The Telegraph: Possible First Group Break Up?

[Robertj21a]

Does anyone who is suggesting that stagecoach could be re-awarded the swt/swr contract seriously think that's going to happen?

I'd imagine the DfT would rather see below freeze over before trying to turn back the clock.

Even if it was the most sensible option financially and from an operational perspective, the political backlash would be extreme and that alone would prevent Grayling and his minority government from doing it.

Yes, anything is possible. It's more a question of whether Stagecoach would be interested without some changes to the existing franchise.

 

[moley]

Yes, anything is possible. It's more a question of whether Stagecoach would be interested without some changes to the existing franchise.

I think if it avoids DfT having to use the operator of last resort then yes, Stagecoach acquiring the SWR franchise would be better for DfT.

I would however expect that Stagecoach will only do so on the premise that certain renegotiations are signed off in advance - specifically, a rebasing of the premiums to be paid based on a lower usage network and a December 19 change to mainline services and December 21 change to metro services. I would then expect that those changes in December 19 will look slightly different to what FirstMTR proposed whilst still meeting the ITT.

 

[Domh245]

The only way in which stagecoach wiule take over the SW franchise again would be by buying out First MTR South western trains ltd and continuing to deliver as per that contract/attempting to renegotiate it as first are doing. They won't be awarded it by the DfT as the procurement processes has long ended, it'd go to OLR and then be re tendered.

 

[moley]

The only way in which stagecoach wiule take over the SW franchise again would be by buying out First MTR South western trains ltd and continuing to deliver as per that contract/attempting to renegotiate it as first are doing. They won't be awarded it by the DfT as the procurement processes has long ended, it'd go to OLR and then be re tendered.

Doesn't stop DfT agreeing to renegotiate with FirstMTR on agreement that the franchise is then sold to Stagecoach. As I understand it, the franchisee can only be sold with DfT approval.

 

[ivanhoe]

Stagecoach have only recently handed back the keys to Dft for East Coast. The Government is in a mess with Brexit at the moment and the last thing it wants is further reminders of its incompetence in respect of rail franchising from the Opposition and the media. The breaking up of First is not the only option available. It could try and improve its operations to restore a bit more credibility to its balance sheet. Other than that, First UK and First North America would be the lesser of two evils.

 

[Robertj21a]

I can't see there being a First UK (train or bus) before long.

 

[moley]

Stagecoach have only recently handed back the keys to Dft for East Coast. The Government is in a mess with Brexit at the moment and the last thing it wants is further reminders of its incompetence in respect of rail franchising from the Opposition and the media. The breaking up of First is not the only option available. It could try and improve its operations to restore a bit more credibility to its balance sheet. Other than that, First UK and First North America would be the lesser of two evils.

The East Coast franchise is different though. You don’t get so many franchisees having problems without there being an underlying cause which isn’t being dealt with.

Stagecoach have a track record with SWT so if First renegotiated and then sold out, the bad press would be on First not DfT.

 

[coppercapped]

The German commercial rail tends to be more concessions than franchises, they just operate the services for a fee and are given the rolling stock to do it (which is usually owned by local governments), a lot like subsidised and school bus operations in this country. They don't tend to take on revenue risk or pay franchise premiums.

I know it's different - I was responding to this message which did not mention franchising at all

Keep them away from rail period.

and simply pointed out that other countries did not share the poster's views.
In my understanding of the situation in Germany, with one exception, the operators of these local services do lease the stock from a ROSCO equivalent, however in some of the Länder, for example Baden-Württemberg, the ROSCO is a company owned by the Land. The exception is for those local service contracts won by DBAG where it uses its own rolling stock.

 

[gimmea50anyday]

Stagecoach didn't order bombardier products. The 220s were ordered by virgin which Stagecoach were minority shareholders of, while the 222 and 170 were ordered by midland mainline under National Express and hull trains under First. Stagecoach preferred Siemens on SWT and haven't ordered anything stockwise for EMT.

 

[moley]

Stagecoach didn't order bombardier products. The 220s were ordered by virgin which Stagecoach were minority shareholders of, while the 222 and 170 were ordered by midland mainline under National Express and hull trains under First. Stagecoach preferred Siemens on SWT and haven't ordered anything stockwise for EMT.

Who ordered the original SWT 170s which were new to the franchise?

 

[DanTrain]

SNCF are part of the stagecoach/virgin bid for WCP, and own 70% of Keolis - who've now got the W&B franchise, as well as the govia franchises (35% owned)

Oh ok thanks - I’ve never quite got my head around the many layers of companies involved in the railways - I mean how is the public supposed to understand that the French National Railway operator has a 70% stake on Keolis, which in turn has a 35% stake in Govia, which is the company that runs GTR (slightly more obvious) and Southeastern, who most wouldn’t even associate with Govia, never mind Keolis and then SNCF behind them and the French government behind them...

 

[3141]

Oh ok thanks - I’ve never quite got my head around the many layers of companies involved in the railways - I mean how is the public supposed to understand that the French National Railway operator has a 70% stake on Keolis, which in turn has a 35% stake in Govia, which is the company that runs GTR (slightly more obvious) and Southeastern, who most wouldn’t even associate with Govia, never mind Keolis and then SNCF behind them and the French government behind them...

I sympathise with that, but when shortlists are drawn up, and franchises are awarded, the details of the companies involved are published and there is usually something about who owns what, and it's all available through the Internet. So I guess any member of the public who wants to know can easily find out. But I'll admit I haven't bothered to find out much about "MTR West Coast Partnership Ltd, a joint venture of the MTR Corp (UK) Ltd subsidiary of Hong Kong’s MTR Corp and Guangshen Railway Co which operates the 481 km Shenzhen – Guangzhou – Pingshi Railway in China, with key sub-contractors including consultancy Deloitte MCS Ltd, Panasonic Systems Europe, Swedish travel software company Snowfall, ticket retailer Trainline.com Ltd and engineering consultancy WSP Parsons Brinkerhoff".

 

[coppercapped]

Oh ok thanks - I’ve never quite got my head around the many layers of companies involved in the railways - I mean how is the public supposed to understand that the French National Railway operator has a 70% stake on Keolis, which in turn has a 35% stake in Govia, which is the company that runs GTR (slightly more obvious) and Southeastern, who most wouldn’t even associate with Govia, never mind Keolis and then SNCF behind them and the French government behind them...

If the public wants to know, it's easy to find out.
If they don't want to know, then they will be permanently surprised by a lot of stuff...

 

[DenmarkRail]

Main points from a day of reading into this -

1. Although it seems many want to see Stagecoach come back, I can't see it happening. I suppose you should move on. I'd love to see Virgin XC back, but I care about it.

2. First is in a bad place, and I think huge changes will come about from this.

3. I don't think we'll be saying goodbye to first railways anytime soon... Maybe we'll see some changes though.

4. First's survival depends on getting this right.

 

[LLivery]

Who ordered the original SWT 170s which were new to the franchise?

Totally forgot SWT had 170s once upon a time. I believe they did order the 8 of them. 8 is a tiny number...

 

[LLivery]

To me, it seems increasingly obvious that this system will not last much longer. Connex, GNER, NXEC and VTWC have all failed, GTR/Southern is a metaphor for rubbish, SWR is increasingly unpopular, Northern is a mess, TPX is losing money, foreign operators have their own problems, the DfT is struggling to get 3 bidders for franchises, public opinion 70% against privatisation, fares are too high, passenger numbers are falling, Network Rail has its list of problems and regional devolution is being increasingly called for.

Additionally, there are economic rumors that another recession is pending (Brexit or No Brexit). If that happens, it may get worse.

Reforms are inevitable; the question is, what will it be (nationalisation, grouping style, etc.) and who will do it?

Edit: My feeling is First will jump ship from rail soon enough

 

[SideshowBob]

Lots of posts on this thread mentioning that TPE is making a loss? Hard to understand why. The trains are frequently busy and overcrowded, and prior to the last timetable change, the service wasn't impossibly unreliable in the way it has been since. Apart from the timetable, the only major change has been that First no longer operate the franchise in partnership with anyone else. I'm presuming that the DfT are shelling out for the new trains. I don't understand why the franchise isn't making money so what am I missing?

 

[NorthernSpirit]

First should (in my view)
-Pull out of WCP
-Sell 50% of SWR to another operator / MTR
-Sell TPE
-Retain GWR

Personally I think First should...
- Sell both TPE and GWR to Trenitalia.
- Flog their share in SWR to Stagecoach.

Then for their bus division...
- Sell Worcestershire, Potteries and Leicester operations off to National Express.
- Break up First West Yorkshire and sell to Stagecoach, Trenitalia (if they fancy having a go running buses) Go Ahead and Transdev. (By smashing the almost monopoly in West Yorkshire your increasing and encouraging competition).
- Sell the Kernow operation off to Cornwall Council so that they can 'state run' the local bus network.

 

[dorsetdesiro]

Main points from a day of reading into this -

1. Although it seems many want to see Stagecoach come back, I can't see it happening. I suppose you should move on. I'd love to see Virgin XC back, but I care about it.

2. First is in a bad place, and I think huge changes will come about from this.

3. I don't think we'll be saying goodbye to first railways anytime soon... Maybe we'll see some changes though.

4. First's survival depends on getting this right.

Perhaps First should become the minority partner, with SWR they could swap sides with MTR that MTR take over more of the running of operations? Also bring in partners for TPE and GWR - maybe these would be labelled as "A Trenitalia First Company"?

Or even MTR also get involved with TPE & GWR?

 

[dorsetdesiro]

Personally I think First should...
- Flog their share in SWR to Stagecoach.

If not Stagecoach, maybe outright to MTR?

 

[hwl]

Given TrenItalia have now withdrawn for any non HS franchise bidding activity (SouthEastern etc.) what makes people think they would take on anything from First?

 

[hwl]

If not Stagecoach, maybe outright to MTR?

MTR's view is that they can only sensibly handle 4 franchises /concessions in Europe where they are the lead company in the Franchise. They have 4 Franchises /Concessions across Europe so not much interest in being the lead in any more than that and some of the existing ones are/will be quite demanding e.g. Crossrail

 

[SideshowBob]

Personally I think First should...
- Sell both TPE and GWR to Trenitalia.
- Flog their share in SWR to Stagecoach.

Then for their bus division...
- Sell Worcestershire, Potteries and Leicester operations off to National Express.
- Break up First West Yorkshire and sell to Stagecoach, Trenitalia (if they fancy having a go running buses) Go Ahead and Transdev. (By smashing the almost monopoly in West Yorkshire your increasing and encouraging competition).
- Sell the Kernow operation off to Cornwall Council so that they can 'state run' the local bus network.

Perhaps First should become the minority partner, with SWR they could swap sides with MTR that MTR take over more of the running of operations? Also bring in partners for TPE and GWR - maybe these would be labelled as "A Trenitalia First Company"?

Or even MTR also get involved with TPE & GWR?

If not Stagecoach, maybe outright to MTR?

Or, if First actually do go bust, the sensible option could be taken and all First-operated rail franchises could be nationalised and run in the same way that East Coast was, and this circus of private franchisee failure could start to come to an end, thus helping to lessen the nightmarishly fragmented and bureaucratic way in which the UK rail network operates?

 

[43096]

I don't know what website or article you're writing, but I'd suggest that asking on these chat boards for factual information about a company's profitability isn't exactly doing due factual diligence. You need to consult the first group accounts, but aside from general info I don't think they break down rail business accounts into TOC level.

Or just get the relevant accounts for the TOC from the Companies House website.

Much easier to get someone else to find information rather than doing it yourself....

 

[dorsetdesiro]

Or, if First actually do go bust, the sensible option could be taken and all First-operated rail franchises could be nationalised and run in the same way that East Coast was, and this circus of private franchisee failure could start to come to an end, thus helping to lessen the nightmarishly fragmented and bureaucratic way in which the UK rail network operates?

If GWR, SWR and TPE all get nationalised, then the Transport Secretary would be b*ggered for real so a good way to get rid of him!

 

[SideshowBob]

If GWR, SWR and TPE all get nationalised, then the Transport Secretary would be b*ggered for real so a good way to get rid of him!

Everyone's a winner!

 

[coppercapped]

Everyone's a winner!

No, nobody will be a 'winner'.

There will be no significant change at all in the financial results or train performance until the DfT understands what its job is.

And its job is not pretending to be either the Strategic Rail Authority or the British Railways Board.

 

[SideshowBob]

Lots of posts on this thread mentioning that TPE is making a loss? Hard to understand why. The trains are frequently busy and overcrowded, and prior to the last timetable change, the service wasn't impossibly unreliable in the way it has been since. Apart from the timetable, the only major change has been that First no longer operate the franchise in partnership with anyone else. I'm presuming that the DfT are shelling out for the new trains. I don't understand why the franchise isn't making money so what am I missing?

No, nobody will be a 'winner'.

There will be no significant change at all in the financial results or train performance until the DfT understands what its job is.

And its job is not pretending to be either the Strategic Rail Authority or the British Railways Board.

OK, so if First Group's apparent financial problems have something to do with the DfT, and replacing the unpopular and widely discredited person currently in charge of the DfT wouldn't help, what would?

 

[dk1]

Hasn't seemed to have much an effect on the share price yet. Here's hoping

 

[Leep1]

Time to bring the franchises back under public ownership.