We all know how hideously expense IEP is going to be. I was wondering whether ticket prices will have to go up to pay for it. In my opinion it is far far too expensive for what it is considering to cheaper alternatives. Ultimately will the passenger end up paying lots more for it?
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Paying for IEP
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O goody another bash IEP thread!
Most rail fairs are regulated (well atleast most that would be used by people travelling between say Bristol and London) so the only fair increases would be those that are determined by the DfT each year. Given most unregulated fairs are the advance fairs (used by a minority of travelers) there is a limit on by how much they can go up before people stop using them (i.e. you are never going to by an advanced ticket which costs more than the turn up and go ticket).
In fact given the restrictions on many of the advanced tickets it is likely that once the cost difference gets within a nominal amount (and that will depend on the person) that people will just by the more felxible turn up and go tickets anyway.
Therefore IEP will have very little impact on the cost of ticket prices (if any), other than maybe slightly fewer advanced tickets. In realitty the advantages of them having faster joureny times than the HST's which they are replacing would mean that people would be willing to travel from further out from where they are traveling to, which would mean that the TOC's would get more money from their season ticket holders. This would mean that the perceved cost difference of the trains would have little impact on the TOC's bottom line.
Most rail fairs are regulated (well atleast most that would be used by people travelling between say Bristol and London) so the only fair increases would be those that are determined by the DfT each year. Given most unregulated fairs are the advance fairs (used by a minority of travelers) there is a limit on by how much they can go up before people stop using them (i.e. you are never going to by an advanced ticket which costs more than the turn up and go ticket).
In fact given the restrictions on many of the advanced tickets it is likely that once the cost difference gets within a nominal amount (and that will depend on the person) that people will just by the more felxible turn up and go tickets anyway.
Therefore IEP will have very little impact on the cost of ticket prices (if any), other than maybe slightly fewer advanced tickets. In realitty the advantages of them having faster joureny times than the HST's which they are replacing would mean that people would be willing to travel from further out from where they are traveling to, which would mean that the TOC's would get more money from their season ticket holders. This would mean that the perceved cost difference of the trains would have little impact on the TOC's bottom line.
If IEP was only say 50% more expensive than the lease cost on the current stock I would agree with you BUT it's not! It is hugely more expensive than the current stock. For the price I would expect the journey time to be halved and the number of seats doubled. It's just too expensive for the slight gains in journey time and seating capacity. I really don't see how ticket prices won't go up to pay for it as the leasing costs are that high and the next TOC is going to be forced to use them instead of the cheaper alternative. Unless the govt puts up massive subsidies to cover the cost of the lease but with govt trying to put more operating costs on tickets that is very unlikely to happen.
TheKnightWho
Established Member
So... what is the point of this thread? IEP is a done deal - there is nothing that you or anyone else can do about it. What are you hoping to achieve simply going over the same stuff that's been discussed time and time again about the cost?
LNW-GW Joint
Veteran Member
The mechanism DfT uses for regulated fares is RPI+x%, where x can vary.
While x has been mostly 1% recently, the franchise agreement allowed 3% on Southeastern fares for 5 years or so, ostensibly to charge for faster services on HS1.
Even BR had its way of putting up fares on newly modernised lines, which is why fares on WCML/ECML are higher than elsewhere.
I expect DfT will put a similar clawback mechanism in the IEP franchise agreements (and also on all newly electrified lines).
While x has been mostly 1% recently, the franchise agreement allowed 3% on Southeastern fares for 5 years or so, ostensibly to charge for faster services on HS1.
Even BR had its way of putting up fares on newly modernised lines, which is why fares on WCML/ECML are higher than elsewhere.
I expect DfT will put a similar clawback mechanism in the IEP franchise agreements (and also on all newly electrified lines).
In the case of Bristol to London, the Super Off Peak is the regulated fare. I expect that there is a fair amount of business travel in the shoulder peak and peak using unregulated Off Peak and Anytime fares.
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Gareth Marston
Established Member
How you square the circle of lower subsidy, higher payments to Govt, your share and the cost of IEP is probably the biggest headache facing bidders for GWML and ECML plus trying to second guess the opooisition. It may lead to fewer bidders as some decide its not worth it or a repeat of the over optimistic bids that failed. It's a big elephant in the railway room and will shape a lot of the next decade, IEP may be a done deal for some buts its consequences are with us for a long time. Other IC franchises will certainly not want the complexity and costs it brings and it will be a big battleground in years to come as orders dry up for Newtown Aycliffe and people face redundancy.
tbtc
Veteran Member
It gives us the chance to have arguments that were previously flogged to death. Again. A bit like the "Pacers aren't luxurious" threads that seem to be reappearing...
As previously explained, the reason that IEP costs so much is the private financing. The Government(s) like this kind of "push the costs into the long term" approach to financing, since it means less debt in the short term (so the current debt figures don't look so bad). This'd be the same regardless of the type of stock being ordered (so its disingenuous/ pointless to compare the way that current stock is financed).
Masbroughlad
Established Member
I am just pleased we are getting some new trains 
Dave, why have you started this thread, when you already raised the issue of the cost in this thread (post 29, page 2) all of four hours earlier?
http://www.railforums.co.uk/showthread.php?t=92494
Just for the sake of tidiness it would have made a lot more sense to carry on there, never mind that this issue has been done to death here previously and the IEP contract for FGW is a done deal, with the cost of the trains coming down in the EC agreement, even if more than a Pendolino-type arrangement.
http://www.railforums.co.uk/showthread.php?t=92494
Just for the sake of tidiness it would have made a lot more sense to carry on there, never mind that this issue has been done to death here previously and the IEP contract for FGW is a done deal, with the cost of the trains coming down in the EC agreement, even if more than a Pendolino-type arrangement.
YorkshireBear
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Exactly, it is not the train but the way they have been procured. Even Roger Ford tentatively suggested in one of his pieces that IEP may actually be a cheaper train than the Pendilino if it was procured the same way.
I can totally understand peoples concern over the projects ultimate costs for the simple reason that even those with zero railway knowledge watch/listen to the news and realise what an expensive shambles PFI hospitals ,cancelled PFI Tube modernisation ,abandoned government IT schemes, hugely escalating Navy aircraft carrier costs ,rail franchising u turns ,etc have turned out to be
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Which is all the more reason to remove state interference as much as possible......
Yes the joys of PFI. Higher costs for taxpayers yet a nice accounting trick to maker the books look better short term. Hasn't it delayed Thameslink stock by a couple of years? Crossrail stock procurement has abandoned the model as it takes so long (and costs far more long term of course).
The accounting tricks probably wont work long term anyway, as who knows if it will alter in status like Network Rail's debt, which is being moved onto the governments books not separated, due to EU accounting rules.
If the UK used EU statistical rules more widely then our national debt is nearer 100% of GDP not the 80% the UK govt says. You can see why they are tempted to hide borrowing costs, even though it costs a LOT more long term and there is a real risk of decades of higher fares.
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If that borrowing had been done directly by the state through bonds it would have payment rates at half the interest rates than it does by using private companies to borrow, then paying them back with an additional fee as well. On the accounts it's not govt borrowing, but the govt is tied to paying it back over 30 years. Additional costs are in the billions of pounds across govt. The effects on NHS trusts forced into PFIs are that 10% of their budget can go on high interest repayments meaning less spent on health for local people. Alternatively the govt makes up the difference and the wider taxpayers foots the bill. A similar thing could happen to rail franchises. FGW having to pay higher leasing costs so less to spend on local south west services, for example.
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I agree
How much more does an IEP actually cost to lease compared to a 225 or HST, will there be lower running costs? Presumably bidders for EC & FGW will have to price the cost of leasing the new trains into their bids so it's more likely to result in lower premiums or higher subsidies than significant changes in ticket prices.
What you fail to point out is that NHS PFI contracts also include facility management contracts, which are costs that the NHS would have incurred anyway.
I ll refer back to my previous post......" a good reason to remove government interference " ....
tbtc
Veteran Member
Totally agreed.
What's made IEP even more expensive is that the costs include maintenance and full availability (i.e. Agility will get fined if they do not provide sufficient "fit" trains for each day), which makes them even more expensive than the basic ROSCO lease.
This could make the overall cost to a TOC cheaper (compared to keeping the maintenance "in house"), but it makes the headline figure look larger.
NotATrainspott
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When people bash the DfT for organising the IEP scheme rather than letting the individual TOCs manage it, remember what was so good about the trains they're replacing. If we let the ICEC and GW franchises manage the procurement on their replacements for the 125s then it's very likely that each company could end up with a unique fleet of trains. Unique fleets are not at all a good thing unless there is a very good reason (i.e. the Pendolinos) since then you are not able to do send them around the country without expensive depot works and staff training. If there are ever any 125s lying unused by one operator then any of the others can easily pick them up with a minimal amount of effort as they already have everything they need to run them.
If we let the 125s be replaced piecemeal by lots of different designs, this will become much more difficult and for what benefit? Apart from possibly replacing the 225s with more Pendolinos, the orders for the diesel/bi-mode replacements were always going to need to be a new design unlike anything else on the network (which is the reason letting TOCs order more Turbostars or Desiros isn't as bad a thing). The procurement of trains of such national importance is always going to need quite a bit of government oversight and control - despite what Richard Branson says his company were forced to get the trains they did by the Government.
If we let the 125s be replaced piecemeal by lots of different designs, this will become much more difficult and for what benefit? Apart from possibly replacing the 225s with more Pendolinos, the orders for the diesel/bi-mode replacements were always going to need to be a new design unlike anything else on the network (which is the reason letting TOCs order more Turbostars or Desiros isn't as bad a thing). The procurement of trains of such national importance is always going to need quite a bit of government oversight and control - despite what Richard Branson says his company were forced to get the trains they did by the Government.
True, though at a higher cost than it would otherwise cost and with less flexibility.
The MRSA crises in hospitals was worsened by cleaning regimes coming under the PFI owners that the hospital couldn't quickly alter to respond to need.
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I'll bash the DfT all I like. It was their obstinate opposition to an electrification programme that first led to the initial IEP concept, as a diesel-powered HST replacement, when just about any sane and rational organisation would have seen the need to replace a life-expired diesel fleet as the ideal opportunity to electrify.
When that finally changed, the IEP began to evolve, but with yet more false starts, such as trains with one electric and one diesel power car, until we finally got to what will actually be built.
This farce has been going on since 2005. It will have taken 10 years by the time the first prototype turns a wheel and 12 to passenger service. FGW's HSTs are having to undergo yet another life-extension overhaul to keep them going for four more years.
If DfT had embarked on an electrification programme in 2005, which could likely have covered a lot more of the system by now (such as Worcester/Cheltenham/Weston in the GW area and Hull/Middlesbrough on the East Coast) and left it to the TOCs to sort out the trains, we would have been running around in new electric trains some years ago, most likely some sort of Pendolino derivative, whether tilting or not, and bi-modes might never have happened, or been far less numerous.
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No......part of the T&Cs of a PFI contract is that the market must be regularly tested for Facility Management provision. To underline that even further , this time last year I was actually working for one such provider which lost a contract for the BBC....
The big point though regardless of whether you like IEP or not is they are very very expensive trains. The only way they will be paid without ticket price increases is through govt subsides which is the exact opposite of what govt wants. You are also getting rid of trains that are only half way through their working lives which are extremely nice inside.
Captain Chaos
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Or staff cuts? Those DOO cameras on the side cannot be an accidental inclusion...
tbtc
Veteran Member
Ignoring the fact that any HST replacement would be funded like this (and pretty much equally expensive), could you tell us which trains we are getting rid of that are only half way through their working lives?
Nobody is talking about scrapping 225s, if that's what you are on about?
Perhaps but I can't see them ever ditching a second member of staff on long distance services like those IEP will be used on. I could see them having DOO in terms of the driver handling the doors entirely by themselves but just having the driver (and presumably any catering crew) I'm don't think so.
Actually do they even have the cameras on the side? I thought they were (to borrow a phrase from the MoD) being fitted for but not with DOO equipment?
So you are telling me any other replacement would cost as much as this?
I would like to know where they would possibly end up then?
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BananaRepublic
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The configuration with diesel or electric power cars at either end, or a combination of one of each in the case of a Bi-Mode, was not the idea of the DafT or part of the IEP specification.
It was Agility Trains solution to the power requirements for all three versions asked for in the spec.
The losing bidder's proposal came up with a different arrangement.
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Surely this arrangement isn't anything new. Isn't it exactly how a large proportion of the current post -privatisation fleet is leased?
The arrangements with Siemens for the provision of most of the Desiro fleet and with Hitachi for the class 395's are virtually identical to the way that IEP's will be supplied to the TOC's.
In SWT's case, leasing Desiro's worked out far cheaper than leasing ex-BR stock on a regular ROSCO deal.
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andyb2706
Member
Where do you think? My prediction is the same location where the 90's and DVT's ended up after retirement from the West Coast....sorry Great Anglia, you may be getting cast offs again like us Northern passengers have to put up with.....or the Midland Mainline is being electrified and I don't think there has been any news as to what rolling stock is to be used there.
Or a really silly suggestion is to send them to Northern instead of the 319's, much rather ride on the Chat Moss line on a 91....aaah I can but dream
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