Rail agency proposal to 'cure chaos'

[Wilts Wanderer]

What would be far better would be giving regional government bodies control of the letting of franchises for local networks in their geographical areas and remapping the franchises to support this. If desired politically, Intercity / long distance operators could be brought back into the public realm or at least respecified under one common brand as concessions or franchises as the political tide dictates. Then you'd have an industry structure that could actually cope with the future, nationalisation, privatisation or whatever.

 

[thenorthern]

What would be far better would be giving regional government bodies control of the letting of franchises for local networks in their geographical areas and remapping the franchises to support this. If desired politically, Intercity / long distance operators could be brought back into the public realm or at least respecified under one common brand as concessions or franchises as the political tide dictates. Then you'd have an industry structure that could actually cope with the future, nationalisation, privatisation or whatever.

There aren't currently any regional government bodies outside London in England that cover a entire franchise area.

Then there are also issues that none of the English regions cover a franchise area entirely as for example who would deal with Alsager, Uttoxeter, Acton Bridge, Retford and Nantwich stations.

 

[AndrewE]

A Rail agency? yet another layer of know-nothing pen-pushers? Just give us a British Rail (answerable to one politician, the Sectretary of State) , borrowing at government rates if necessary and him or her accountable so that the purse-holders can be punished by the electorate if they fail to deliver.

This franchising (and the multiple layers of bureaucracy) is all a load of bollocks, and "how many angels can dance in the head of a pin" -type claptrap.

As I have said before, no regulator in the UK has ever caught up with its industry, let alone understood it well enough to control it. The money men run rings round the current lot of (admittedly hamstrung) civil servants! They are laughing at us - all the way to the bank.

For comparison, see how the US regulators treat businesses which exploit monopolies... our shysters support them and collect their backhanders (sorry, dividends.)

We should throw out this rubbish private-must-be-best mantra, as is being done all round the world - now that they have discovered what a con it is! The emperor truly has no clothes.
A

 

[coppercapped]

A Rail agency? yet another layer of know-nothing pen-pushers? Just give us a British Rail (answerable to one politician, the Sectretary of State) , borrowing at government rates if necessary and him or her accountable so that the purse-holders can be punished by the electorate if they fail to deliver.

This franchising (and the multiple layers of bureaucracy) is all a load of bollocks, and "how many angels can dance in the head of a pin" -type claptrap.

As I have said before, no regulator in the UK has ever caught up with its industry, let alone understood it well enough to control it. The money men run rings round the current lot of (admittedly hamstrung) civil servants! They are laughing at us - all the way to the bank.

For comparison, see how the US regulators treat businesses which exploit monopolies... our shysters support them and collect their backhanders (sorry, dividends.)

We should throw out this rubbish private-must-be-best mantra, as is being done all round the world - now that they have discovered what a con it is! The emperor truly has no clothes.
A

Ignoring most of this rant, a point of order.

The Office of the Rail Regulator in the UK was set up to ensure that a private monopoly supplier of infrastructure, Railtrack, treated all of its customers, the TOCs, equally and the charges it levied were commensurate and the process transparent.

The Rail Regulator never had, and was never intended to have, any influence or responsibilities for the TOCs which are, I deduce, are the actual objects of your ire.

The Office of the Rail Regulator was emasculated by Alastair Darling in the 2003 Railways Act when it became the Office of Rail Regulation as the then Rail Regulator, Tom Winsor, had proved to be too independent of Government.

As the infrastructure supplier, Network Rail, is now effectively part of the DfT the ORR in its original form has outlived its usefulness and has been transmogrified into the Office of Rail and Road. Neither fish, nor fowl nor good red herring.

So, to which 'regulator' are you referring?

 

[AndrewE]

So, to which 'regulator' are you referring?

The whole structure is a byzantine money-spinning fraud. So there is no regulator of the TOCs? (apart from the pretence of tendering franchises - and what a success that has proved to be!)

The fact that you need 4 paragraphs to describe the structure that is still completely unaccountable, letting politicians off the hook (while enriching myriad directors, insurers, accountants, Finance arrangers, banks, etc etc) says it all.

 

[coppercapped]

The whole structure is a byzantine money-spinning fraud. So there is no regulator of the TOCs? (apart from the pretence of tendering franchises - and what a success that has proved to be!)

The fact that you need 4 paragraphs to describe the structure that is still completely unaccountable, letting politicians off the hook (while enriching myriad directors, insurers, accountants, Finance arrangers, banks, etc etc) says it all.

Get real! I used four, very short, paragraphs to describe the history of the ORR.

I could have just said "There is no industry-wide 'regulator'", but I doubt whether you would have believed me.

If you don't know which body is the 'regulator' of the TOCs, then that lack of knowledge shows the lack of depth of analysis you have put into your rant and why it should be ignored.

If you want me, or many other people, to accept that

The whole structure is a byzantine money-spinning fraud.

then you will have to explain why. In other words - show your working.

 

[tbtc]

I guess two cheers to the Government's proposals here - it addresses some of the shortcomings of the current system without there being a magic bullet out there.

The problem is that we always seem to want the opposite of what we have.

A decade ago we saw Chiltern as the way forward, long term franchises gave stability to invest and succeed. Then we got relatively long term franchisees for Wales & Borders and Northern and moaned that they were inflexible and we shouldn't have been hamstrung by bad decisions a decade ago.

Small franchises were seen as wasteful but then people don't like big franchises like TSGN - people want large franchises like GWR broken up.

Competition is seen as a waste of resources (and we should have more integration) but then people don't want collusion or removal of cheaper fares.

The unfettered free market orders micro-fleets (e.g. 180s) and stock unsuitable for long term service (e.g. 460s) but then we don't want civil servants procuring trans (e.g. 800s).

Whichever direction the industry goes in, we'll be quick to criticise it and say that it should have gone in the exact opposite direction.

If the answer is something like London Overground, where the Government worry about the revenue and the long term decisions whilst the TOC focus on operating a good standard of service then that sounds a step in the right direction - but then that's not far off what TSGN have and we all dislike that

Sounds to me like the Tories nervously moving towards nationalisation, or as close as they dare without upsetting the out-and-out free marketeers, without actually using the N word. It also underlines my own view that the actual ownership of organisations providing public services matters rather less than the rules and oversight governing them. Given the precarious state of HMG's working majority I expect we will see similar moves in other sectors of the economy in due course. Note that today's announcement on additional money for state schools is going to be taken from the budget for Free Schools, previously something of a Tory flagship.

Good points.

This could be a savvy way of neutralising a relatively popular Labour policy (though, as often is the case, we don't really know what Corbyn wants, other than he thinks that what we currently have is bad)

What would be far better would be giving regional government bodies control of the letting of franchises for local networks in their geographical areas and remapping the franchises to support this. If desired politically, Intercity / long distance operators could be brought back into the public realm or at least respecified under one common brand as concessions or franchises as the political tide dictates. Then you'd have an industry structure that could actually cope with the future, nationalisation, privatisation or whatever.

We can't even get a "Welsh" franchise suitable for Cardiff Bay to control, because of the way that railway lines have an awkward habit of not fitting neatly into political/geographic regions.

Buxton and Glossop are in Derbyshire. Derbyshire is in the East Midlands. So do you give a hypothetical "East Midlands" government body control of these lines (when, in reality, they are branches feeding Greater Manchester)?

"Local" control of franchises would just lead to service cuts and massive disparities when you get to boundaries (e.g. look at how poor the service can get when you reach the edge of a political boundary).

A Rail agency? yet another layer of know-nothing pen-pushers? Just give us a British Rail (answerable to one politician, the Sectretary of State) , borrowing at government rates if necessary and him or her accountable so that the purse-holders can be punished by the electorate if they fail to deliver.

This franchising (and the multiple layers of bureaucracy) is all a load of bollocks, and "how many angels can dance in the head of a pin" -type claptrap.

As I have said before, no regulator in the UK has ever caught up with its industry, let alone understood it well enough to control it. The money men run rings round the current lot of (admittedly hamstrung) civil servants! They are laughing at us - all the way to the bank

So Civil Servants are rubbish, pen pushers are useless and bureaucrats are A Bad Thing...

...and your answer to this is to, erm, nationalise the railway?

I know that some enthusiasts grew up with the idea of one "proper railway man" having autonomy/power to control everything - like Sir Topham Hat - but it would never work today - a nationalised railway would be as lumbered with bureaucracy/ stakeholders/ targets/ meddling politicians as a nationalised health service (or the BBC or other large public bodies).

Rightly or wrongly, the world is a lot more complicated and expensive than in the 1980s - no Government is going to leave the railways alone for several years at a time to spend it's budget without any political interference.

 

[AndrewE]

So Civil Servants are rubbish, pen pushers are useless and bureaucrats are A Bad Thing...

...and your answer to this is to, erm, nationalise the railway?

I know that some enthusiasts grew up with the idea of one "proper railway man" having autonomy/power to control everything - like Sir Topham Hat - but it would never work today - a nationalised railway would be as lumbered with bureaucracy/ stakeholders/ targets/ meddling politicians as a nationalised health service (or the BBC or other large public bodies).

Rightly or wrongly, the world is a lot more complicated and expensive than in the 1980s - no Government is going to leave the railways alone for several years at a time to spend it's budget without any political interference.

I said the money-makers run rings round the ham-strung civil servants, not that the civil servants are incompetent, and I have yet to hear any complements about the DaFT's involvement in rail matters. You don't acknowledge the numbers and layers of accountants, Directors, consultants, banks, insurers and finance facilitators all feasting off the current set-up.

And I would be interested to hear of a regulator on top of its industry, rather than always trying to catch up.

 

[Moonshot]

I said the money-makers run rings round the ham-strung civil servants, not that the civil servants are incompetent, and I have yet to hear any complements about the DaFT's involvement in rail matters. You don't acknowledge the numbers and layers of accountants, Directors, consultants, banks, insurers and finance facilitators all feasting off the current set-up.

And I would be interested to hear of a regulator on top of its industry, rather than always trying to catch up.

meanwhile back in the rail world, passenger numbers are still rising, new trains are coming on stream , and there are a significant number of infrastructure projects all over the UK. Rail staff numbers are also increasing, and getting decent pay packets with a pension which seems to be doing quite well.

 

[NSEFAN]

A decade ago we saw Chiltern as the way forward, long term franchises gave stability to invest and succeed. Then we got relatively long term franchisees for Wales & Borders and Northern and moaned that they were inflexible and we shouldn't have been hamstrung by bad decisions a decade ago.

The difference between the chiltern franchise and wales & borders is one of aspiration. Chiltern was let on the basis that services would be improved, with the new Marylebone - Oxford service etc. Wales & Borders on the other hand was make do and mend, which does nothing to help existing passengers or encourage increased ridership. Who'd have thought that if you make a train service attractive then people would use it?

 

[Muzer]

Weren't Wales & Borders (and the previous Northern franchise too) let as "zero growth" franchises with severe restrictions on investment and spending in general (eg on staff numbers)?

 

[al78]

meanwhile back in the rail world, passenger numbers are still rising....

Which really doesn't tell you anything on its own. People don't use trains for the fun of it. More informative would to be to look at trend in modal share. Even that doesn't tell all the story, since people could shift from road to rail because the roads are getting worse than the trains, not because the rail service is getting better.

 

[Andrew1395]

GTR are paid the cost of what is run aren't they? Therefore if trains don't run and the cause is attributable to GTR they don't get paid. Isn't that how it works? I'm the last person to "apologise" for GTR so don't get the wrong idea. GTR's failings are not without consequence for the company but there is, of course, an element of "too big to fail" and doing the DfT's (Wilkinson's) bidding on the IR front. The responsibility for that rests solely in Horseferry Road.

I wouldn't say London Overground or MTR Crossrail were particularly apathetic despite TfL taking all revenue risk on those concession contracts. I've reserved judgement about Arriva on LO as I've not used the routes very much since they took over but hear rumblings that all is not well behind the scenes.

Isn't the key point here that both London Overground and MTR are contracts with local Transport Authority rather than the DfT. Not sure about Merseyrail, but I think that too is responsible to the local accountable agency, and ultimately to the public through the election of local politicians.

 

[Jordeh]

I said the money-makers run rings round the ham-strung civil servants, not that the civil servants are incompetent, and I have yet to hear any complements about the DaFT's involvement in rail matters.

There really isn't that much money being made in the rail industry, the profits are much smaller than in other industries. It partly explains why the likes of National Express have left the industry.

Are Stagecoach running rings around the DfT with VTEC? No, they're losing lots of money!

Why have so many franchises been financial failures if the money-makers are running rings around the ham-strung civil servants?

And where are these vastly profitable franchises?

You don't acknowledge the numbers and layers of accountants, Directors, consultants, banks, insurers and finance facilitators all feasting off the current set-up.

This is true of any industry nowadays whether we're talking about nationalised or private industries, they all have a role to play whether it's in the NHS, the BBC, aviation etc. Most of the groups mentioned above would have played a role when private companies built the original railways and under British Rail. They still had banks, accountants, insurers etc!

 

[LNW-GW Joint]

Rightly or wrongly, the world is a lot more complicated and expensive than in the 1980s - no Government is going to leave the railways alone for several years at a time to spend it's budget without any political interference.

Quite right.
I'd go further, and say that government (Treasury and DfT) doesn't trust "the railway" to handle large-scale finance and investment.
Time and again the railway has bungled its investment programmes, both in public and private eras.
The latest NR melt-down is only the latest in a long line of financial crises starting with the Modernisation Plan funds in 1955 - which gave us multiple mini-fleets of incompatible diesel locomotives and empty new marshalling yards.
Railtrack bungled the WCML upgrade, and now Network Rail has let the electrification bonanza turn to dust.
"Solving yesterday's problems with tomorrow's money" is how it was described by one BR Board member subsequently.

Today's TOCs are actually the best-managed portion of the railway industry, with proper cost constraints and performance targets.

 

[Gareth Marston]

Quite right.
I'd go further, and say that government (Treasury and DfT) doesn't trust "the railway" to handle large-scale finance and investment.
Time and again the railway has bungled its investment programmes, both in public and private eras.
The latest NR melt-down is only the latest in a long line of financial crises starting with the Modernisation Plan funds in 1955 - which gave us multiple mini-fleets of incompatible diesel locomotives and empty new marshalling yards.
.

Yet the multiple pick up traffic Diesels and Marshaling Yards were a result of Government interference - Jobs for private British manufacturing Companies and the continued imposition of obsolete Victorian Railway and Canal Traffic Acts. its hard to see what else British Railways could have come up with given the requirement to buy British diesels and comply with common carrier legislation short of telling Govt where to go. The narrative of BR bungling was to excuse political failure.

Railtrack was the bungling creation of politicians as is Network Rail. Network Rails ethos of over elaborate process and over engineering (with associated big cost) fitted well with what New Labour wanted at the time as nothing woudl come to fruition as they wanted the lid of the railways. However as we all know when you do want to expand the railways its the wrong type of organisation to do it cost effectively.

 

[HH]

You're making some interesting and educational points and improving our level of knowledge here, which is one of the benefits of the forum. But please spare us the know-better-than-you willy-waving!

I do try, but I get fed up with people posting uninformed opinions as if they were facts, when all they usually are is regurgitations of equally uninformed journalistic fluff.

 

[AndrewE]

There really isn't that much money being made in the rail industry, the profits are much smaller than in other industries. It partly explains why the likes of National Express have left the industry.

Are Stagecoach running rings around the DfT with VTEC? No, they're losing lots of money!

Why have so many franchises been financial failures if the money-makers are running rings around the ham-strung civil servants?

And where are these vastly profitable franchises?
This is true of any industry nowadays whether we're talking about nationalised or private industries, they all have a role to play whether it's in the NHS, the BBC, aviation etc. Most of the groups mentioned above would have played a role when private companies built the original railways and under British Rail. They still had banks, accountants, insurers etc!

The franchises may not make much money but my points are that a) they are maybe 2 dozen out of 200 companies on the current railway, and b) there is a parallel army of highly-paid hangers-on siphoning money out. I think it is this hidden world of money making that explains the otherwise inexplicable (suicidal) devotion to PFI which is bankrupting lots of hospitals and schools etc.

Most of the groups I described did NOT feature in the railway 40 years ago - a fact, unwelcome as it is to the cheerleaders for the current structure:

1) There was no place for any of the "big 4" or other accountants, there was a BR audit department - on standard rates of pay.
2) there were no bankers lending money for investment, it was given by govt. because the investment needed doing, and if taxes didn't cover the cost then govt could borrow more cheaply than any commercial loan.
3) the money middle-men didn't exist. A relative of mine more recently had a very-highly paid job in a firm in the city which existed simply to source money for PFI and similar contracts
4) There was no insurance. BR had lodged a bond somewhere and even the cars had no insurance as such (so it was easy to overlook MOT Tests - as we found out, luckily with no adverse consequences!) I think there might have been proper employers liability (to staff) insurance however.
5) Every company in the industry as it is now has to have working capital - borrowed from a bank at a "commercial" rate of interest
6) Every company has its directors etc. rather than one actual BRB and all the layers below being working managers.
7) there was no need for the million contracts between players as there are now. Even if each of 200 players had just 1 contract with each other player that's 40 000 to be drawn up, managed, scrutinised etc. I have just counted about 690 companies listed on http://www.railway-technology.com/contractors/indexAtoZ.html - BR had to buy things like cutting wheels and diggers, so even if half of the current list are doing things that used to be "internal" that is 120 000 potential commercial relationships.


I know that contractors were used for big infrastructure jobs, and they would have had all the ancillary trades needed to run private companies, but it was a relatively small part of the railway.

 

[LNW-GW Joint]

There is no way back to the closed world of BR.
All the contractual things you complain about are commonplace in the commercial world today, in its globalised and outsourced form.

The railway was once big enough to be its own market - but no longer.
We live in a competitive world of contracts, supply chains and skills specialisms,
and most other transport industries (aviation, road transport, ferries, buses) seem to cope perfectly well without continual government interference.

 

[AndrewE]

There is no way back to the closed world of BR.
All the contractual things you complain about are commonplace in the commercial world today, in its globalised and outsourced form.

The railway was once big enough to be its own market - but no longer.
We live in a competitive world of contracts, supply chains and skills specialisms,
and most other transport industries (aviation, road transport, ferries, buses) seem to cope perfectly well without continual government interference.

Am I not allowed to challenge the blanket assertion that

"Most of the groups mentioned above would have played a role when private companies built the original railways and under British Rail."

or point out that BR did not have these layers of money-sucking parasites?

Yes, at the beginning shares were sold to raise money, but most of the new "facilitators" did not even exist when the railways were being built, and in fact the railways invented quite a few things like them as internal departments to serve their own needs. Management accounting for one example, the LMS tallied all the coal and maintenance costs of each loco to analyse which classes were the most cost-effective. They just didn't pay DeLoittes or PWC a fortune to find out something where the railway owned the info in the first place.

p.s. and where, in the modern business world's

globalised and outsourced form

do the profits end up? Siphoned off through dozens of intermediaries instead of simply paying dividends to the shareholders, which is one of the current complaints about UK business.

 

[SamYeager]

The franchises may not make much money but my points are that a) they are maybe 2 dozen out of 200 companies on the current railway, and b) there is a parallel army of highly-paid hangers-on siphoning money out. I think it is this hidden world of money making that explains the otherwise inexplicable (suicidal) devotion to PFI which is bankrupting lots of hospitals and schools etc.

PFI was just a ploy by politicians to get brownie points by announcing good news whilst pushing the cost out into the future. Although it first appeared under the conservatives the use of PFI was vastly ramped up by the subsequent labour governments.

As often seems to be the case when politicians are involved the awkward bits in the small print were either overlooked or more likely dismissed as being of no great importance.

 

[tbtc]

I said the money-makers run rings round the ham-strung civil servants, not that the civil servants are incompetent, and I have yet to hear any complements about the DaFT's involvement in rail matters. You don't acknowledge the numbers and layers of accountants, Directors, consultants, banks, insurers and finance facilitators all feasting off the current set-up

It's the modern world.

Every organisation, whether public or private has layers of bureaucracy like this.

Good luck employing tens of thousands of people to carry millions of passengers without a few insurers/ accountants/ layers of bean counting.

The difference between the chiltern franchise and wales & borders is one of aspiration. Chiltern was let on the basis that services would be improved, with the new Marylebone - Oxford service etc. Wales & Borders on the other hand was make do and mend, which does nothing to help existing passengers or encourage increased ridership. Who'd have thought that if you make a train service attractive then people would use it?

True - I'm just using it as an example of how the "opposite" is often seen as a panacea in the rail industry - when we have little franchises we want mega franchises... when we have mega franchises we want little franchise. Same with long and short ones, too much politics and too little.

Quite right.
I'd go further, and say that government (Treasury and DfT) doesn't trust "the railway" to handle large-scale finance and investment.
Time and again the railway has bungled its investment programmes, both in public and private eras.
The latest NR melt-down is only the latest in a long line of financial crises starting with the Modernisation Plan funds in 1955 - which gave us multiple mini-fleets of incompatible diesel locomotives and empty new marshalling yards.
Railtrack bungled the WCML upgrade, and now Network Rail has let the electrification bonanza turn to dust.
"Solving yesterday's problems with tomorrow's money" is how it was described by one BR Board member subsequently.

Today's TOCs are actually the best-managed portion of the railway industry, with proper cost constraints and performance targets.

Depressingly accurate.

But it's easier to moan about the private TOCs than it is to find a solution to the bigger problems.

The franchises may not make much money but my points are that a) they are maybe 2 dozen out of 200 companies on the current railway, and b) there is a parallel army of highly-paid hangers-on siphoning money out. I think it is this hidden world of money making that explains the otherwise inexplicable (suicidal) devotion to PFI which is bankrupting lots of hospitals and schools etc.

Most of the groups I described did NOT feature in the railway 40 years ago - a fact, unwelcome as it is to the cheerleaders for the current structure:

1) There was no place for any of the "big 4" or other accountants, there was a BR audit department - on standard rates of pay.
2) there were no bankers lending money for investment, it was given by govt. because the investment needed doing, and if taxes didn't cover the cost then govt could borrow more cheaply than any commercial loan.
3) the money middle-men didn't exist. A relative of mine more recently had a very-highly paid job in a firm in the city which existed simply to source money for PFI and similar contracts
4) There was no insurance. BR had lodged a bond somewhere and even the cars had no insurance as such (so it was easy to overlook MOT Tests - as we found out, luckily with no adverse consequences!) I think there might have been proper employers liability (to staff) insurance however.
5) Every company in the industry as it is now has to have working capital - borrowed from a bank at a "commercial" rate of interest
6) Every company has its directors etc. rather than one actual BRB and all the layers below being working managers.
7) there was no need for the million contracts between players as there are now. Even if each of 200 players had just 1 contract with each other player that's 40 000 to be drawn up, managed, scrutinised etc. I have just counted about 690 companies listed on http://www.railway-technology.com/contractors/indexAtoZ.html - BR had to buy things like cutting wheels and diggers, so even if half of the current list are doing things that used to be "internal" that is 120 000 potential commercial relationships.


I know that contractors were used for big infrastructure jobs, and they would have had all the ancillary trades needed to run private companies, but it was a relatively small part of the railway.

A world without accountants/ insurers/ financing/ audits/ subcontractors etc and just one layer of directors?

Sounds great, but not feasible in 2017.

The real alternative is what we have now (with all of it's strengths and weaknesses) versus a "public" railway (with all of the PFI, pension reform and pay freezes that other bits of the public sector deal with).

You blame PFI which for "bankrupting lots of hospitals and schools" but how do you think a "public" railway would be funded? By the patrician Government letting it borrow unlimited sums at BoE base rate? That's not how they let hospitals and schools behave. Be realistic.

The problem is that, the further we get from BR and the more complicated the real world becomes, the rosier the "good old days" look - it's hard to argue against fact free nostalgia.

 

[AndrewE]

A world without accountants/ insurers/ financing/ audits/ subcontractors etc and just one layer of directors?

Sounds great, but not feasible in 2017.

The real alternative is what we have now (with all of it's strengths and weaknesses) versus a "public" railway (with all of the PFI, pension reform and pay freezes that other bits of the public sector deal with).

You blame PFI which for "bankrupting lots of hospitals and schools" but how do you think a "public" railway would be funded? By the patrician Government letting it borrow unlimited sums at BoE base rate? That's not how they let hospitals and schools behave. Be realistic.

The problem is that, the further we get from BR and the more complicated the real world becomes, the rosier the "good old days" look - it's hard to argue against fact free nostalgia.

BR did have most of these things, but as internal departments. Standard pay rates, section heads and one Board. The City must have been pig-sick!
I don't think there is any argument that PFI is bankrupting the public services it has been applied to, If you had the choice would you live in a house that someone else controlled when it could have been yours (or was originally)?
Why must the current way be the only way? Are you afraid of publicly-financed infrastructure, or afraid of missing the gravy-train? It would only be a penny or two on income tax (and cracking down on evasion.)
"Those who do not learn from history are doomed"... to repeat the pre-Victorian errors!

 

[coppercapped]

BR did have most of these things, but as internal departments. Standard pay rates, section heads and one Board. The City must have been pig-sick!
I don't think there is any argument that PFI is bankrupting the public services it has been applied to, If you had the choice would you live in a house that someone else controlled when it could have been yours (or was originally)?
Why must the current way be the only way? Are you afraid of publicly-financed infrastructure, or afraid of missing the gravy-train? It would only be a penny or two on income tax (and cracking down on evasion.)
"Those who do not learn from history are doomed"... to repeat the pre-Victorian errors!

Apart from the IEP and Thameslink trains deals I am not aware of any other significant PFI, or PFI-type, deals involving the railways. Certainly not for infrastructure where the current efforts of the DfT and NR are to find ways to get private companies to invest in infrastructure.

Are there any other such deals?

 

[F Great Eastern]

The Era of Richard Bowker and the SRA was a complete disaster and we MUST not return to those days because they were very miserable indeed for many people who had the misfortune to be using operators that were franchised under that regime.

I agree the current system is not ideal however, since it allows government to nationalise the credit and privatise the blame.

 

[HSTEd]

remind me again about how much premia is now returned to the state.....

Less than zero.
Almost all the money returned as premia is only returned because the operators pay far less than economic rates for track maintenance.

Its a lie to decieve the public into thinking that the privatised railway is not a money pit.

 

[LNW-GW Joint]

Apart from the IEP and Thameslink trains deals I am not aware of any other significant PFI, or PFI-type, deals involving the railways. Certainly not for infrastructure where the current efforts of the DfT and NR are to find ways to get private companies to invest in infrastructure.
Are there any other such deals?

Network Rail used to be funded by a giant PFI, allowing its borrowings to reach £40 billion or so against future income, which the government guaranteed.
Now it has to live within its Treasury-imposed funding limits.

All rolling stock leasing deals are essentially PFI deals, allowing the railway to avoid the capital cost of procurement.
Most new rolling stock deals now also include maintenance from the manufacturer, ie outsourcing the job from the TOC and wrapping it up in the leasing charge.

The recent Train Management System for the GW route has been funded by allowing the contractor to be paid out of performance improvements, rather than paying up front.

All this is to keep capital costs off the railway's books (and to some extent to export risk).
The nationalisers have yet to explain how the Treasury would cope with internalising all this railway cost in the future (and that of water, energy etc).

 

[edwin_m]

Network Rail used to be funded by a giant PFI, allowing its borrowings to reach £40 billion or so against future income, which the government guaranteed.
Now it has to live within its Treasury-imposed funding limits.

All rolling stock leasing deals are essentially PFI deals, allowing the railway to avoid the capital cost of procurement.
Most new rolling stock deals now also include maintenance from the manufacturer, ie outsourcing the job from the TOC and wrapping it up in the leasing charge.

The recent Train Management System for the GW route has been funded by allowing the contractor to be paid out of performance improvements, rather than paying up front.

All this is to keep capital costs off the railway's books (and to some extent to export risk).
The nationalisers have yet to explain how the Treasury would cope with internalising all this railway cost in the future (and that of water, energy etc).

I wouldn't describe the previous Network Rail as a PFI, because the overspend costs would (and will) come back to the public sector eventually. In a true PFI overspend on the construction cost is at the risk of the delivering contractor. It does have in common with PFI the fact that is delivers something now (or doesn't in the case of some of the eletrifications) which future generations have to pay for.

Maintenance cost is an ongoing spend, so paying it to the manufacturer rather than some other organisation doesn't change the spend profile. In principle having the manufacturer do it is a good thing, because they are then incentivised to produce trains that are easy to maintain and also gain experience in how they can tweak their designs to achieve that.

Of these examples the train management system is closest to a true PFI because the supplier appears to be taking the risk and will not get paid if their system is unable to deliver the promised performance improvements, though I imagine the contractual clauses around whether and how NR signallers make use of the train management systems's recommendations will make interesting reading.

 

[coppercapped]

Network Rail used to be funded by a giant PFI, allowing its borrowings to reach £40 billion or so against future income, which the government guaranteed.
Now it has to live within its Treasury-imposed funding limits.

All rolling stock leasing deals are essentially PFI deals, allowing the railway to avoid the capital cost of procurement.
Most new rolling stock deals now also include maintenance from the manufacturer, ie outsourcing the job from the TOC and wrapping it up in the leasing charge.

The recent Train Management System for the GW route has been funded by allowing the contractor to be paid out of performance improvements, rather than paying up front.

All this is to keep capital costs off the railway's books (and to some extent to export risk).
The nationalisers have yet to explain how the Treasury would cope with internalising all this railway cost in the future (and that of water, energy etc).

Your understanding of the meaning of a Private Finance initiative differs from mine and the accepted meaning in financial circles.

The accepted definition of a PFI is a method of providing funds for major capital investments where private firms are contracted to complete and manage public assets such as schools, prisons, hospitals and transport infrastructure. Under a PFI the private company, instead of the government, handles the up-front costs. The asset remains owned by the private company which then leases it to the government organisation, and the government authority makes annual payments to the private company. The term for such an arrangement is typically 25 to 30 years after which the ownership of the asset reverts to the appropriate Government body.

In the case of NR the money borrowed was largely used for operational expenditure rather than capital expenditure, so does not fall under the PFI definition. The capital enhancements have been added to NR's Regulated Asset Base and have not been identified as being owned by the financiers, so these also fail the test.

An example. Rebuilding Reading Station and approaches cost in the order of £900 million. If this money had been raised by XYZ Capital Assets plc and the station and surrounding infrastructure was owned by it and NR paid a lease for its use, then it would have been a PFI deal. No such financial construct exists so it is not a PFI deal.

The leasing of trains, with the exception of IEP and Thameslink, are also not PFI deals by definition as the bodies leasing the trains are not Government entities.

I repeat, there have been no PFI deals or arrangements by NR with regard to the infrastructure. Changing the definition of 'PFI' to suit one's argument is a typical rhetorical trick used by politicians. Please don't do it!

 

[43096]

The leasing of trains, with the exception of IEP and Thameslink, are also not PFI deals by definition as the bodies leasing the trains are not Government entities.

I would add that leasing of equipment is a common occurrence: many airlines will lease new planes, for example. It's a standard business practice.

It is also something that has been going on for ages in the railway - wagon leasing has been going on for decades. Locomotive and coach leasing is becoming more common elsewhere, witness the rise of Alpha Trains, Railpool, ELL etc.