Initial Laidlaw Report into ICWC shambles published

[HH]

As ive said elsewhere the Ready Reckoner has now been published (Laidlaw draft report appendix) and it does indeed provide a mathematical formula for bidders to calculate a rough value for the SLF using their margin, non-revenue risks and SLF values for how they order the franchise payments (front loaded, middle loaded, rear loaded, evenly loaded).

Well partly true. But firstly let's be clear that you said it was a model, and it's not a model. It is a basis for a calculation; and a partial one at that. Not the same thing at all.

What bidders know - the reduction they can make based on a 5% margin; and a formula for calculating the effect of a different margin level. They can make a call on whether their bid is back-end loaded, etc., but no guidance is given on this.

What bidders do not know - Non-revenue risks: DfT would calculate these. Bidders could only guess what DfT's number would be. Revenue Risk (the biggest number and one which you ignore): this would have a number of elements based around the DfT's view on a whole slew of initiatives, and there is absolutely no chance that bidders could duplicate the DfT number. In particular bidders are likely to view their plans as less risky than DfT and therefore come up with a lower number.

So as I've said all along, the ready reckoner was of little use in determining the likely size of the SLF and the draft Laidlaw report confirms this.

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From Railway Eye

Announcing the session Tranport Committee Chair Louise Ellman MP said:

“It is astonishing that the Government has had to cancel the West Coast Main Line franchise competition and delay other competitions. Just last month the Secretary of State told us that he was content with how the Department for Transport had handled the West Coast Main Line competition and that Virgin’s challenge to the outcome would be defended robustly.

“I expect the Department’s review of what went wrong to be available by the end of this month and we will want to examine that very carefully. We will also want to know how much this episode has cost the taxpayer, what lessons will be learnt, and what will be the wider implications for franchising. In addition, I expect the Committee to look closely at the Government’s review of franchising when it is published at the end of this year."

The session can be viewed at http://www.parliamentlive.tv/Main/Player.aspx?meetingId=11679

 

[greg tingey]

& will Phi;ip Rutnam be sacked?

Don't be silly.

They will pay off a convenoent scapegoat.

 

[snail]

McLoughlin consulted Brussels before talking to Virgin

Why is that bad? EU competition law is quite strict, would you rather he made an agreement with Virgin that was later kicked out because it breached the 15-year maximum franchise term?

 

[LNW-GW Joint]

Why is that bad? EU competition law is quite strict, would you rather he made an agreement with Virgin that was later kicked out because it breached the 15-year maximum franchise term?

Not at all.
I was just pointing out that the SoS can't just do what he likes.
It's the single market working.
The statement was one of the few morsels of new information in the session.

 

[snail]

That's true. I saw some of it live, these committees do turn into talking shops for the MPs who endlessly repeat the same questions and get the same response every time from Sir Humphrey - sorry, Philip Rutnam. He was pretty non-committal but miles better than the BBC DG last week. (Must find something better to do with my time than post on internet forums while watching Parliamentary Committees :roll

The DfT enquiries do seem to be taking a long time to report back but if they had just named names as requested other MPs would be up in arms calling for "a full enquiry"!