Grand Central to Blackpool denied

[WillPS]

If its losing money then thats because of the optimistic bid which Arriva made. The XC services are stupidly busy, it could be a very profitable franchise if realistically bid for

A 'realistic' bid does not win you a franchise, as the whole NXEC situation pointed out. Their bid was significantly higher than any of the others and was noted to rely on substantial passenger growth, rather than a sustainable economic bid. In the wonderful world of privatisation, it all goes to the highest (or least low in most cases) bidder.

 

[merlodlliw]

A lot of stuff gone on behind the scenes we don't know about. We do know first have 80% revenue support and some deal was done at the time of the overcrowding issues as a result of First getting flak for taking all those coaches off least at DFTs instructions. GNERs demise I understand was more down to sea containers.

Back to Moderation of competition, how far do you go? Examples of what could be blocked as a result. We assume for the sake of the examples stock and paths can be found.

Arriva trains Wales decide to extend their existing services from Wales - Birmingham international onto London non stop from international. This is an extension of an existing service but would probably fail. end quote
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I fully agree failed unit, the ATW service from Birmingham International was being looked at very carefully, questions were being asked by my A.M how could a franchise service to International suddenly become an open access service to London using franchise stock, the answer was not made by WAG due to the ORR deciding the business plan was flawed.


Bob

 

[martinsh]

Back to Moderation of competition, how far do you go? Examples of what could be blocked as a result. We assume for the sake of the examples stock and paths can be found.

East midlands trains decide to bring in a Sheffield - Blackpool service extending the London - Sheffield service. This would fail as it is competition on London - Manchester.

Not if it didn't go via Manchester, it wouldn't !

Pity the west curve at Horbury is closed otherwise the obvious route would be Barnsley and the Calder Valley. Could still run via Moorthorpe, Wakefield Kirkgate and Calder Valley. Or via Hope Valley, Guide Bridge, Ashburys, Miles Platting, Victoria and Bolton.

This last one would be popular with the producers of Coronation Street is it means you would be able to get from Victoria to London !!

Actually although Manchester - London via Sheffield would be abstraction, it would probably be allowed as it would be such an indirect service.

 

[radamfi]

In other countries, open access (as we know it) is always abstractive unless the stations served are not served by anyone else. It should be irrelevant whether the service is direct or not, as shown in Netherlands, Switzerland etc. People there take the quickest route and whether you change or not is not even an issue. In fact, open access actually increases the perception that train travel is no good unless the service is direct. Open access can only really be good if there is a signficant journey time saving, for example due to use of an otherwise unused curve.

 

[northwichcat]

Actually although Manchester - London via Sheffield would be abstraction, it would probably be allowed as it would be such an indirect service.

It wouldn't be allowed under the terms of Virgin's competition protection. An exception was made for MML to run a Manchester-Sheffield-London service during WCML engineering works.

Remember Virgin's increased competition protection stopped North Western Trains running between Rochdale, Manchester Victoria and London via the Trent Valley and they were only allowed to run the service in the first place because it served stations that Virgin didn't serve. I don't think Manchester-Sheffield-London with a call at somewhere like Chinley would have had the same outcome, although Manchester-Sheffield-Leceister may have been different.

 

[tbtc]

A 'realistic' bid does not win you a franchise, as the whole NXEC situation pointed out. Their bid was significantly higher than any of the others and was noted to rely on substantial passenger growth, rather than a sustainable economic bid. In the wonderful world of privatisation, it all goes to the highest (or least low in most cases) bidder.

I agree with you, I'd rather franchises were awarded to realistic bidders who concentrated on growth over the period of the franchise, not to the cheapest/highest bidder who then couldn't afford to speculate on improvements.

In fairness to NXEC, they did have some plans for that growth, like running daytime services to Bradford/Harrogate. This didn't happen for various reasons (including GC getting paths to Bradford, but not just that). I'd like to see something written into bids that guarantees TOCs the right to do things they have commited to in their bid (there was an example quoted of Southern's bid comiting them to run services from the WCML to south London, but this then not being allowed because Virgin objected). If the firm wins the right to the franchise then they shouldn't be impeded from doing the things they promised to do (in the way NXEC were by the granting of additional paths to GC).

Another issue would be to have some provision for economic growth/recession; for example tying the bids to performance so that a lower subsidy would be needed if the economy was growing (since that should mean higher passenger numbers), or there was some security protecting "commuter" TOCs from recession. The first franchises were set up during a long period of growth in the mid/late 1990s, which means the recession (which meant fewer jobs, which meant fewer commuters) seemed to catch TOCs by surprise. This kind of thing should be allowed for in bids. It'd also give the Government more incentive to grow the economy, stimulate demand and encourage job creation...

 

[WatcherZero]

There is talk that the next round of franchises will be tied to a cap and collar arrangement based on the RPI rather than just Revenue targets (so that if the economy shrunk they would get more revenue, if they grew faster than the economy the government would recieve higher franchise payments) we will see if that pans out.

As to elements of bids not being carried out the bid is only the first step, once the government chooses one they then enter intensive negotiations on individual services, prices, performance and cleanliness targets, mandatory or optional service requirements, what subsidy would be available for new, more frequent or longer trains, etc... takes months and can lead to tens or even hundreds of small deals with extra government support or franchisee concessions being struck before the final deal is signed. In a way the government is choosing the spirit or feel of a bid before negotiating over the nitty gritty which could produce a result quite different that that in the original bid document itself.

Its like buying a car, first you choose the one you want, then you negotiate on the price, then you customise the optional extras.

 

[WillPS]

There is talk that the next round of franchises will be tied to a cap and collar arrangement based on the RPI rather than just Revenue targets (so that if the economy shrunk they would get more revenue, if they grew faster than the economy the government would recieve higher franchise payments) we will see if that pans out.

As to elements of bids not being carried out the bid is only the first step, once the government chooses one they then enter intensive negotiations on individual services, prices, performance and cleanliness targets, mandatory or optional service requirements, what subsidy would be available for new, more frequent or longer trains, etc... takes months and can lead to tens or even hundreds of small deals with extra government support or franchisee concessions being struck before the final deal is signed.

I dislike Cap and Collar arrangements - it seems to be a way for the transport companies in question to have their cake and eat it; take this service, run it, and if your business plan doesn't work you'll still profit!

If there is no company willing to to take a risk (which is where reward should lie), then there is no reason the DfT should not directly operate that franchise.

 

[WatcherZero]

The problem is its worked the opposite way, most of the franchises have beaten their revenue targets and have no incentive for further investment because the Dft would take all the profit.