How can the industry lower its costs?

[blacknight]

So rail franchises are a busted flush as they cannot genorate enough revenue to pay both DfT & shareholder. As for penalties when Network Rail are fined who foots the bill the tax payer likewise when TOC's receive subsidy who is really paying the penalties other than tax payer
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It's just that the £s they'd promised to pay were too high for them to keep paying - far higher than EC are currently paying.[/B]To sum up, your comment is wrong on several fronts.

What happens when you over bid for something & dont pay on E-Bay? No one forced Nat Ex to dream up a bid policy, is it good for the tax payer that private companies take the cream in early pat of franchise & then allowed to walk away from franchise with a minimal penalty charge/bond when things go sour

Sounds just like what as been avoided on West Coast making promises that they are unable to keep, where it is cheaper to walk away than stay & pay what sort of system is that?

 

[Dave1987]

As has been pointed out before the railways need govt subsidy otherwise the services that run at a huge loss I.e services that are virtually empty, would have to stop. The walk up nature of the railways would stop and you would have to book your ticket in advance like you have to with the airlines. You cannot just walk up to the EasyJet desk and ask say you want to fly to Spain! Nationalisation would have its perks but I don't think the media or Bob Crow are willing to point out what would get worse. I think the pro's and cons of both need laying out properly before anyone starts shouting for nationalisation again.

 

[HH]

So rail franchises are a busted flush as they cannot genorate enough revenue to pay both DfT & shareholder.

Any business is bust if it cannot pay its debts. Nothing to do with shareholders. And as I have pointed out previously, several franchises are currently running at a loss.

You're trying to prove a point that is just not true; that's what I'd call a busted flush.

 

[blacknight]

Any business is bust if it cannot pay its debts. Nothing to do with shareholders. And as I have pointed out previously, several franchises are currently running at a loss.

You're trying to prove a point that is just not true; that's what I'd call a busted flush.

Not true in franchise system as parent company National Express are still in business whilst letting NXEC go to the wall by withdrawing company support from parent company.
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It's a short-sighted approach. Firstly you lose revenue, and part of that revenue stays lost, particularly on InterCity services. Secondly you have to pre-qualify for the franchise next time round. Have crap performance and you don't even get to re-bid.

But even without these solid financial reasons (which the good accountants are fully aware of), TOC people take pride in their work and they don't want badly performing services. I've seen it from the inside in several TOCs and they've all done their absolute best to improve performance, within the constraints they have to work under. They genuinely want to improve performance.

I've not always been convinced that NR have had the same objective - they want to reduce the minutes attributed to them (I think the bonuses depended on it), which is a little different.

Wonder why connection are not held like they were pre privitisation? As no one wants to take delay minutes & risk fines & the like. Can you see NR taking delay minutes for a late starting local service held for late running mainline service that as been delayed by points or signal failure else where in network ?

 

[Dave1987]

Not true in franchise system as parent company National Express are still in business whilst letting NXEC go to the wall by withdrawing company support from parent company.
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Wonder why connection are not held like they were pre privitisation? As no one wants to take delay minutes & risk fines & the like. Can you see NR taking delay minutes for a late starting local service held for late running mainline service that as been delayed by points or signal failure else where in network ?

I think the point about holding connections is a pretty mute one. What the point in holding the local service for 10-20 mins as it will then be delayed for its return working and probably delayed for its next connection! Usually they are allowed to hold the connection for 5 mins but no more.

 

[Tomnick]

Although a lot of the time it's not practical to hold connections, for the reasons that Dave1987 suggests, sometimes there'd be no harm in a branch train waiting for two or three minutes (where there's plenty of time before the return working, nothing else on the branch that will be delayed, and often the chance for the connection to still arrive at the destination right time anyway), but this usually has to be agreed with the 'main line' TOC first to allow them to take the delay minutes for the 'branch' train leaving late!

 

[blacknight]

I think the point about holding connections is a pretty mute one.

Not with passengers who see doors closing on local as mainliner runs in.

 

[Dave1987]

Not with passengers who see doors closing on local as mainliner runs in.

Usually there is a specific amount of time they are allowed to old the connection for and even if the mainline service is just rolling in then they cannot hold it. There are many reasons for this which passengers don't take into consideration. I appreciate it can be extremely annoying if you are just rolling in and see your connection just leaving. Usually the turnaround times on local services are extremely tight so if the service is delayed at any point it is delayed for the rest of the day. The Romford - Upminster branch is a prime example.

 

[tbtc]

Wonder why connection are not held like they were pre privitisation? As no one wants to take delay minutes & risk fines & the like. Can you see NR taking delay minutes for a late starting local service held for late running mainline service that as been delayed by points or signal failure else where in network ?

This is an impossible argument.

Some connections are held nowadays, some aren't held. Some connections were held in BR times, some weren't held. Since we have no facts to back this up, any argument is going to be a misty eyed one about how much better things used to be back in the Good Old Days.

 

[455driver]

We are not allowed to wait at all (right time railway etc) but its surprising how often there is a minor door fault or a wheel chair passenger or I need to check something on the train etc when the connection* is just rolling in, no point "bothering" control as it would just delay the train even more, luckily I can normally sort it just as the last passenger makes it to the train!

* we dont do "connections" in the true sense of the word hence there is nothing to hold!:roll:

 

[Dave1987]

We are not allowed to wait at all (right time railway etc) but its surprising how often there is a minor door fault or a wheel chair passenger or I need to check something on the train etc when the connection* is just rolling in, no point "bothering" control as it would just delay the train even more, luckily I can normally sort it just as the last passenger makes it to the train!

* we dont do "connections" in the true sense of the word hence there is nothing to hold!:roll:

I have noticed how a lot of people make up connections though even though they are not official. I mean like they are on one train that has a booked arrival at 12 minutes past, another train they want to catch is booked to leave at 13 minutes past. The train they are on is delayed by 2 minutes (hardly the worst delay ever), there is nothing in the timetable that says that it is a booked connection yet they complain that the other train wasn't held. I agree with tbtc that there is no point saying it isn't like the good old days. I dont think in the days of BR you would have got compensation if your service was severely delayed.

 

[HH]

Not true in franchise system as parent company National Express are still in business whilst letting NXEC go to the wall by withdrawing company support from parent company.

This happens in business; it's the whole point of a limited company; if it were not then the world would be a very different place. And in the case of franchises, that's what the bond is for.

 

[455driver]

I have noticed how a lot of people make up connections though even though they are not official. I mean like they are on one train that has a booked arrival at 12 minutes past, another train they want to catch is booked to leave at 13 minutes past. The train they are on is delayed by 2 minutes (hardly the worst delay ever), there is nothing in the timetable that says that it is a booked connection yet they complain that the other train wasn't held.

I used to regularly make a -1 minute connection at Twickenham!

But I never complained if I missed it.

Maybe the industry could look at "connections" onto branch line services where it is deliberately timed to miss, that really gets my goat!

 

[Dave1987]

I used to regularly make a -1 minute connection at Twickenham!

But I never complained if I missed it.

Maybe the industry could look at "connections" onto branch line services where it is deliberately timed to miss, that really gets my goat!

Yes indeed I do think TOC's should do more for passengers with regards to connections. Maybe increase the amount of time allowed for a connection to allow for delays in connecting train. I think 15 mins would be sensible. The connecting branch line train doesn't necessarily need to be waiting in the platform. That would take into account minor delays on the mainline.

 

[blacknight]

And in the case of franchises, that's what the bond is for.

Would that be the same bond in case of recent West Coast franchise where business sense would be to walk away from franchise in later years, as cost of paying bond would be less than annual payment?
Can company be legally be barred from bidding for other franchises after defaulting on another as that could be viewed as restriction on trade

 

[HSTEd]

This happens in business; it's the whole point of a limited company; if it were not then the world would be a very different place. And in the case of franchises, that's what the bond is for.

The bond is almost nothing.

The yields they make on the actual money invested (as opposed to turnover, which is entirely different) are so enormous they can afford to let the bond go and still have made enormous profits over the franchise, even if it goes into its death throws almost immediately upon the takeover.

 

[blacknight]

Yes indeed I do think TOC's should do more for passengers with regards to connections. Maybe increase the amount of time allowed for a connection to allow for delays in connecting train. I think 15 mins would be sensible.

In todays right time departure railway 15 minutes would be akin to a minor miricle, 2 minutes is usually best that can be hoped for which then brings its own risks, such as requesting passengers hurry to train standing at platform should passenger have a fall whos liable?

 

[HH]

The bond is almost nothing.

The yields they make on the actual money invested (as opposed to turnover, which is entirely different) are so enormous they can afford to let the bond go and still have made enormous profits over the franchise, even if it goes into its death throws almost immediately upon the takeover.

It is true that yields are high on capital invested, but that isn't necessarily true if the bonds are taken into consideration, and certainly wouldn't be on early default (which they'd have to be making a loss to trigger anyway!). The Bond is only almost nothing if you are making good profits. I'd like to remind you that the total profit from TOCs last year was £91m, which is only a fraction of the total value of the bonds, and certainly not enormous when compared to any metric.

The profits are partly in return for the risk taken (profits are not guaranteed as can easily be demonstrated at the moment), and partly down to other investments; for instance it takes on average 4-5 bids to win a franchise, so bidders could easily have sunk £50m or more - which cannot be capitalised in the franchise - by the time they win something.

Despite the cock-up on ICWC the letting of franchises is one of the most rigorous procurements around. Franchises are let by competitive tender, and up to now that's been almost totally on price. There's no cosy club - several of the companies involved actively dislike one another - so the government gets the best possible price. That some franchises fail indicates that sometimes they get more than the best possible price. Many more are loss making, so although some TOCs, e.g. Virgin, have made very good profits, the overall level of profit is very low.

If profit levels were too high that would trigger more competition which in turn would drive them down. This is basic economics.

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In todays right time departure railway 15 minutes would be akin to a minor miricle, 2 minutes is usually best that can be hoped for which then brings its own risks, such as requesting passengers hurry to train standing at platform should passenger have a fall whos liable?

He's clearly referring to timetables. The problem is that it trains will generally have lots of connections, not just one, and it's impossible to time them all, especially as you share track not just with other TOCs, but freight as well. If there is a particular problem at a particular station I would try making the TOC(s) concerned aware of it, in case something had been missed, but the chances are the timings are there for a reason - the rolling stock is generally very heavily utilised these days.

 

[blacknight]

It is true that yields are high on capital invested, but that isn't necessarily true if the bonds are taken into consideration, and certainly wouldn't be on early default (which they'd have to be making a loss to trigger anyway!). The Bond is only almost nothing if you are making good profits. I'd like to remind you that the total profit from TOCs last year was £91m, which is only a fraction of the total value of the bonds, and certainly not enormous when compared to any metric.

The profits are partly in return for the risk taken (profits are not guaranteed as can easily be demonstrated at the moment), and partly down to other investments; for instance it takes on average 4-5 bids to win a franchise, so bidders could easily have sunk £50m or more - which cannot be capitalised in the franchise - by the time they win something.

Despite the cock-up on ICWC the letting of franchises is one of the most rigorous procurements around. Franchises are let by competitive tender, and up to now that's been almost totally on price. There's no cosy club - several of the companies involved actively dislike one another - so the government gets the best possible price. That some franchises fail indicates that sometimes they get more than the best possible price. Many more are loss making, so although some TOCs, e.g. Virgin, have made very good profits, the overall level of profit is very low.

If profit levels were too high that would trigger more competition which in turn would drive them down. This is basic economics.

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He's clearly referring to timetables. The problem is that it trains will generally have lots of connections, not just one, and it's impossible to time them all, especially as you share track not just with other TOCs, but freight as well. If there is a particular problem at a particular station I would try making the TOC(s) concerned aware of it, in case something had been missed, but the chances are the timings are there for a reason - the rolling stock is generally very heavily utilised these days.

Should that read highest possible price given the amount First outbid Virgin for failed West Coast franchise. Then ministers in Dft said it was a good deal how wrong they were good job Virgin launched at legal challenge

 

[HH]

Should that read highest possible price given the amount First outbid Virgin for failed West Coast franchise. Then ministers in Dft said it was a good deal how wrong they were good job Virgin launched at legal challenge

From the government view highest = best. At least that's how it has been.

 

[soil]

I don't think railways are attractive for many journeys.

Price really is not the issue.

If you are commuting - fine, you will consider trains to avoid traffic, and because it's predictable - you know what time you need to be at work and what time to come home.

But for general usage, there's no way that the railways can take you to Tesco, or Thorpe Park, or whatever it is, at least not unless you are prepared to suffer significant inconvenience in terms of getting from home to station and from station to destination.

I think it's naive to imagine that there are millions of people out there just aching to get on the railways if the price were to drop.

First step is to look at motor car usage, particularly for short journeys, and encourage alternatives, i.e. cycling and walking.

 

[Dave1987]

I don't think railways are attractive for many journeys.

Price really is not the issue.

If you are commuting - fine, you will consider trains to avoid traffic, and because it's predictable - you know what time you need to be at work and what time to come home.

But for general usage, there's no way that the railways can take you to Tesco, or Thorpe Park, or whatever it is, at least not unless you are prepared to suffer significant inconvenience in terms of getting from home to station and from station to destination.

I think it's naive to imagine that there are millions of people out there just aching to get on the railways if the price were to drop.

First step is to look at motor car usage, particularly for short journeys, and encourage alternatives, i.e. cycling and walking.

The railways business model is for long distance passengers, unless you could reinstate all the lines that were ripped up in the 60's then you could never serve everyone. Unfortunately we have built on a lot of lines and others there seems to be unjustifiable opposition to reopening the line. For example the reopening of the line from Stratford-on-Avon to Honeybourne. I wish we were more like Germany in that respect.

 

[Andrewlong]

As i have said before. If you are lucky enough to get a company car like me (which i need for work as an automation engineer,) then the government takes anywhere from £1500 to £14K a year tax off you now regardless of how many miles you do privately, in my case £5k is taken even if i never drive it other than work (I am home based )

If you then get free private fuel (which i don't) you pay another £2-7 K on top of that , again regardless of private use. It is therefore no incentive to use anything other the company car (or van as these are now being taxed) For me it costs me only 13 pence per mile in fuel paid back to the company but i have already paid that money up front to the government so i want to enjoy my nice luxurious and comfortable German car.

Outside of the congested South East which is a different situation, no public transport will ever compete with that. Current turn up return fare to Leicester is £11.50 off peak and £14 return, multiply that by 2 plus a child for a 50 mile return journey by car and no saving the planet in the world argument will work for a trip to the cinema , journey time is also only 10 mins quicker by train as traffic congestion up here is nothing like the South East

The hourly trains however are often full mainly elderly and teenagers without cars

My wife used to go by train to work everyday from Oakham to Leicester but the reliability was so poor for the cost saving on car parking and running costs that she switched back to the car some years ago and wont go back. If you have a board meeting at 9-00 and the train gets cancelled with next one an hour later, it is not going to work and she got fed up paying for a season ticket and then still having to drive in the car to work

If the government want us to switch from cars, then remove the fixed costs and company car taxation and make it variable. If I was only taxed for using my car for private use, i might consider leaving the car and using the train if I was going in to Leicester on my own but then who will then make up the lost taxation revenue so i cant see any government changing that soon.

all thoughts are my own

You don't have to be lucky to have a company car. I had one years ago and the tax was more of a pain than it was worth. Many people (me included) have a car allowance which I use to pay loan on my wife's car. Having an allowance doesn't make me feel I have to use my car.....
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So what pro active measures does your TOC take to inform passengers of the spare capacity at the back of the rain?

On FGW the train announcer tells standing passengers that there are seats in the quiet carriage at the back of the train. There will always be people who don't want to walk further than they need to - its human nature and the TOC can't be held responsible for changing that!
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London-Birmingham competition is entirely incidental.
VT, LM and CT have different franchises and are meant to serve different market sectors (roughly fast/premium, local/Northampton and High Wycombe respectively).
Most fares are interavailable anyway.

Do you want CT to spend its energy competing with VT, or serving Bicester better? The DfT says the latter.
There are three TOCs operating between Liverpool and Manchester (TP, EM, NT) but still no real competition, just a little variety.

There is no competition on Reading to Paddington line and so I have no choice but using FGW. Why can't there be 2 operators for a franchise thereby offering different prices and alternative standards of service/innovation.

Can you imagine the railway model in the real world and every hotel in a town being say a holiday inn?!

 

[Beveridges]

How can the industry lower its costs?

By not spilling millions of litres of diesel every year due to the knackered run down fuelling equipment used at most refuelling depots.

 

[Dave1987]

By not spilling millions of litres of diesel every year due to the knackered run down fuelling equipment used at most refuelling depots.

And not spending billions on pointless and ridiculous projects!

 

[matacaster]

Better standardisation of fleet purchases.

There should be a 'standard' DMU / EMU body design for the whole of the rail network. Manufacturers could compete to produce trainsets based on such standard bodies. It is hopelessly uneconomic to procure as is done now, with trains desigend for one or two routes. Limited efforts have been made before such as AC / DC designs for southern services, but what is needed is standard designs, where bogies are essentially the same, but differing capacities of traction motor can be fitted. All DEMU / EMU's should have through corridors. Yes, it may INCREASE the initial cost a little, but long term it REDUCES the cost - eg TPE 185 units (great units except seats are too hard) often connected into pairs, no corridor connection two guards or revenue loss due to non-fare-paying. Because the control systems differ between classes, they cannot be swapped around to meet changing demand. To cope with increased capacity, extra coaches are often required, but once the production line is finished its hugely expensive to restart - this would be less of a problem if there were standard basic designs. It is not particularly obvious why 8 coach train sets in south which need to be made 12 should be dumped onto the rest of the country and south gets new 12 coach sets - even if the speed needs upping to 110 or 125, it should be possible to simply switch supply equipment and brakes, not need a new class. It should also be made irrelevant whether its a DMU or EMU being ordered - it should be a simple matter to convert from one to the other as circumstances dictate- ie a week or two, at most, not forever.

Yes, the loading gauge may be better in some parts of the country, which might allow greater room onboard with disrete designs, but its simply not worth having lots of separate classes with little in the way of common parts and training requirements. It is the wrong approach. Years ago, it was impractical technically to produce a single emu/dmu design, but I don't think it should be now, it just needs someone to sit down and specify an adaptable body shell framework. Door opening can be altered dependent on use ie heavy commuter or long distance. The interiors would differ of course to provide more luxury for long distance services, but the shell would be the same.

IEP is also a complete waste of money. Refurbish 225's - the biggest customer experience improvement would be to replace those crap rock-hard seats. Introduce 140MPH signalling on ECML, maybe introduce tilt for Scotish services use money saved on IEP to electrify to aberdeen, inverness, hull, harrogate. No need for IEP then.

 

[455driver]

Better standardisation of fleet purchases.

"Standards" that are "standard" for more than 5 minutes would be nice!

It isnt always the railways fault especially with the government insisting on 20 "value for money" study and 5 "requirement" studies before authorising something.

How much money has been wasted on all the "studies" carried out on the Swindon to Kemble re-doubling? Probably enough for the work to have been done and yet all that money has been spent with nothing to show for it.

IEP is another government "vanity" project which is trying to be all things to all men and will end up doing none of them well and those things it can do it will be hugely expensive, not one of the TOCs wants the thing, not that they can say so for fear of upsetting the government and being frozen out of applying for any other TOCs in the future.

IEP is a government idea and is nothing to do with the railways but it is the railways that will end up paying for it, and then we can have another thread about "why are railways so expensive" when the reasons are that the government keep meddling in things they know very little about.

 

[Dave1987]

"Standards" that are "standard" for more than 5 minutes would be nice!

It isnt always the railways fault especially with the government insisting on 20 "value for money" study and 5 "requirement" studies before authorising something.

How much money has been wasted on all the "studies" carried out on the Swindon to Kemble re-doubling? Probably enough for the work to have been done and yet all that money has been spent with nothing to show for it.

IEP is another government "vanity" project which is trying to be all things to all men and will end up doing none of them well and those things it can do it will be hugely expensive, not one of the TOCs wants the thing, not that they can say so for fear of upsetting the government and being frozen out of applying for any other TOCs in the future.

IEP is a government idea and is nothing to do with the railways but it is the railways that will end up paying for it, and then we can have another thread about "why are railways so expensive" when the reasons are that the government keep meddling in things they know very little about.

Yes read recently that the cost of IEP is sky rocketing and is above the £5bn mark currently!

 

[455driver]

Yes read recently that the cost of IEP is sky rocketing and is above the £5bn mark currently!

Plus I bet it comes in much heavier than Hitachi are saying it will as well.

I just cant understand why we have to re-invent the wheel every time there is a requirement for new trains.

 

[tbtc]

Better standardisation of fleet purchases.

There should be a 'standard' DMU / EMU body design for the whole of the rail network. Manufacturers could compete to produce trainsets based on such standard bodies. It is hopelessly uneconomic to procure as is done now, with trains desigend for one or two routes. Limited efforts have been made before such as AC / DC designs for southern services, but what is needed is standard designs, where bogies are essentially the same, but differing capacities of traction motor can be fitted. All DEMU / EMU's should have through corridors. Yes, it may INCREASE the initial cost a little, but long term it REDUCES the cost - eg TPE 185 units (great units except seats are too hard) often connected into pairs, no corridor connection two guards or revenue loss due to non-fare-paying. Because the control systems differ between classes, they cannot be swapped around to meet changing demand. To cope with increased capacity, extra coaches are often required, but once the production line is finished its hugely expensive to restart - this would be less of a problem if there were standard basic designs. It is not particularly obvious why 8 coach train sets in south which need to be made 12 should be dumped onto the rest of the country and south gets new 12 coach sets - even if the speed needs upping to 110 or 125, it should be possible to simply switch supply equipment and brakes, not need a new class. It should also be made irrelevant whether its a DMU or EMU being ordered - it should be a simple matter to convert from one to the other as circumstances dictate- ie a week or two, at most, not forever.

Yes, the loading gauge may be better in some parts of the country, which might allow greater room onboard with disrete designs, but its simply not worth having lots of separate classes with little in the way of common parts and training requirements. It is the wrong approach. Years ago, it was impractical technically to produce a single emu/dmu design, but I don't think it should be now, it just needs someone to sit down and specify an adaptable body shell framework. Door opening can be altered dependent on use ie heavy commuter or long distance. The interiors would differ of course to provide more luxury for long distance services, but the shell would be the same.

IEP is also a complete waste of money. Refurbish 225's - the biggest customer experience improvement would be to replace those crap rock-hard seats. Introduce 140MPH signalling on ECML, maybe introduce tilt for Scotish services use money saved on IEP to electrify to aberdeen, inverness, hull, harrogate. No need for IEP then.

Excellent first post.

I disagree about IEP (you'd need to also electrify to Hereford, Carmarthen, Weston, Cheltenham... and there's no way you can do this before HSTs are needing replacement), but agree with your main point about standards.

If we had common standards on things like bogies, doors, electronics, coupling (and insisted that new stock was compatible with anything else built to this standard) then we'd have a much simpler railway. If only!