Virgin to Rebid for WCML Franchise

[MidnightFlyer]

http://www.lep.co.uk/news/lep-business/virgin_to_bid_west_coast_rail_franchise_1_2838576

Not the best railway paper, but it is just basically saying that Virin plc will bid to retain the WCML franchise in 2012... thoughts?

 

[Pumbaa]

Its not Virgin plc- its Virgin Rail Group (VRG) co-owned Virgin 51%, Stagecoach 49%

 

[Mr Spock]

Whats to say as most people would not have expected anything else.

Well I suppose I could say that I hope that they are succesful in retaining it.

 

[asylumxl]

I hope they get it. Then we can make card payments for snacks onboard on the WCML.

 

[Lampshade]

I wouldn't mind Virgin retaining the franchise provided moderation of competition ends.

 

[CosherB]

“Virgin Trains has doubled the number of customers in the last six years - to 28 million - and has been the fastest growing franchise in that time.

“That is a direct result of the bold investment decisions taken at the start of the current 15-year franchise when it was decided to replace the entire fleet of trains, upgrade the track and add many extra train services.”

Not out of Virgin's pocket, though. Surely it's the leasing company that bought the new trains, and Network Rail that upgraded the line?

 

[Pumbaa]

I wouldn't mind Virgin retaining the franchise provided moderation of competition ends.

VRG didn't want MoC and still tried to shake it off to the dying days of negotiations with the 11-car Pendos. DfT wrote it into the franchise, on the basis that they had spend billions upgrading the WCML, they wanted their franchise to deliver the goods!

 

[Dai.]

Its not Virgin plc- its Virgin Rail Group (VRG) co-owned Virgin 51%, Stagecoach 49%

People often mistake it for a PLC - but it's not important (Virgin not being a PLC in the first place. All subsidiaries of Virgin are managed by Virgin Management LTD www.virgin.com with is a Private Limited Company. Stagecoach, I believe, just wear it as a badge and have hardly any say in its running.)


@Topic - It was obvious they would rebid, all I can say is on the matter is that every time I've used them they've been friendly, the trains are nice and clean and I've been given good value for money.


Snazzy.

 

[MidnightFlyer]

Some on here say that Virgin won't retain the franchise because they have whinged to the DfT once too many times: I am aware of the frosty relationship they have with some superior bodies, but what exactly is it all over?

 

[Pumbaa]

People often mistake it for a PLC - but it's not important (Virgin not being a PLC in the first place. All subsidiaries of Virgin are managed by Virgin Management LTD www.virgin.com with is a Private Limited Company. Stagecoach, I believe, just wear it as a badge and have hardly any say in its running.)

Really? It has its own CEO, of the 9-strong senior board 4 are from inside Stagecoach, and most of the internal top management promotions come from other Stagecoach divisions.

Virgin Ltd itself has little to do with it; it gives money and the brand name to VRG and in turn the Virgin brand is stronger etc. Works both ways!

 

[rail-britain]

Stagecoach, I believe, just wear it as a badge and have hardly any say in its running

It's actually round the other way, Virgin have lost interest but it fits in with their UK transport profile
All the marketing and operations are overseen by Stagecoach
Thus in effect it is 50:50 ownership deal, a Stagecoach operation, with Virgin branding

 

[Dai.]

It's actually round the other way, Virgin have lost interest but it fits in with their UK transport profile
All the marketing and operations are overseen by Stagecoach
Thus in effect it is 50:50 ownership deal, a Stagecoach operation, with Virgin branding

Really? It has its own CEO, of the 9-strong senior board 4 are from inside Stagecoach, and most of the internal top management promotions come from other Stagecoach divisions.

Virgin Ltd itself has little to do with it; it gives money and the brand name to VRG and in turn the Virgin brand is stronger etc. Works both ways!

My apologies - I have been terribly misinformed, my understanding was completely the opposite to that.

 

[swt_passenger]

Some on here say that Virgin won't retain the franchise because they have whinged to the DfT once too many times: I am aware of the frosty relationship they have with some superior bodies, but what exactly is it all over?

It's mainly to do with the Pendolino lengthening project. Virgin's proposed terms for the work were considered no less than 'attempted blackmail' by one of the DfT ministers at the time, which is why there was a separate competition to award the lengthening contract, and the acceptance of the four new trains. This is the root cause of the new Pendo being stored until April 2010 when the new franchise starts.

More here:

http://www.railnews.co.uk/news/politics/2008/04/16-virgin-tomharris-blackmail.html

 

[Zoe]

The big question here is if Virgin will be able to maintain the "moderation of competition" clause into the new franchise.

 

[Aictos]

Well surely any franchise should be let out for periods of 20+ years Chiltern style where as the 20-year term is conditional on various investments and improvements over the life of the franchise, hence the Evergreen proposals.

Therefore making it attractive to deliver such investments and which will mean minimal DfT micromanagement except in cases where the TOC is obviously not delivering the investments and is breaking the terms of the agreement.

Such work such as Evergreen 3 will be financed by Chiltern Railways as part of its franchise agreement, and is not dependent on public funds which is how more of the upgrades across the network should be conducted, for Evergreen 4 when and if the time comes, that could be the electrification of the Chilterns.

Now I would love to see what Virgin and well as other hopefuls can bring to the table but one thing that would interest me as well as refurbishing stations is a interest in extending the 390s or extra 390s but at the same time, I would be interested if Holyhead to Crewe via Chester got electrified.

So for me, I'm interested in where this goes,

 

[Mr Spock]

The big question here is if Virgin will be able to maintain the "moderation of competition" clause into the new franchise.

Virgin have been prepared to give up MOC for some time now but it has always been the DFT who have insisted it remains in place.

I am sure that I have read that MOC will not be inclued in the new franchise, that is why other companies are lining up to introduce new services from the beginning of the new franchise.

 

[Failed Unit]

I hope the best bid wins. Not the one with the biggest premium.

 

[Mr Spock]

Well surely any franchise should be let out for periods of 20+ years Chiltern style where as the 20-year term is conditional on various investments and improvements over the life of the franchise, hence the Evergreen proposals.

I think the franchise is to be let for 14 years which will take it up to the expected introduction of HS2.

 

[Zoe]

I see to remember there are issues with the EU for granting franchises of longer than 15 years.

 

[Mr Spock]

I hope the best bid wins. Not the one with the biggest premium.

If what is said in the papers today (I know you don't usually get much truth in them) there should be more room for bidders to say what they will do rather than just bidding against the DFT specification.

The trouble is DFT will think the best bid is the one with the biggest premium so whatever bidders come up with will probably not count for much with them.

 

[Railjet]

The trouble is DFT will think the best bid is the one with the biggest premium so whatever bidders come up with will probably not count for much with them.

I doubt it. Once bitten twice shy, with the NXEC debacle.

 

[swt_passenger]

The big question here is if Virgin will be able to maintain the "moderation of competition" clause into the new franchise.

It isn't their decision to make, and in any case DfT have already confirmed it will cease then, it's mentioned in the new DfT sponsored WCML track access application. This is why LM have applied for a significant list of track access changes from April 2012.

ORR had also said quite a while ago they wanted MofC to cease at the next franchise change, back when all the arguments were going on about SN's WLL service. There was a major issue about SN calling at Wembley Central if they hadn't already passed through Clapham Jn, which went on for months - despite appearing to have very little to do with the Virgin WCML service.

 

[Pumbaa]

The big question here is if Virgin will be able to maintain the "moderation of competition" clause into the new franchise.

See above, and many times since!

VRG didn't want MoC and still tried to shake it off to the dying days of negotiations with the 11-car Pendos. DfT wrote it into the franchise, on the basis that they had spend billions upgrading the WCML, they wanted their franchise to deliver the goods!

--- old post above --- --- new post below ---

Some on here say that Virgin won't retain the franchise because they have whinged to the DfT once too many times: I am aware of the frosty relationship they have with some superior bodies, but what exactly is it all over?

It's mainly to do with the Pendolino lengthening project. Virgin's proposed terms for the work were considered no less than 'attempted blackmail' by one of the DfT ministers at the time, which is why there was a separate competition to award the lengthening contract, and the acceptance of the four new trains. This is the root cause of the new Pendo being stored until April 2010 when the new franchise starts.

More here:

http://www.railnews.co.uk/news/politics/2008/04/16-virgin-tomharris-blackmail.html

Also - from the start, VRG got details written in to their contract (now in hindsight a VERY bad idea), and ensured DfT followed it to the letter. When the WCML works went overdue and downscoped, DfT picked up the bill for the Pendos. VRG paid no leasing fees for the 390s right until the end of 2009. So DfT is very bitter about that.

Also related to the WCML debacle, VRG threw toys out of the pram in 2001 and demanded a reprise to a 'management contract' as written into their franchise, ie they pay nothing but earn nothing. Even then they managed to make money out of the brand, extras etc. This went on till 2006 when normal service was resumed, with an agreement on the payment of the 390 lease.

Virgin XC also went on a management contract for a time during it franchise.

All in all, VRG has ****ed off DfT one too many times and cost it (and the taxpayer) a fair bit of money. Good commercially, good head about them, but it doesn't compute with what DfT want!

 

[ph1985]

hopefully they keep it, seeing as they're the only operator who didn't just sit with inherited/ancient trains with a new lick of paint to protect profit margins and instead actually went out and bought new trains.

 

[Zoe]

In the case of XC, Virgin decided not to overbid and as a result lost the franchise. Will be intersting to see what they do this time.

 

[Peter Mugridge]

Would the fact of Mike Mitchell leaving the DfT mean Virgin would have a chance of a better relationship with the DfT now? And therefore a better chance of retaining the franchise?

 

[swt_passenger]

hopefully they keep it, seeing as they're the only operator who didn't just sit with inherited/ancient trains with a new lick of paint to protect profit margins and instead actually went out and bought new trains.

They DID NOT buy the trains. They are owned by a rolling stock company, and guaranteed for future use on the WCML by the DfT. Same as just about every other train that has entered service post privatisation.

The Pendolinos are really no different contractually to any other recent train such as Electrostars and Desiros...

 

[Pumbaa]

In the case of XC, Virgin decided not to overbid and as a result lost the franchise. Will be intersting to see what they do this time.

Officially yes But I think it'd be hard-pressed to rule out any grudges against VRG at that point. As far as I know, they were the first to be ruled out from the bidding process.

 

[Mr Spock]

hopefully they keep it, seeing as they're the only operator who didn't just sit with inherited/ancient trains with a new lick of paint to protect profit margins and instead actually went out and bought new trains.

As said before Virgin did not buy the trains the Rosco did.

Also when the franchise was let the agreement was that the winner (Virgin) would arrange to procure (through the Rosco) new 140mph tilting trains.

So although I hope Virgin retain the franchise do not believe everything that they say.

 

[route:oxford]

Also - from the start, VRG got details written in to their contract (now in hindsight a VERY bad idea), and ensured DfT followed it to the letter. When the WCML works went overdue and downscoped, DfT picked up the bill for the Pendos. VRG paid no leasing fees for the 390s right until the end of 2009. So DfT is very bitter about that.

Also related to the WCML debacle, VRG threw toys out of the pram in 2001 and demanded a reprise to a 'management contract' as written into their franchise, ie they pay nothing but earn nothing. Even then they managed to make money out of the brand, extras etc. This went on till 2006 when normal service was resumed, with an agreement on the payment of the 390 lease.

Virgin XC also went on a management contract for a time during it franchise.

All in all, VRG has ****ed off DfT one too many times and cost it (and the taxpayer) a fair bit of money. Good commercially, good head about them, but it doesn't compute with what DfT want!

So essentially the DfT had a tantrum because Virgin expected both parties to the contract to follow the contract!

That's the trouble in the real world, sometimes the chaps you are playing can afford better lawyers than you.