Stagecoach disqualified from three franchise competitions

[Robertj21a]

The franchise system is a joke, too many loop holes and issues that need fixing

For all we know the government could have changed the contract last minute

?? - please explain how that would be possible.

 

[RealTrains07]

?? - please explain how that would be possible.

Again who knows?? Nobody really knows what franchising is truly like apart from the companies who take part.

 

[AndrewE]

Its pure deceit or at best lack of understanding ... I highly doubt they can commit to an unknown £ figure where a 6 billion deficit exists. This should be sounding alarm bells. Any business that makes a commitment like that is on a route to insolvency.
This system is not fit for purpose.

The only people who suffer from these incompetent companies making promises they can never sustain will be the customers with prices rises and poorer services, that isn't what the franchise model was meant to achieve.

What £6bn deficit? Are you aware that life expectancy has actually fallen in the UK (not just stopped rising, https://www.bmj.com/content/364/bmj.l1123) and the actuaries have admitted they were too pessimistic, so the big life insurance companies are now shovelling money back to their shareholders - not increasing the pitiful annuities they started paying out on the warnings of increased life expectancy. Funny, that.
Whatever figure anyone quotes is based on loads of assumptions chosen to help whoever is paying the bean-counter. If the BR scheme has assets of £27.5 bn and paid out just over £1 bn last year then I guess that it's easy for an accountant to make the case either way. It sounds about right to me, I shall not be claiming for much longer, so that's money still in the kitty invested for the future!

 

[RealTrains07]

I honestly cant see any companies left who would not make a mess of things

First - performance is terrible (GWR/TransPennine/SWR)

Abellio - performance also terrible
(Scotrail/WMR/GA) dont see how them winning EM and mabye SE will help their case?

Govia - need i say it again?
(GTR?)

 

[dgl]

It looks a lot like Stagecoach put in workable bids but the DfT is going for headlines instead. It seems it's gone from UK the taxpayer subsidising European state railways to European state railways subsidising UK rail (with the exception of First Group franchises).
Just look at SWR, we have gone from a generally profitable franchise that pays a premium to one that seems to be haemorrhaging money.
Personally I am waiting for a few more franchises to fail and give the DfT the kick up the ass it needs, it all well and good passing extra costs on to the franchisee but when that means sensible bids are no longer possible and the franchise ends up failing then something has got to give.

 

[cjmillsnun]

Meanwhile Govia get to continue as normal.

Govia were the government's stooges in the whole GTR debacle.

 

[ainsworth74]

Abellio now owns all trains based in the midlands then.
Regarding stagecoach losses with virgin, surely virgin could just partner up with SNCF and kick stagecoach out the bid??

That would depend on what SNCF want and expect their role to be. Did they expect to have significant management oversight and day to day operational involvement? Or did they expect to act more on a consultancy basis providing Stagecoach with support to develop the high speed element of the operation but without much direct involvement? Because if it was the latter than switching to the former may well not be something they're interested in!

This also supposes that the DfT would be willing and able to accept such a change at this stage in the process. Considering they're planning on announcing in June I would suggest not...

 

[cjmillsnun]

Mainly as virgin own a lot of the big stations on the WCM

Virgin own no stations, they manage them. They definitely don't manage Euston.

 

[6Gman]

Or alternatively, if it is the end of Virgin, I'll miss their fun, light-hearted approach and willingness not to take life too seriously, while getting the job done and really trying to do their best by their customers.

I can't help thinking that this will end up being a repeat of 2012 with Stagecoach/Virgin challenging the process, and there being months, even years, of legal stuff before it's settled, all of which impacts on HS2, not to mention the WCML itself.

They're not the worst but "really trying to do their best by their customers" ? My mind goes back a few years to the serious flooding when other operators operated what they could but VTWC basically just gave up. "Going to Holyhead? There's the bus." "Going to Warrington? No chance today." (Ignoring the fact that travel via Manchester was still available ...

 

[6Gman]

The BBC West Midlands news gave the impression that the Government are pushing pensions on to the operators, rather than 'own' them theirself.

But who else should fund an occupational pension scheme other than the employer? The staff work for the TOCs, not the government.

 

[6Gman]

Very good article on the risks taken by these overseas operators. Their bids are not legitimate.

https://www.standard.co.uk/business...s-are-heading-for-a-train-wreck-a4114306.html

Also from Branson

https://www.virgin.com/richard-branson/virgin-trains-could-be-gone-uk-november

Typical modesty from Branson.

Best operator in the world. Quality only we can provide.

 

[centraltrains]

If the government required the new franchises to take some sort of pension cost within the new franchise, surely it is totally reasonable for the companies who have not complied with this requirement have their bids declined?

What possible legal points would stagecoach have if they appealed?

 

[TT-ONR-NRN]

Typical modesty from Branson.

Best operator in the world. Quality only we can provide.

It is probably one of, if not the most iconic train company we have seen.

 

[Ticket Man]

Time to start working on a plan B for me. Ive still got 30 years to go and it looks like my pension won't survive that time

 

[221129]

Mabye stagecoach can bid for cross country instead??

They had their chance and didn't take it. So I doubt they will.

 

[KashmireHawker]

Here is that full statement from the above link, which demonstrates the record of Virgin and there knowledge (mostly) of the rules of the contest. However, if they have broken a competition regulation, then the DfT have taken some fair sounding action:

"I received the news this morning that the Department for Transport (DfT) has decided to disqualify our bid for the West Coast Partnership. This means that Virgin Trains could be gone from the UK in November.

I am devastated for the teams who have worked tirelessly to make Virgin Trains one of the best train companies in the UK, if not the world. Virgin Trains has led in the industry for more than 20 years and we wanted this to continue for many more years.

Running the railway comes with many challenges and the West Coast Main Line was struggling when we took it over, but we were determined to turn it around. With new trains, new track and our incredible team, we have become renowned for the award-winning way we look after our customers.

Virgin Trains is consistently at the top of the long distance franchised operators for customer satisfaction – receiving a 90% customer satisfaction rating in the National Rail Passenger Survey. We have almost tripled passenger journeys – from around 14m in 1997 to nearly 40m today – and introduced ground-breaking initiatives like automatic delay repay, Beam, and Alexa. Drawing on the expertise we’ve gained over the past two decades in the UK, Virgin Trains have also recently launched in the US and we are working to transform rail travel there too.

We’re baffled why the DfT did not tell us that we would be disqualified or even discuss the issue – they have known about this qualification in our bid on pensions for months.

Our first priority is always to look after our teams. The pensions regulator has warned that more cash will be needed in the future, but no one knows how big that bill might eventually be and no responsible company could take that risk with pensions. We can’t accept a risk we can’t manage - this would have been reckless. This is an industry-wide issue and forcing rail companies to take these risks could lead to the failure of more rail franchises.

We have significant concerns over the latest developments and their implications for the future of the UK rail market. We are still looking closely at the decision and we are now considering our options.

I want to thank all our teams for their hard work and dedication. It’s not easy working in the midst of uncertainty. Let’s continue to bring the Virgin magic to train travel that only we can."

 

[RealTrains07]

Virgin own no stations, they manage them. They definitely don't manage Euston.

Funnily enough i see a very large amount of virgin staff at both Euston and New Street, both national rail stations

I meant manage

 

[RealTrains07]

They had their chance and didn't take it. So I doubt they will.

Technically the process hasn’t really started yet since its still delayed

 

[221129]

Technically the process hasn’t really started yet since its still delayed

Yes it has, and then it was cancelled because there was only one bidder.

 

[221129]

Funnily enough i see a very large amount of virgin staff at both Euston and New Street, both national rail stations

I meant manage

And it'll be the same staff there regardless of who operates the franchise.

 

[Ticket Man]

Funnily enough i see a very large amount of virgin staff at both Euston and New Street, both national rail stations

I meant manage

Yep, Euston is definitely managed by NR. It may have VT staff working on it (such as fine chaps like me ) but NR do all the day to day stuff like ped flows, maintenance and stakeholder management.

 

[RealTrains07]

And it'll be the same staff there regardless of who operates the franchise.

Its not the staff thats looks out of place, but thats a discussion for another time

 

[RealTrains07]

Before all this stagecoach drama. I wasn’t even aware all the bidders for SE had already re-submitted their bids after DfT rejected back in December as all the bids as the contracts didnt do what they wanted

 

[Mikey C]

Virgin's style across many sectors is to offer their brand and marketing for a fee, and to leave the delivery to specialist partners.
After the 2012 WC franchise fiasco (which I think was a 50-50 bid with Stagecoach), Branson announced that they would be minority partners in future bids.
So that was why VTEC only had a 10% Virgin element. WCP had 20%, but in both cases Stagecoach was the lead bidder.
In some sectors, Virgin only take a brand commission, and don't have any management involved at all - I think Virgin Media is like that.
Virgin Atlantic, perhaps Branson's personal favourite business, is only 51% Virgin with the 49% balance owned by Delta Air Lines of the US.
Virgin America (airline - recently bought out by Alaska Airlines) and Virgin Australia were/are Virgin minority businesses because of foreign ownership rules.

Now down to 20%, as Branson sold a chunk of his stake to Air France/KLM

 

[hwl]

Yes it has, and then it was cancelled because there was only one bidder.

and DfT realised it was going to need quite a lot of change to cope with growth that it wasn't entirely clear on till things bedded down elsewhere, hence await Williams report

 

[hwl]

Before all this stagecoach drama. I wasn’t even aware all the bidders for SE had all re submitted their bids after DfT rejected all the bids as the contracts didnt do what they wanted

Bid getting refresher where errors /conflicting requirement or such are found are quite common

 

[RealTrains07]

Yes it has, and then it was cancelled because there was only one bidder

My mistake, just wasn’t big news i guess?? Any chance that 1 bidder was Arriva

 

[Mikey C]

What a shambles, but then I imagine most people outside the industry hadn't considered the complications of having a constant defined benefit pension scheme where the employees will be working for several different franchisees, especially as all such schemes (for one reason or another) seem to have big deficits.

 

[hwl]

My mistake, just wasn’t big news i guess?? Any chance that 1 bidder was Arriva

It was.

 

[RealTrains07]

Bid getting refresher where errors /conflicting requirement or such are found are quite common

I know but what i meant was that i didnt realised they had done it already, didnt think they would re submit so quickly