East Coast IEPs Ordered - Class 800

[YorkshireBear]

Who would be paying for the depots if the contracts were on a train-only basis though? (genuine question).

It is a good one. I have no idea.

 

[Dave1987]

That wasn't mentioned in the article at all I don't believe. Having read it on my commute this morning. They will go up at RPI +1% for quite a while but no more than that.

He did also say that the phase 2 is significantly cheaper and as it includes no depots etc is actually in line with the Pendilino price. So even he is admitting that IEP when on a level playing field (ie just the train), is no more expensive than a Pendilino. It is just the way the Dft have formulated the contracts.

Yes he does say that the DFT negotiated a better deal for phase two but he say he finds any info coming from the DFT as potentially inaccurate or misleading. He says that neither of the two other options seem to have been compared like for like to the IEP deal. He says that Patrick McLoughlin has decided "Whitehall knows best" rather than letting the next franchisee decide. And he destroys quite a few other arguments that the DFT made.

BUT yes I retract my comment about the cost per seat. I was sure that I had read that but I have re read the column and he does not mention this.

Interesting how the DFT said that Traxx locos were unproven on UK infrastructure yet his sources say that they have done 200,000 miles between failures.

The fact that he puts "You won't believe the lengths DFT will go to defend the IEP deal" kind of says everything really. They even offered to check his sums.

I maintain my opposition to IEP as far far too expensive considering the viable alternatives.

 

[WatcherZero]

That wasn't mentioned in the article at all I don't believe. Having read it on my commute this morning. They will go up at RPI +1% for quite a while but no more than that.

He did also say that the phase 2 is significantly cheaper and as it includes no depots etc is actually in line with the Pendilino price. So even he is admitting that IEP when on a level playing field (ie just the train), is no more expensive than a Pendilino. It is just the way the Dft have formulated the contracts.

Yeah I noticed that as well, there was a series of three articles by him and it read like the one on IEP cost was written after the others despite appearing before them as it didnt match the others tone. The IEP leasing cost minus the depot, development and infrastructure modification costs is around £40k he now admits, comparable to a new Pendolino and £30k less than he was previously claiming. Hes been running a irrational crusade against it never willing to compare them on like for like by considering the maintenence and depot costs of a equivalent Pendolino fleet which has heavily shaped enthusiast perception and it will be interesting to see what happens now he has apparently come to terms with the deal if not the Dft's handling.

 

[hwl]

Who would be paying for the depots if the contracts were on a train-only basis though? (genuine question).

I'd not rely too much on the RPI+1% increases - nothing to stop it being RPI+3%, and a lot of leisure journeys are made on unregulated fares which could go up considerably. Assuming of course that there's any basis in the article: even with a higher price per seat, it's possible that the price per seat per journey could be lower owing to faster journeys and higher uptime. If IEP delivers all that is promised...

The numbers will depend significantly on the sophistication of the modelling and assumptions - some of the IEP saving will be difficult to calculated without detailed TOC data.

Another example: IEP will have electronic ticket reservation which will cost less to run than the existing paper based system at each turnaround (2 people less and may be 20 minute turnaround instead of 40 minutes? and also less rubbish to clear)

 

[D365]

Comparing apples with oranges?
East Coast will have more capacity (mostly seats /train) post IEP introduction so they can sell more tickets on the busy services which will be good for profit.
Also as the time penalty for stops will decrease (especially for HST replacement) so there may be more stops with some intermediate stations getting more frequent services (which has traditionally increased usage).
Reduced cost of thunderbirds for breakdowns / diversions and less bustitution should also help. (Also less delay repay etc. as time lost should decrease).

Exactly that - Quoted For Truth

What depots will the 225 replacement be using then, if new ones aren't being paid for? Same as the Phase 1 HST replacements (Doncaster etc.) or Bounds Green, maybe?

 

[YorkshireBear]

Exactly that - Quoted For Truth

What depots will the 225 replacement be using then, if new ones aren't being paid for? Same as the Phase 1 HST replacements (Doncaster etc.) or Bounds Green, maybe?

A combination of both I believe (plus other EC depots).

 

[Dave1987]

Quoted from article "the arrival of IEP will effectively wipe out the current profit".

IEP according to Roger Ford is £181m more expensive per year.
--- old post above --- --- new post below ---
Don't get me wrong if they were not as expensive as they are I would support the deal. But at this cost they are far far too expensive considering the viable alternatives of trains that still have plenty of life left in them.

And before I get accused of being an "enthusiast", I'm not. There is a viable cheaper alternative.

 

[hwl]

Quoted from article "the arrival of IEP will effectively wipe out the current profit".

IEP according to Roger Ford is £181m more expensive per year.

...but has he looked at all the cost reductions and addition revenue possibilities IEP brings in his calculations? (I doubt it but I'm sure DfT will have).
It may well create more future profit.

edit to add:
IEP phase 2 ( 225 --> IEP) will also allow more paths / hour on the ECML (which you would probably not get with Traxx upgrade) how does Roger allocated that cost or is it conveniently forgotten?
(i.e. cheaper to replace trains than do certain infrastructure upgrades to get extra paths).

I'm a fairly regular ECML user and like the MK4 in their current state but can see the logic in their replacement and cascade.

 

[WatcherZero]

If they will increase capacity by 28%, £1.2bn x 28% = £336m extra value, £336-181 extra cost = 155 net benefit
Meaning if you take the £181m extra costs, the extra capacity is still £155m cheaper than to provide the extra seats with the existing stock.

This comes back to the apples and pears argument, higher capacity trains are cheaper than an equivalent quantity of smaller trains.

 

[D365]

And that doesn't even take into account the faster acceleration, reducing journey time (if the 225s were left on ECML they would likely get in the way) and thus may attract more customers - though the savings won't be that great!

 

[Dave1987]

If they will increase capacity by 28%, £1.2bn x 28% = £336m extra value, £336-181 extra cost = 155 net benefit
Meaning if you take the £181m extra costs, the extra capacity is still £155m cheaper than to provide the extra seats with the existing stock.

This comes back to the apples and pears argument, higher capacity trains are cheaper than an equivalent quantity of smaller trains.

28%???? Where did you get that figure from?

531 seats per IC225
627 seats per class 800

531 is roughly 85% of 627 so they have 15% more seating.

 

[D365]

531 seats per IC225
627 seats per 9-car IEP

531 is roughly 85% of 627 so they have 15% more seating.

[EDITED] No, that's not how the percentage increase is calculated. 531 is 100% of 531 (obviously) so 627 is about 118% of 531, therefore +18% capacity increase - per train.

 

[hwl]

No, that's not how the percentage increase is calculated. 531 is 100% of 531 (obviously) so 627 is 128% of 531, therefore a +28% capacity increase.

but 627/531 = 1.18 i.e. 118%

The extra 10% is presumably the additional in service units overall (phase 1 adds extra trains)?

 

[tbtc]

According to Roger Ford IEP on East Coast is a net increase of £181m per year over the cost of the current trains. He says this will effectively wipe out the profit the East Coast is currently making. He also says the deal will make the east coast franchise a very hard sell. The cost per seat of the new trains will go up and he says that the DFT were very very cagey when this was pointed out to them. It does seem that ticket prices are likely to go up.

I'm not surprised that an order of new trains that have more seats than the old ones they replace (plus the cost of some extra five coach trains for capacity enhancements and the depot costs etc) is greater than the cost of the HSTs (built late 1970s) and 91s (built late 1980s).

Presumably there'll be some savings from being able to run Aberdeen/Inverness/ Harrogate/ Hull/ Lincoln (etc) services electrically under the wires, some savings from having basically only fleet type etc?

If Al Murray were on the forum, this would be #notnews , sorry

 

[WatcherZero]

but 627/531 = 1.18 i.e. 118%

The extra 10% is presumably the additional in service units overall (phase 1 adds extra trains)?

No your calculating a decrease of 18% from 627 to 531, the reverse is an increase from 531 to 627 of 28%.


Percentage maths is a little funky like that

 

[NotATrainspott]

Is it likely at some point that they'll order a tenth carriage for the 9-car sets?

 

[Dave1987]

No your calculating a decrease of 18% from 627 to 531, the reverse is an increase from 531 to 627 of 28%.


Percentage maths is a little funky like that

I've just gone on an online percentage calculator and 627 is 118% of 531. Again where is 28% coming from?

 

[hwl]

No your calculating a decrease of 18% from 627 to 531, the reverse is an increase from 531 to 627 of 28%.


Percentage maths is a little funky like that

I know - If I had calculated it as a decrease (i.e. 1-531/627) it would be 15.3% (as one of the other posters got).

Calculating it as an increase i.e. 627/531 = 1.1807... i.e. 18%

So where has your 28% come from?
--- old post above --- --- new post below ---

Is it likely at some point that they'll order a tenth carriage for the 9-car sets?

Quite probably - that option isn't there for the Mk4s though unless you order some new trains and then rejig the rakes. IEP with 10 cars should still perform as well as 9 car where as adding an extra carriage to a mk4 rake would decrease performance (acceleration etc).

 

[The Ham]

If they will increase capacity by 28%, £1.2bn x 28% = £336m extra value, £336-181 extra cost = 155 net benefit
Meaning if you take the £181m extra costs, the extra capacity is still £155m cheaper than to provide the extra seats with the existing stock.

This comes back to the apples and pears argument, higher capacity trains are cheaper than an equivalent quantity of smaller trains.

Even at 18% it works out at £216m extra value which is £35m net benefit.

 

[D365]

I know - If I had calculated it as a decrease (i.e. 1-531/627) it would be 15.3% (as Dave1987 got).

Calculating it as an increase i.e. 627/531 = 1.1807... i.e. 18%

So where has your 28% come from?

Mistake. But even 18% provides a £35m net benefit as The Bacon Ham calculated.

Quite probably - that option isn't there for the Mk4s though unless you order some new trains and then rejig the rakes. IEP with 10 cars should still perform as well as 9 car where as adding an extra carriage to a mk4 rake would decrease performance (acceleration etc).

GNER did have a plan to disband 3 of the 225 rakes and use the carriages to lengthen 27 by a carriage each, whilst adapting Mk3 LHCS for use on the stranded 91s/DVTs. The different profile of the Mk3s wouldn't ben any more of a problem then when the 91s originally hauled 1+8 HSTs, or likewise the 455/7s, of course!

Not sure whether all the platforms were long enough at the time, but the powerful 91s were designed to haul up to 11 carriages plus the DVT.

If the platforms are all long enough for doubled-up 5-car IEPs, fixed 10-car units won't be a problem.

 

[Dave1987]

Can't believe people are dismissing a renowned industry experts view, like Roger Ford. My close family relative that has worked in the railways for over 30 years in train planning has said he would reserve judgment on IEP until he read what Roger Ford had to say.

The analysis he has done is so detailed how can people refute it?

 

[WatcherZero]

Sorry I made a typo copying the press release, was 18 not 28, I assumed the numbers were right as it was from the press release and didnt notice my initial mistake. Though the argument still stands that with the capacity increase the value is greater than with existing stock even when subtracting the additional costs.

 

[Dave1987]

Sorry I made a typo copying the press release, was 18 not 28, I assumed the numbers were right as it was from the press release and didnt notice my initial mistake. Though the argument still stands that with the capacity increase the value is greater than with existing stock even when subtracting the additional costs.

Sorry but I servely doubt that is correct. This is £181m a year we are talking about. Considering the price per year is £85m for the current stock, that is over double the cost of the current rolling stock. These are not value for money. The 18% increase in seats will not equate to a double in the fare income unless prices go up. These are very expensive trains and there is a cheaper, viable alternative. Roger Ford also says in his article many potential franchise bidders may reconsider bidding if they are forced to use IEP.

 

[hwl]

Sorry I made a typo copying the press release, was 18 not 28, I assumed the numbers were right as it was from the press release and didnt notice my initial mistake. Though the argument still stands that with the capacity increase the value is greater than with existing stock even when subtracting the additional costs.

Agree value is greater.
The change to IEP is very complex to model and would require lots of very granular internal data from both TOCs (not just eastcoast) and NR so I doubt anyone outside DfT would have access to all the data that DfT used to arrive at their conclusion.
--- old post above --- --- new post below ---

Sorry but I servely doubt that is correct. This is £181m a year we are talking about. Considering the price per year is £85m for the current stock, that is over double the cost of the current rolling stock. These are not value for money. The 18% increase in seats will not equate to a double in the fare income unless prices go up. These are very expensive trains and there is a cheaper, viable alternative. Roger Ford also says in his article many potential franchise bidders may reconsider bidding if they are forced to use IEP.

I haven't read Roger's article but I suspect both he and ourselves aren't fully aware of all the categories that DfT has made the costings and analysis and hence decision on.

DfT's analysis will have been on total system cost not just a partial TOC view.
The train leasing cost is not the be all and end all.
For example planned engineering work; if the cost of diverting EC trains off the wires on Sunday for planned engineering work is now lower with IEP this would mean NR (and indirectly the government to an extent due to overall NR (rail) subsidy) has to reimburse Eastcoast less due to lower cost of diversion in the future. There could easily be 100 similar items where IEP reduces non-train leasing costs both for either the TOC and NR.

We have no idea how much DFT values the creation of extra ECML paths for example.

 

[tbtc]

Sorry but I servely doubt that is correct. This is £181m a year we are talking about. Considering the price per year is £85m for the current stock, that is over double the cost of the current rolling stock. These are not value for money. The 18% increase in seats will not equate to a double in the fare income unless prices go up. These are very expensive trains and there is a cheaper, viable alternative. Roger Ford also says in his article many potential franchise bidders may reconsider bidding if they are forced to use IEP.

Doubling the leasing costs will not mean a doubling of fares:

• Staffing costs will pesumably be the same
• Don't know about track access charges (HST/225 vs 800/801)?
• Maintenance will essentially be "free"
• Fuel costs will be lower (running Aberdeen - London trains off the wires for four hundred miles rather than diesel)
• Engineering should be cheaper (only really one type of train)
• A lot more seats to sell (longer trains, plus more trains ordered)

 

[AndyLandy]

The other thing to remember about IEP is that one of the prime political motivations for it is to help Britain get out of recession. This isn't just a "procure some trains" exercise, it's an attempt to seriously invest in British industry. We're funding the construction of new train building facilities in this country, designed to create jobs for British people.

Yes, it's inevitable that this will be more expensive than simply getting one of the established train manufacturers to spin us off something based on an existing design, but that isn't the only point. Like HS2, IEP is meant as an investment programme. Once the trains are built, we'll have some perfectly good, and very modern train manufacturing facilities where we can build and sell trains to the rest of Europe.

 

[Dave1987]

Doubling the leasing costs will not mean a doubling of fares:

• Staffing costs will pesumably be the same
• Don't know about track access charges (HST/225 vs 800/801)?
• Maintenance will essentially be "free"
• Fuel costs will be lower (running Aberdeen - London trains off the wires for four hundred miles rather than diesel)
• Engineering should be cheaper (only really one type of train)
• A lot more seats to sell (longer trains, plus more trains ordered)

It's a rise of £181m so actually the cost of the rolling stock is tripiling not doubling. I severely doubt anyone can show figures that would make a tripling in the cost of rolling stock a good deal. How can anyone say that an 18% rise in the amount of seats, the maintenance and the other small benefits regarding engineering work and acceleration possibly say that a tripiling in the cost of leasing cost is worth that. Because it just isn't.

 

[WatcherZero]

Read
http://www.rail-reg.gov.uk/upload/pdf/toc-benchmarking-report-2012.pdf

Rolling stock costs (including maintenence, train staff and other associated costs of purchasing, operating and maintaining trains) make up just 20% of TOC costs and just 13% of the costs of the Industry as a whole. And if you read through to the analysis it finds that by far the highest cost per operated train hour (£2,320) is in fact East Coast! (incidentally one metric where Northern is one of the best performing with just £449) This due to the number of staff and energy costs of long distance services and the fact they make up vastly more of the cost proportion than per km operated (which reflects length and distance travelled) where East Coast is at £1.96 among the best performing.

 

[HSTEd]

It's a rise of £181m so actually the cost of the rolling stock is tripiling not doubling. I severely doubt anyone can show figures that would make a tripling in the cost of rolling stock a good deal. How can anyone say that an 18% rise in the amount of seats, the maintenance and the other small benefits regarding engineering work and acceleration possibly say that a tripiling in the cost of leasing cost is worth that. Because it just isn't.

A 2+9 HST burns ~5.5L of fuel per km.
400 miles from Edinburgh to London is 640km which is 3520L of diesel saved by IEP per journey.
There are a total of three round trips between Aberdeen and London and that represents an expenditure of 21120L of diesel every day.
That is about £15000/day of red diesel, and running 350 days a year that is £5.25m/yr in fuel on just those three round trips per day.

This is only a fraction fo the amount of below the wires running of diesels that EC does right now.

(And I speak for someone who doesn't like the IEP programme because its an awful deal even by PFI standards and prefer that the money had been spent on a proper procurement and on simply bringing in foreign electrification teams to wire up everything required far more rapidly than could be achieved under the current regime).

 

[Pure BR]

I rather suspect that Hitachi were always going to get the deal on East Coast. The Department for Idiots would of given them the nod ages ago so that Hitachi could justify and would 'invest' (very loose term) in the flat-packed making factory at Newton wherever it is.