franchising process and so the new franchise is starting to look very hazy

Those West Coast commuters have NO idea how much pain they've been saved by not having First imposed upon them.

 

[northwichcat]

Blackpool Gasjet are running a poll, Blackpool people so far prefer Virgin!
http://www.blackpoolgazette.co.uk/n...st-coast-rail-deal-hits-the-buffers-1-4985732

Given the only time First have operated in the Blackpool area was under the First North Western franchise that had poor punctuality and reliability and only introduced a limited amount of new stock, while Virgin introduced a lot of new carriages - I wonder why.

 

[eastdyke]

Given the only time First have operated in the Blackpool area was under the First North Western franchise that had poor punctuality and reliability and only introduced a limited amount of new stock, while Virgin introduced a lot of new carriages - I wonder why.

? So FTP are stopping short now

 

[chuckles1066]

No, for once it may prove justice wins the day.

Erm, you sure?

There are precedents in other fields.

Virgin tendered a bid to operate the national lottery on the basis that it would be not for profit (i.e giving 100% of all earnings to "good causes", £160m per year as opposed to Camelot's £50m per year).

The Government was about to award it to Virgin but then Camelot countered this by offering to give between £1bn and £2bn directly to the Government coffers as a "franchise payment".

You can see where this is going, can't you?

Camelot then applied for a Judicial Review; the **legal basis** of their argument was the fact that as they were paying the biggest premium to operate the lottery then dammit they should win.

And the judge, God bless him, agreed.

(You need to turn your sarcasm monitors on if you don't get the gist).

 

[Eagle]

Given the only time First have operated in the Blackpool area was under the First North Western franchise...

You'll kick yourself when you see it. :P

 

[HH]

Channel 4 is hinting at corruption saying that both First Group and the Dft made exactly the same basic error in their maths when calculating the security payments of failing to take account of inflation over 15 years. BBC earlier said the Dft made the same accounting mistake twice, first when comparing all the bids and secondly when calculating the specific security payment required by First. Virgins claim that First were claiming more passengers on services than there were seats also turned out to be right, again an error in calculating inflation of passenger numbers.

Do you have a link to this? Nothing I've seen suggests that we have details of the supposed mathematical error, and I don't see what inflation has to do with it (directly) anyway. It should look at gross revenue, which includes inflation as well as other factors.

I've always said there weren't enough seats, even before Virgin, but I haven't seen anything to suggest that DfT have admitted an error in this. Of course it would seem likely if they didn't, but for First to make an error in their "crowding" model, and for DfT experts (likely consultants) not to spot it feels highly unlikely. Not impossible though, these models are very complex.

OK there's nothing new that I can see over at channel 4. They are just parroting DfT: "The department said the errors which have come to light relate to bond amount calculations involving inflation and passenger numbers"

There is no clarity as to what this means, but as I say above inflation is a factor it would be hard to lose on revenue, so it may be that they didn't include it in their discounting. With regard to passenger numbers, my reading is that they didn't look at the overall numbers and consider whether it was reasonable for First to be carrying that many passengers given the size of population of the catchment areas, car ownership, etc. Clearly there are limits to how many train journeys are likely to be taken, and the higher you pitch your number the harder it is to reach.

I still don't think they will have enough seats, on Sunday for instance.

 

[ainsworth74]

With hindsight, the caretaker franchise may not have been such a bad idea as if they had gone straight for the 15 year franchise then it could have ended up getting declared null and void if it used the same process as West Coast.

I suppose so, though by that logic shouldn't GA's mini-franchise be declared null and void?

Still not sure why they didn't just give National Express an extension though.

I don't think anyone outside of the DfT knows for sure. The only thing I can come up with is that it's a punishment (rightly or wrongly) for the NXEC debacle.

 

[northwichcat]

? So FTP are stopping short now

You'll kick yourself when you see it. :P

Well it is technically a joint venture between First and Kelios and the First logo only appears as a very small logo on the front and rear of the 185s, even though the units are in a First Group livery.

 

[Realfish]

Channel 4 is hinting at corruption saying that both First Group and the Dft made exactly the same basic error in their maths when calculating the security payments of failing to take account of inflation over 15 years. BBC earlier said the Dft made the same accounting mistake twice, first when comparing all the bids and secondly when calculating the specific security payment required by First. Virgins claim that First were claiming more passengers on services than there were seats also turned out to be right, again an error in calculating inflation of passenger numbers.

C4 also mentioned the challenge that Virgin had made to DfT (and Ministers?) prior to the planned announcement date, which was the reason for the 24 hour delay. This challenge was in the form of a report that they had had prepared by analysts. You will remember that VT had complained that information about the award to First had been leaked from within DfT

 

[eastdyke]

Do you have a link to this? Nothing I've seen suggests that we have details of the supposed mathematical error, and I don't see what inflation has to do with it (directly) anyway. It should look at gross revenue, which includes inflation as well as other factors.

I've always said there weren't enough seats, even before Virgin, but I haven't seen anything to suggest that DfT have admitted an error in this. Of course it would seem likely if they didn't, but for First to make an error in their "crowding" model, and for DfT experts (likely consultants) not to spot it feels highly unlikely. Not impossible though, these models are very complex.

This is from BBC:

http://www.bbc.co.uk/news/business-19810845

In particular:

What did the Department for Transport get so wrong?

Pretty much everything, it would appear. Or at least everything that matters. Transport Secretary Patrick McLoughlin has described the mistakes as "completely unacceptable", but has given very little detail about exactly what went wrong at his department.

What he has said is that errors were made in evaluating the risks involved with each bid, specifically the way in which "inflation and passenger numbers were taken into account, and how much money bidders were then asked to guarantee as a result"..

 

[northwichcat]

I've always said there weren't enough seats, even before Virgin, but I haven't seen anything to suggest that DfT have admitted an error in this.

But there may actually be enough seats - it's just they are in the wrong place at the wrong time. With every Pendolino originally being 9 carriages, it meant a quiet counter-peak flow would have exactly the same capacity as a busy peak flow, meaning the number of standees on the latter is offset by the number of empty seats on the former.

 

[eastdyke]

I am wondering if the disparity in the required value of any bond comes from taking a figure from the wrong end of a NPV calculation?

 

[Zoe]

I suppose so, though by that logic shouldn't GA's mini-franchise be declared null and void?

There's less room for error considering how short the franchise is, it would not have involved subsidy/premium profiles and risk adjusting over a 15 year period.

 

[HH]

See my edit above regarding passenger numbers and inflation. People are reading things into these words that aren't there. That's fine as long as you make clear it's opinion, not fact.

--- old post above --- --- new post below ---

But there may actually be enough seats - it's just they are in the wrong place at the wrong time.

This is what is meant by not enough seats. The models should be showing the (average, standard deviation) numbers expected on every train. It's no good having 200 spare seats at Blackpool if you are 200 short at Euston.

 

[Woody]

How many more franchises are there in operation now have also been evaluated wrongly I wonder leaving the taxpayer to pick up the mounting bill. West Coast obviously was and I suspect now the two failed East coast franchises were as well and I also have my suspicions about current Great Western franchise.No wonder there is a growing list of "cap and collar" franchises now.John Majors fragmented and expensive pseudo privatised railway has made Britain the laughing stock of the railway world and the Government needs to get off its dogmatic railway horse while there is still time before the whole railway system in this country implodes financially.

 

[Zoe]

How many more franchises are there in operation now have also been evaluated wrongly I wonder leaving the taxpayer to pick up the mounting bill. West Coast obviously was and I suspect now the two failed East coast franchises were as well and I also have my suspicions about current Great Western franchise.No wonder there is a growing list of "cap and collar" franchises now.John Majors fragmented and expensive pseudo privatised railway has made Britain the laughing stock of the railway world and the Government needs to get off its dogmatic railway horse while there is still time before the whole railway system in this country implodes financially.

It's a good thing then that Virgin were bold enough to legally challenge the decision. It could have been a lot worse of most of the franchises due for retendering had commenced before the flaw in the process was exposed.

 

[northwichcat]

This is what is meant by not enough seats. The models should be showing the (average, standard deviation) numbers expected on every train. It's no good having 200 spare seats at Blackpool if you are 200 short at Euston.

But DfT's computer might tell them that there are enough seats for the reason I've given.

DfT actually define not enough seats where:
1. People have to stand in the off-peak period.
2. People standing in the peak period have to stand for more than 20 minutes e.g. some peak time travellers standing between Lancaster and Preston does not get classed as overcrowding.
3. The number of standees exceeding 35% of the seating capacity.*

* Although this is not practical on some high density seating layouts, most notably the Merseytravel 142s, so on a train that isn't overcrowded rail staff can refuse entry on the basis of their being no room. :roll:

 

[HH]

How many more franchises are there in operation now have also been evaluated wrongly I wonder leaving the taxpayer to pick up the mounting bill. West Coast obviously was and I suspect now the two failed East coast franchises were as well and I also have my suspicions about current Great Western franchise.No wonder there is a growing list of "cap and collar" franchises now.John Majors fragmented and expensive pseudo privatised railway has made Britain the laughing stock of the railway world and the Government needs to get off its dogmatic railway horse while there is still time before the whole railway system in this country implodes financially.

There's a massive failure of logic here on several fronts:

1. Franchises prior to West Coast had different mechanisms for dealing with over-aggressive bids; therefore you cannot compare one to the other.

2. The failure of DfT's maths cannot be laid at the door of John Major.

3. The failure of the East Coast franchises didn't really cost the government very much; it largely just lost the money it was expecting to make, but was never really there.

Anyone who has been involved in procurement knows that sometimes you get bids that are too good to be true; most find it very hard to turn them down - how do you explain to your boss why you turned down the better numbers?

--- old post above --- --- new post below ---

But DfT's computer might tell them that there are enough seats for the reason I've given.

DfT actually define not enough seats where:
1. People have to stand in the off-peak period.
2. People standing in the peak period have to stand for more than 20 minutes e.g. some peak time travellers standing between Lancaster and Preston does not get classed as overcrowding.
3. The number of standees exceeding 35% of the seating capacity.

I'm aware of DfT's definitions, which can vary from franchise to franchise. But this is not relevant to my point. Trains have a fixed capacity, but the number of users fluctuates considerably. Firstly you have busier times of day - in either direction. Then the trains carry more the closer they are to London- they leave London at their fullest, and arrive at London the same way. These fluctuations can be massive - a train leaving Glasgow with 50 people on board might arrive at Euston with 500.

When you reach 66% AVERAGE occupancy it should be clear that you will have way more people than capacity on the busiest trains as they arrive or depart London.

 

[John55]

How many more franchises are there in operation now have also been evaluated wrongly I wonder leaving the taxpayer to pick up the mounting bill. West Coast obviously was and I suspect now the two failed East coast franchises were as well and I also have my suspicions about current Great Western franchise.No wonder there is a growing list of "cap and collar" franchises now.John Majors fragmented and expensive pseudo privatised railway has made Britain the laughing stock of the railway world and the Government needs to get off its dogmatic railway horse while there is still time before the whole railway system in this country implodes financially.

Given VRG's reaction to this franchise award I would be surprised if anything like this had occurred before. In this kind of process there should be 3 parties who understand what is going on in great detail, the DfT and the 2 bidders.

Clearly in this case VRG have been banging on about problems with the process for some time because they could see the problems with the First bid even if the other 2 parties couldn't. In previous franchise competitions the same would apply so one has to assume the numbers added up correctly or close enough not to matter otherwise the decision would have been challenged like this one.

 

[Eagle]

In this kind of process there should be 3 parties who understand what is going on in great detail, the DfT and the 2 bidders.

You mean four bidders.

 

[HH]

You mean four bidders.

Yes, but none of the bidders were aware of any detail in how DfT were evaluating the risk; they only told bidders in the most generic of terms. It is therefore interesting how First were able to persuade a change in the number (and also how their own calculations magically arrived at similar numbers to DfT).

Possibly there was some failure of the process on this point too; we shall now never know as the DfT have managed to sweep it all under the carpet by scrapping the competition.

DfT are very keen on transparency in their ITTs, but not, it seems, when it gets closer to home.

 

[RPI]

It will be interesting to see how this will be re run now as the bar has been set, what should be done now is the West part of Northern should be incorporated into this franchise and the East into East coast, that way the IC services will subsidise the Regional/suburban services as with FGW and remove another franchise (Northern) that requires a subsidy, lets face it, some of the Northern routes need some imagination as the current franchise was let on a no growth basis by some special person in the DfT (or was it the SRA at the time?)

 

[ainsworth74]

If anyone's interested the TSC meetings from the 10th September (when VT and First gave evidence) is being repeated on BBC Parliament at 2200 this evening.

 

[John55]

You mean four bidders.

Only 2 out of the 4 went forward to the final stage.

 

[Donny Dave]

How many more franchises are there in operation now have also been evaluated wrongly I wonder leaving the taxpayer to pick up the mounting bill. West Coast obviously was and I suspect now the two failed East coast franchises were as well and I also have my suspicions about current Great Western franchise.No wonder there is a growing list of "cap and collar" franchises now.John Majors fragmented and expensive pseudo privatised railway has made Britain the laughing stock of the railway world and the Government needs to get off its dogmatic railway horse while there is still time before the whole railway system in this country implodes financially.

To lay the blame at the door of John Major and the conservatives is a bit harsh. Yes they have cocked up with the WCML franchise, but ....

Labour were in power for 13 years and despite several promises to change the franchise system, ended up doing nothing. So how many franchises have been awarded after some dodgy calculations. Unless the DfT go through everything with a fine tooth comb, we'll never know.

 

[KBD1]

Bob Crow just likes the sound of his own voice (and about the only one who does). His members have done very well out of privatisation, and he must know it.

What is that supposed to mean