SWR, C2C, LNER Prior Information Notices for direct award

[RichSwitch]

Labour policy is, as I understand it, to take back TOCs into national ownership when contracts expire. If this dodo of a government were to rush through new contracts before waving bye bye, it looks on the face of it that they’d be banking on a one term Labour government to keep contracts private.
Now, if they were to do that then whoever took on the contract could be doing so at risk. There’s no guarantee that a contractor would be paid compensation if the contract were terminated early. This might have implications for share prices. Risk can increase or decrease share prices.

 

[Clarence Yard]

That’s not how it will work. There is a well worn legal process for nationalisation and the state has to pay compensation if a contract is terminated early for no fault on the contractors side. The state can’t try to escape that one.

Anyway, a one term Labour Government will be able to take all the DfT contracts back in house for free because the NRC’s are set up to do that. Each one has a Core Term Expiry Date (CTED) which will fall in the period of the next Government.

The Government can give three railway periods notice of termination to terminate the NRC at any time between the CTED and the final expiry date, which will always fall much later than the CTED. When they do this, it doesn’t cost them a penny because it is just a normal contract termination. This, I understand, is what Labour have been looking at.

For example, take GWR. It has a CTED of 22/06/25 and a final expiry date of 25/06/28. It could get taken into OLR as early as 22/06/25 at only 84 days notice.

 

[Goldfish62]

I wonder if First/MTR consider that this might be an opportune moment to say goodbye to SWR and let the OLR pick up the pieces?

Given that the main objective when the current contract was extended to next year was to get the 701s into service and that they are likely to fail spectacularly in that respect they don't deserve yet another chance.

 

[JonathanH]

Given that the main objective when the current contract was extended to next year was to get the 701s into service and that they are likely to fail spectacularly in that respect they don't deserve yet another chance.

Are you saying that it is solely a First/MTR issue that the 701s haven't been introduced and that another organisation taking over the service would have a magic wand to get them in service?

 

[Goldfish62]

Are you saying that it is solely a First/MTR issue that the 701s haven't been introduced and that another organisation taking over the service would have a magic wand to get them in service?

At the moment, talking to staff friends, yes. It's being chronically mismanaged with no training having started since the "soft launch" in early January.

 

[Snow1964]

Are you saying that it is solely a First/MTR issue that the 701s haven't been introduced and that another organisation taking over the service would have a magic wand to get them in service?

Not a magic wand, but rather more focus on getting training done. There is no logical reason for SWR to have accepted about 600 of 750 vehicles, and not got at least similar proportion of staff ready to use them.

You don't hear of delays training staff for 720, 710, 730 etc. No one else would ever contemplate failing to adequately staff a £1bn investment

 

[Nicholas Lewis]

Labour policy is, as I understand it, to take back TOCs into national ownership when contracts expire. If this dodo of a government were to rush through new contracts before waving bye bye, it looks on the face of it that they’d be banking on a one term Labour government to keep contracts private.
Now, if they were to do that then whoever took on the contract could be doing so at risk. There’s no guarantee that a contractor would be paid compensation if the contract were terminated early. This might have implications for share prices. Risk can increase or decrease share prices.

What Labour want to do and what they will be able to do are two different things. Reeves is beyond a stuck record now for not wanting to make any commitment to anything except supporting whatever the Tories have already committed to ie NI cuts and childcare being latest ones which are all sucking available money out of the kitty. Actually I wouldn't be surprised if they were happy to see all the NRCs extended to give them an excuse about why nationalisation can't happen anytime soon.

 

[PG]

Given that the main objective when the current contract was extended to next year was to get the 701s into service and that they are likely to fail spectacularly in that respect they don't deserve yet another chance.

Yes indeed. Seems like First/MTR are happy getting their fee with no questions asked while the 701s lie idle in storage.

 

[Snow1964]

Yes indeed. Seems like First/MTR are happy getting their fee with no questions asked while the 701s lie idle in storage.

But they would have to change if DfT sensibly refused to pay any class 455 rental fees under new contract.

Quite why it seems there are apparently no questions about leasing both old and new fleet simultaneously is beyond me

 

[Nicholas Lewis]

But they would have to change if DfT sensibly refused to pay any class 455 rental fees under new contract.

Quite why it seems there are apparently no questions about leasing both old and new fleet simultaneously is beyond me

All the while they can cobble up enough units to run the service MPs are unlikely to be getting many letters from their constituents so it doesn't get raised. Even if it did Merriman or Harper would just say its a matter for the operator.

 

[JonathanH]

Quite why it seems there are apparently no questions about leasing both old and new fleet simultaneously is beyond me

Are you expecting those questions to be in the public domain?

Who is going to be asking them? The DfT can presumably ask SWR and First / MTR questions any time it wants without having to make those discussions public.

I doubt MPs get as much correspondence about the railway now as they used to.

But they would have to change if DfT sensibly refused to pay any class 455 rental fees under new contract.

I doubt DfT is in a position to do that if it wants the rail service to continue.

There have been contracts in the past which have required rolling stock in place by a certain time. Nothing gets put in the public domain about variations to the plan, just the original contract.

 

[Snow1964]

I doubt DfT is in a position to do that if it wants the rail service to continue.

There have been contracts in the past which have required rolling stock in place by a certain time. Nothing gets put in the public domain about variations to the plan, just the original cocontract.

The difference is they are proposing to award a new long term direct award.

Unlike the emergency covid contracts and the extensions, or the variations. A brand new long term direct award has to pass the value for taxpayers test, so would get in public domain if National Audit Office felt need to comment on it not reaching the expected standard, or being excessively wasteful (which renting 2 fleets and then parking one would be).

The DfT have stated proposing direct award as per various section numbers in the legislation. Parliament didn’t give itself open invitation to do whatever it wants regardless of value.

 

[LambicHedgehog]

The difference is they are proposing to award a new long term direct award.

Unlike the emergency covid contracts and the extensions, or the variations. A brand new long term direct award has to pass the value for taxpayers test, so would get in public domain if National Audit Office felt need to comment on it not reaching the expected standard, or being excessively wasteful (which renting 2 fleets and then parking one would be).

The DfT have stated proposing direct award as per various section numbers in the legislation. Parliament didn’t give itself open invitation to do whatever it wants regardless of value.

From reading this whole thread, does this mean the 701 situation is unlikely to change substantially before the current SWR contract expires in May next year?

(That's assuming the National Audit Office do point out the current 2 fleet situation as part of the direct award process and it gets cleared up in the new contract)

 

[Clarence Yard]

The NAO don’t usually get involved in a DA - it’s the Treasury that gives it the nod. The NAO only usually gets involved in post event investigations.

The DfT are quite well aware of the cl.701 situation. They also have their fingers all over the recruitment and training plans because they have to authorise the spend.