Welsh Government criticises ATW profits

[Gareth Marston]

From http://www.walesonline.co.uk/news/politics/arriva-trains-wales-made-record-13023173

A spokesman for Economy Minister Ken Skates, whose portfolio includes transport, said: “The Welsh Labour Government has been very clear that in planning for the next Wales and Borders franchise due to begin in 2018 we will not be allowing the kind of excessive profits we have seen in the current franchise which was let by the UK Government.

“The next franchise is one that we are developing here in Wales and we have made clear to all the bidders that excess profit will be reinvested back into the transport system here in Wales, incentivising choice and driving down costs for the passenger.”

The usual cr@p from Welsh Labour pretending its nothing to do with them however yet again we see claims of excessive profits meaning some folk may see a free ride as justifiable.

Not helping of course was the fact that the pre tax profits were close on 10% of turnover! Red faces down at the RDG!

 

[Bletchleyite]

Sorry, ATW are running at a 10% profit margin? That is very high for a TOC, particularly a regional one, and certainly should raise questions.

Isn't about half that more typical? (Though 10-15% is not uncommon for buses I believe)

 

[Clip]

10% is massive but then I see that its pre tax profits but nothing in the story for after tax profits.

One sided much?

 

[PeterC]

The usual cr@p from Welsh Labour

You are in favour of not paying your fare then? (see thread title)

 

[Doctor Fegg]

Sorry, ATW are running at a 10% profit margin? That is very high for a TOC, particularly a regional one, and certainly should raise questions.

Isn't about half that more typical?

Yes, if that.

https://fullfact.org/news/do-train-operating-companies-earn-massive-profits/

Taking these subsidies into account, last year train operating companies enjoyed, between them, a margin of £305 million (3.4%). Analysis from KPMG shows margins similar to this going right back to 1997.

 

[Llanigraham]

You are in favour of not paying your fare then? (see thread title)

Unfortunately Gareth appears to let his (locally known) political agenda affect his postings on this Forum.
I see absolutely nothing in the linked article that encourages fare dodging.

 

[WatcherZero]

Its actually around 6.9% after tax last year which is still high but its at the very end of the franchise.

Over the last 12 years ATW has raised passenger revenue from £60m to £133m per year (130%) while subsidy has fallen from £133m per year to £110m per year with a few spikes when it was tasked with adding extra services. Profit has risen from £6m per year to £18m.

 

[philthetube]

So a franchise with no incentive to increase profits then???????????????

Good thinking.

 

[Gareth Marston]

You are in favour of not paying your fare then? (see thread title)

The UK Government they moan about was of course a Labour one with a Pontypridd MP who signed off the franchise agreement as Secretary of State.....the "nothing to do with us" line is political responsibility dodging which we've come to expect from Welsh Labour /WG.

What I'm saying is by yet again having a whinge about ATW making excessive profits in public they are encouraging the public to see them as rip off merchants which may lead some to think that fare dodging is morally justifiable.

 

[Gareth Marston]

Unfortunately Gareth appears to let his (locally known) political agenda affect his postings on this Forum.
I see absolutely nothing in the linked article that encourages fare dodging.

Just so forum members are absolutely clear I do not belong nor ever have to any political party.

 

[LNW-GW Joint]

So a franchise with no incentive to increase profits then???????????????
Good thinking.

Arriva has over the years used profits from ATW to prop up XC and Chiltern when they were in a slump.
They also coughed up the 2nd ATW Mk3 set at their expense (for taking over Chiltern/LO).
The WG has no handle on the costs of the next franchise, and their threats are empty really.
The winner will have plenty of opportunity to milk profits out of WG, on consultancy if not operations.

 

[Gareth Marston]

Arriva has over the years used profits from ATW to prop up XC and Chiltern when they were in a slump.
They also coughed up the 2nd ATW Mk3 set at their expense (for taking over Chiltern/LO).
The WG has no handle on the costs of the next franchise, and their threats are empty really.
The winner will have plenty of opportunity to milk profits out of WG, on consultancy if not operations.

Yes - the real picture is much more grey than the tub thumping from the Bay would have us believe.

Arriva got growth that continued more or less at the same rate as in the ten years or so up the franchise being let with no commitment to accommodate it. WG has stumped up on several occasions for extra rolling stock/services. It eventually worked out quite well for them - apart from the reputational battering they take.

 

[Bletchleyite]

Over the last 12 years ATW has raised passenger revenue from £60m to £133m per year (130%) while subsidy has fallen from £133m per year to £110m per year with a few spikes when it was tasked with adding extra services. Profit has risen from £6m per year to £18m.

The revenue gain is good, but I think it's questionable as to whether ATW did it or the general economic climate including high fuel prices, high insurance for young drivers etc. It's happened elsewhere too, including the rather dire Northern.

The 158/Mk3 refurbs are nice, but otherwise I find ATW a scruffy, lackadaisical operation at best - certainly not something with an effective sales pitch.

 

[Bletchleyite]

What I'm saying is by yet again having a whinge about ATW making excessive profits in public they are encouraging the public to see them as rip off merchants which may lead some to think that fare dodging is morally justifiable.

Why? If we take a view that Tesco makes excessive profit, as some do, that doesn't justify robbing a loaf of bread from there. Crime is crime, regardless of whether the target may be a waste of public subsidy.

 

[Gareth Marston]

Why? If we take a view that Tesco makes excessive profit, as some do, that doesn't justify robbing a loaf of bread from there. Crime is crime, regardless of whether the target may be a waste of public subsidy.

In fairness its not going to be forum members who will see it as some sort of green light....I agree with you.

We have to think outside the forum.

 

[swt_passenger]

Unfortunately Gareth appears to let his (locally known) political agenda affect his postings on this Forum.
I see absolutely nothing in the linked article that encourages fare dodging.

Indeed the title as written actually implies a WAG purge on fare dodgers, the opposite of what I think he wants to say...

 

[Gareth Marston]

Indeed the title as written actually implies a WAG purge on fare dodgers, the opposite of what I think he wants to say...

Theirs a question mark at the end of the thread title..

If I meant a WG purge on Fare Dodgers It would have said dodgers not dodging

 

[Llanigraham]

Just so forum members are absolutely clear I do not belong nor ever have to any political party.

You do not have to be a member of any Political Party to show political bias, Gareth.

 

[swt_passenger]

Theirs a question mark at the end of the thread title..

If I meant a WG purge on Fare Dodgers It would have said dodgers not dodging

Still be wrong, IMHO. You should use FOR instead of ON, whether dodging or dodgers makes no difference.

 

[Gareth Marston]

You do not have to be a member of any Political Party to show political bias, Gareth.

As you know in Wales devolution has delivered an almost one party state for nearly 20 years now..the Welsh Government's constant line is that "its the other boys fault" which just doesn't wash. If it was the Greens in charge or the Tory's or anyone else in the same circumstances my feelings would be the same. They want to be in power but refuse to accept any responsibility for decisions they make or are associated with.

I can't remember the Welsh Labour Government making a fuss in 2003 about the franchise agreements T & C's indeed they sent out a press release telling is it was the best thing since sliced bread! If they didn't want the operator to make excessive profits then they should have done something to put clauses in place back them.

 

[Gareth Marston]

Still be wrong, IMHO. You should use FOR instead of ON, whether dodging or dodgers makes no difference.

from https://www.collinsdictionary.com/dictionary/english/

fare-dodger (ˈfɛədɒdʒə)
noun
British
a person who tries to travel on public transport without paying the fare
Ministers plan to double the on-the-spot fine for fare dodgers on trains.


fare-dodging (ˈfɛəˌdɒdʒɪŋ)
noun
British
the practice of trying to travel on public transport without paying the fare
all kinds of frauds and petty offences, from fare dodging to rigging the electricity meter

 

[Seacook]

from https://www.collinsdictionary.com/dictionary/english/

fare-dodger (ˈfɛədɒdʒə)
noun
British
a person who tries to travel on public transport without paying the fare
Ministers plan to double the on-the-spot fine for fare dodgers on trains.


fare-dodging (ˈfɛəˌdɒdʒɪŋ)
noun
British
the practice of trying to travel on public transport without paying the fare
all kinds of frauds and petty offences, from fare dodging to rigging the electricity meter

Are you trying to imply some sort of subtle distinction here? Fare dodger and fare-dodging can be used interchangeably. Just as burglaries are committed by burglars and burglars commit burglary, fare dodgers commit fare-dodging and fare-dodging is committed by fare dodgers. It is a matter of style.

However, changing ON to FOR in the thread title produces an opposite meaning.

 

[takno]

Just so forum members are absolutely clear I do not belong nor ever have to any political party.

Nobody said you did. You do appear to be implying wildly unsupported conclusions in pursuit of a one-man anti-Labour campaign though.

 

[Gareth Marston]

If a single person is encouraged to fare dodge by this constant media criticism of ATW’s profits which the Welsh Government seem happy to indulge in then it will be regrettable but if their caught and then fined in Magistrates Court and get a criminal record……

Perhaps the Welsh Government should make it clear about the consequences of fare dodging when they indulge in party politics. We all know there’s a problem with ticketless travel on ATW services and in South Wales in particular – where this newspaper’s main circulation is and where Labours core vote is. I see these comments from Welsh Government shall we say in political speak as “not helpful”.

I have every right to point out the hypocrisy and the attempt to rewrite history as the Welsh Government did play a role in letting the current Wales and Borders franchise being a willing co-signatory who presumably agreed with the SRA /Labour in Westminster at the time. If the Welsh Government came out and apologised and said it got it wrong agreeing to the Wales and Border franchise in 2003 then we’d be making progress but they don’t playing the game that it is always someone’s else’s responsibility. By saying let by “UK Government” in the article there hoping people aren’t switched on about the timeline and assume it’s the Conservatives in Westminster who let the franchise not Labour.

Many of the problems on today’s railways stem from decisions made by Labour when in power which is an uncomfortable truth for many Labour supporters/members as we’ve seen on this thread some will rather than acknowledge and address these issues continue to be denial.

 

[LNW-GW Joint]

In any case it is not Welsh money that is going into the franchise subsidies and "excess profits".
It will all be UK (DfT) money voted towards the WG to fund their management of the franchise, as in the transfer agreement.
WG are taking the risk on franchise revenues, but my perception is that as ATW are beating their revenue projections it actually turns out favourably for WG as well as ATW (ie win-win).
Have people not heard of profit share?

 

[kieron]

The UK Government they moan about was of course a Labour one with a Pontypridd MP who signed off the franchise agreement as Secretary of State.....

As far as I can tell, this isn't historically accurate.

I imagine you're thinking of Kim Howells here, as he was MP for Pontypridd between 1989 and 2010. Unfortunately, Dr. Howells has never held a cabinet position of any sort (although he has been a junior minister in the Transport department), and in those days franchises were agreed with the Strategic Rail Authority rather than the Secretary of State. I'm not sure about this, but I don't think any politician had a formal veto over its franchise awards.

Perhaps you meant something else, though?

 

[Bletchleyite]

If a single person is encouraged to fare dodge by this constant media criticism of ATW’s profits which the Welsh Government seem happy to indulge in then it will be regrettable but if their caught and then fined in Magistrates Court and get a criminal record……

...then they have got their come-uppance.

I don't see in the slightest how this is an encouragement to fare-dodge. Anyone who thinks it is is a common criminal and should be punished. It's that simple.

If you don't like what a company does, don't use it. Drive, cycle, walk, get the bus, use an English TOC where it's an option, whatever.

Does the fact that Starbucks overcharges for coffee justify nicking off with it? Hardly.

 

[LNW-GW Joint]

As far as I can tell, this isn't historically accurate.
I imagine you're thinking of Kim Howells here, as he was MP for Pontypridd between 1989 and 2010. Unfortunately, Dr. Howells has never held a cabinet position of any sort (although he has been a junior minister in the Transport department), and in those days franchises were agreed with the Strategic Rail Authority rather than the Secretary of State. I'm not sure about this, but I don't think any politician had a formal veto over its franchise awards.
Perhaps you meant something else, though?

Peter Hain (Neath) was Secretary of State for Wales 2002-8, and you'd have expected him to have some role in the process for letting the W&B franchise to Arriva in 2003, and the transfer of its management to the Welsh Government in 2006.
The actual signatures on the transfer agreement were the UK SoS and the Welsh Assembly.

 

[Gareth Marston]

Peter Hain (Neath) was Secretary of State for Wales 2002-8, and you'd have expected him to have some role in the process for letting the W&B franchise to Arriva in 2003, and the transfer of its management to the Welsh Government in 2006.
The actual signatures on the transfer agreement were the UK SoS and the Welsh Assembly.

2nd July 2003 was when I met Hain in the House of Commons as part of a delegation regarding Welsh rail services of course itwas great that Wales was going to get a say on the new franchise when it was let etc etc with the Welsh Government having that say or so said Peter Hain at the time. So having a meeting with a Welsh Labour MP who in his role as a UK government minister was talking about rail services in Wales and being given the impression that the Welsh Government was having an input also might just have lead me to believe that Welsh Labour were in on the deal. You don't blame me for thinking so? Or will someone claim Hain and his officials were telling lies to us?

still it was a memorable day all round. It was the day Nelson Mandela visited the house and the MP's staff who were with us didn't have the right clearances to take us round all areas so we somehow ended up with our own armed policeman who was quite friendly and told us about his father who use to be on the Top Link out of Old Oak Common and drove the Welsh Dragon and Cambrian Coast Express in his day....

We also sat watching ian adjournment debate about rail services through Shrewsbury in a side chamber and Michael Portillo came in and sat next to me.

 

[Gareth Marston]

...then they have got their come-uppance.

I don't see in the slightest how this is an encouragement to fare-dodge. Anyone who thinks it is is a common criminal and should be punished. It's that simple.

If you don't like what a company does, don't use it. Drive, cycle, walk, get the bus, use an English TOC where it's an option, whatever.

Does the fact that Starbucks overcharges for coffee justify nicking off with it? Hardly.

So are we saying the the Welsh Government is encouraging people not to use ATW services?