This is the discussion in parliament about it
http://www.bbc.co.uk/iplayer/episode/b00gwkyy/Select_Committees_Rail_Franchising_Committee/
http://www.bbc.co.uk/iplayer/episode/b00gwkyy/Select_Committees_Rail_Franchising_Committee/
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National Express Group to give up franchises??
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Whitehall puts five train operators on financial critical list
http://www.guardian.co.uk/travel/2009/jan/24/rail-travel-transport
Five rail franchises have been put on the "red light" list of train operators in difficulty by the Department for Transport.
The civil servant in charge of Britain's railways, Dr Mike Mitchell, surprised public transport groups this week by revealing to MPs that a "small number" of franchises are red on his department's "traffic light" system that monitors the financial health of rail companies. It is understood that Mitchell later named five franchises - more than a quarter of the network - to the public accounts committee in a private meeting. The DfT declined last night to comment on what a "red light" signifies, stating that the monitoring system was "commercially and market sensitive".
Mitchell told a public hearing of the committee on Wednesday that revealing the names of the franchises in question could affect share prices, indicating that their owners are among the "big five" public transport groups: National Express, Stagecoach, FirstGroup, Go-Ahead Group and Arriva.
Renegotiation of terms is taboo at the DfT, which prefers to strip franchise owners of their contracts rather than rewrite the deals. But it also has the power to strip a company of all its contracts if it defaults on one franchise - raising the prospect of multiple defaults as the recession bites.
Mitchell's appearance at the public accounts committee on Wednesday came one day after the transport secretary, Geoff Hoon, met the chief executives of the five major transport groups and other rail franchise executives. A briefing note for the meeting prepared by the train operators warned that the recession could have "potentially devastating" consequences for the finances of some companies.
The document sets out potential changes including: shortening off-peak trains; easing borrowing restrictions; the government taking a greater share of losses on underperforming franchises; state subsidy of cost-saving initiatives such as energy metering; and deferral of Network Rail work in order to cut track access charges. It also suggests government funding for an extra 1,000 franchise staff to "help kick-start the economy".
The Association of Train Operating Companies and the DfT denied that the ideas were raised at the meeting and refused to comment on the memo. But it is understood that the memo was drawn up in order to prove that the industry is "planning proactively" but may need assistance to get through the downturn.
The eight most recently awarded franchises are expected to turn a net state subsidy of £811m last year into a state profit of £326m by 2012. However, that equation was predicated on strong passenger growth over the next five years, including an undiminished public appetite for above-inflation fare rises. According to the ATOC memo, the industry is entering "the most severe economic downturn since privatisation". Passenger numbers will be hit in 2009 and 2010, it adds, "with volume falls expected in both years".
Stagecoach, whose rail business comprises South West Trains, East Midlands Trains and co-ownership of Virgin Trains, declined to comment when asked if it had been notified of the "red light" list yesterday. Go-Ahead, owner of the Southeastern, London Midland and Southern franchises, also declined to comment, as did Arriva, owner of the Cross Country and Arriva Trains Wales services, and National Express, owner of the East Coast, c2c and East Anglia franchises.
FirstGroup, owner of four franchises including First Great Western, said it would be "very surprised" if it owned one of the "red light" franchises.
http://www.guardian.co.uk/travel/2009/jan/24/rail-travel-transport
Five rail franchises have been put on the "red light" list of train operators in difficulty by the Department for Transport.
The civil servant in charge of Britain's railways, Dr Mike Mitchell, surprised public transport groups this week by revealing to MPs that a "small number" of franchises are red on his department's "traffic light" system that monitors the financial health of rail companies. It is understood that Mitchell later named five franchises - more than a quarter of the network - to the public accounts committee in a private meeting. The DfT declined last night to comment on what a "red light" signifies, stating that the monitoring system was "commercially and market sensitive".
Mitchell told a public hearing of the committee on Wednesday that revealing the names of the franchises in question could affect share prices, indicating that their owners are among the "big five" public transport groups: National Express, Stagecoach, FirstGroup, Go-Ahead Group and Arriva.
Renegotiation of terms is taboo at the DfT, which prefers to strip franchise owners of their contracts rather than rewrite the deals. But it also has the power to strip a company of all its contracts if it defaults on one franchise - raising the prospect of multiple defaults as the recession bites.
Mitchell's appearance at the public accounts committee on Wednesday came one day after the transport secretary, Geoff Hoon, met the chief executives of the five major transport groups and other rail franchise executives. A briefing note for the meeting prepared by the train operators warned that the recession could have "potentially devastating" consequences for the finances of some companies.
The document sets out potential changes including: shortening off-peak trains; easing borrowing restrictions; the government taking a greater share of losses on underperforming franchises; state subsidy of cost-saving initiatives such as energy metering; and deferral of Network Rail work in order to cut track access charges. It also suggests government funding for an extra 1,000 franchise staff to "help kick-start the economy".
The Association of Train Operating Companies and the DfT denied that the ideas were raised at the meeting and refused to comment on the memo. But it is understood that the memo was drawn up in order to prove that the industry is "planning proactively" but may need assistance to get through the downturn.
The eight most recently awarded franchises are expected to turn a net state subsidy of £811m last year into a state profit of £326m by 2012. However, that equation was predicated on strong passenger growth over the next five years, including an undiminished public appetite for above-inflation fare rises. According to the ATOC memo, the industry is entering "the most severe economic downturn since privatisation". Passenger numbers will be hit in 2009 and 2010, it adds, "with volume falls expected in both years".
Stagecoach, whose rail business comprises South West Trains, East Midlands Trains and co-ownership of Virgin Trains, declined to comment when asked if it had been notified of the "red light" list yesterday. Go-Ahead, owner of the Southeastern, London Midland and Southern franchises, also declined to comment, as did Arriva, owner of the Cross Country and Arriva Trains Wales services, and National Express, owner of the East Coast, c2c and East Anglia franchises.
FirstGroup, owner of four franchises including First Great Western, said it would be "very surprised" if it owned one of the "red light" franchises.
More speculation, based on what happened in the early 90s. I won't guess which franchises, but I suspect the main London based commuter networks, which they are nervous about due to loss of jobs in the city. Rail has 82% of the market in getting people to/from work in this area.
http://www.bbc.co.uk/iplayer/episode/b00gthhq/Million_Dollar_Traders_Make_Me_a_Trader/
Watch here at 20 mins through have 'investors' make profit out of companies that lose share price - otherwise known as short selling. The truth is much of this 'investing' and financial services is just legalised gambling and manipulation at the expense of the rest of us.
http://www.bbc.co.uk/iplayer/episode/b00gthhq/Million_Dollar_Traders_Make_Me_a_Trader/
Watch here at 20 mins through have 'investors' make profit out of companies that lose share price - otherwise known as short selling. The truth is much of this 'investing' and financial services is just legalised gambling and manipulation at the expense of the rest of us.
I'd say one of those is wrong, think London commuter and recent stories. Trouble is, the DfT are idiots, anyone can work this out who knows anything about the subject, I suspect the share price will now plunge. NR are already cutting back on maintenance. The tax payer will pick up the bill for all of this little social experiment.
I suspect crossrail will be the next victim.
I suspect crossrail will be the next victim.
I put it up hesitantly, but only because I was taking First' assertion that none of their franchises were in trouble for the absolute truth. To me, it seemed like the only reasonable one left of what it could be.
I would have maybe pencilled Northern in, as they are so large, and only a few guaranteed routes of commute, but from what I've seen they were doing pretty well for themselves.
I would imagine it's a possibility that they consider, before throwing it out of the window. Reasons being the Conseratives will laugh at them wasting money, and it will cause them a headache that I'm sure they feel that they could do without at the moment.
The most likely option is in my honest opinion, to prop up the struggling franchises with extra money injections, before rationalising the entire thing - by either giving away 5 super franchises or giving away the whole network to a private operator. Which would only make things worse...
The most likely option is in my honest opinion, to prop up the struggling franchises with extra money injections, before rationalising the entire thing - by either giving away 5 super franchises or giving away the whole network to a private operator. Which would only make things worse...
Well whatever happens I think we'll see the weakness of the franchise system, especially with such heavy specification from the DfT - which precludes businesses operating like businesses. Normally at this stage a business would knock out certain services, but that wouldn't be a public service. The other option would be to pump more money in - against government policy. Or strip the companies of franchises, but which private company is going to get involved with a loss making specification in a downturn - assuming they can raise the money with the credit situation or plunging share prices?
They would never give it to one private company - too monopolistic. They might split it into 5 but due to EU law would have to maintain open access.
They would never give it to one private company - too monopolistic. They might split it into 5 but due to EU law would have to maintain open access.
Phoenix
Established Member
You would say that at first but believe me you do not want that.
I like Virgin...
And besides - no one knows whats happening yet.
National Express may not even be a "traffic lighted" company...
And we don't know that National Express - if they are - are going to give up their Franchises!!
And that scottish DFT man is a liar - AXC is apparently only really overcrowded between Derby and New St. I think not...
And besides - no one knows whats happening yet.
National Express may not even be a "traffic lighted" company...
And we don't know that National Express - if they are - are going to give up their Franchises!!
And that scottish DFT man is a liar - AXC is apparently only really overcrowded between Derby and New St. I think not...
Techniquest
Veteran Member
To the dark side welcome you are !!
--- old post above --- --- new post below ---
Or how about a 225 in GC Livery !!! lol(sits and waits for all the anti GC plebs to have a go !!!)
You know, that's actually the most sensible thing I've heard in ages, GC having the East Coast franchise.
Someone asked why people hate NXEC. A few reasons:
- Mostly (if not all) same staff as from GNER, which were awfully pig-headed, rude and non-passenger focused.
- Always late when I use them, no matter what, same as GNER for me.
- Horrible trains (well, I did enjoy the sets I had the other week but there weren't MK4s), especially the MK4s IMO.
- Horrible livery, GNER even worse.
- Most expensive fares anywhere on the network
That's just a few, I can't be bothered to write them all out.
Mintona
Established Member
Think FGW, FCC and SWT are maybe likely to be in trouble.
Phoenix
Established Member
It's a tad scary I mean personally I think it will work out in the end it always does but the knock on effects can well effect alot of people.
90019
Established Member
But they'll never get the East Coast franchise whilst they have the West Coast one.
But with all this talk of the possibility of renationalisation, I wonder what a 180 would look like in IC swallow
Well hopefully the government won't have to nationalise/bail out every economic sector, else we'll be going bankrupt.
Your favourite paper, the Daily Mail is already onto this possibility:
http://www.dailymail.co.uk/debate/a...upt-Britain-The-answers-questions-asking.html
There is no way any self respecting person should be wishing for any companies demise - I find enthusiasts wishing for certain companies demise breathtaking.
Your favourite paper, the Daily Mail is already onto this possibility:
http://www.dailymail.co.uk/debate/a...upt-Britain-The-answers-questions-asking.html
There is no way any self respecting person should be wishing for any companies demise - I find enthusiasts wishing for certain companies demise breathtaking.
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That's the problem though, with Unemployment levels what they were even during the "boom" years thanks to a decline in manufacturing is it better for the Government to create non-jobs or pay people to vegetate all day? On the other hand, if the Government wants to create jobs, then I can think of a few positions on the railway I'd like to see created
You want my opinion? People should create their own jobs, the government should only be investing in infrastructure and areas where more help is needed like the DWP. They should not be bailing private companies out, and in my view should have even considered letting the banks go to the wall. The whole economic system has clearly failed. No private company should be allowed where it is too big to fail - it is exploitative, monopolistic and risk free, anti free market. If its too big to fail it should be nationalised. I'd also like to see a lot more building societies, government bonds funding essential large project which encourage people to save, and co-ops. Also a ban on political lobbying by large companies and a compulsory charge to fund political parties of your choice. Any nationalised companies should have their board publically elected.
As a citizen and tax payer, I object to continuous funding of this ponzi scheme for the rich.
As a citizen and tax payer, I object to continuous funding of this ponzi scheme for the rich.
Techniquest
Veteran Member
So we should be expected to like all of the TOCs, irrespective of opinions and experiences?
No, that would not be acceptable. Imagine such a scene on the forum:
Thread: Favourite TOC
Creator: O L Leigh*
Text: Just thought I'd ask what everyone's favourite TOC is, I like NXEA because their 317s are really fun to travel in*
First reply (let's say it's from Metroland):
Yeah I really like NXEA too and agree with what you said
Next few replies from other members then being exactly the same.
Point I'm making here is that if it was like that, it would be extremely boring and we'd be exactly like sheep.
* = O L Leigh and Metroland, I'm not picking on you with this post, your names came to mind first bizarrely. Not picking on the 317s or owt either, as I've mentioned elsewhere they're good units, just it was the first thing to came to mind.
I don't like NXEC or for that matter NXEA, same for a good few TOCs. I've had bad experiences with nearly every TOC in the country but NXEC are the worst in my eyes and would happily prefer to see them stick to coach operation (which they seem reasonable at) and let someone else run the EC and EA operations. Don't ask me who, I don't care so long as they're a decent company who know what they're doing, do it well and treat their passengers properly.
90019
Established Member
Theres a difference between not liking and wishing for the demise of a company. Thing is, though, if what you wanted came true and NX pulled out of the East Coast franchise becauseof their losses, who else would run it? I somewhat doubt any of the other companies with other franchises would be very willing to take over if NX were making huge losses from it.
So, would you rather NXEC or noEC?
I think not liking a TOC and actively wanting it to fail, with all job losses or the ramifications for the industry is a different thing. I'm not actually a huge fan of national express either, but in the real world if they hand all their franchises back it will have massive implications for the industry, especially for a cash strapped government.
No. But you should certainly want the company to do well in their job, to improve performance and customer service. It's not fair to say that you want them to surrender their franchise, at the same time losing NXEA and C2C. AIUI, C2C are one of the most punctual and popular commuter services in the London area; I rarely hear complaints. And NXEA are also doing quite well, although they have made a few unpopular decisions.
Try to look at the bigger picture; getting rid of NXEC may improve the route as you say. It may also:
- Make the service poorer; what if a worse company took over? Certainly the uncertainty can't be good in the short term.
- Reduce staff morale (potentially) and actually see a decrease in customer service
- Remove two other good rail companies and put them into a similarly bleak situation
It is therefore, in my opinion, that the best option for the ECML is simply to improve the service from NXEC, thus we not only improve the service there, we ensure a good service is maintained, and perhaps improved, on the other TOCs.
And all that needs is an emphasis on good customer service (which, from what I've seen and heard, is a minority of staff!) and perhaps a rethink of the fares system.
***
I think this is a very unfair statement to make. I've personally never had a problem with staff on NXEC or GNER, and I'm sure I'm not the only one. This is a huge generalisation which is, in my opinion, unfair to some of the great staff on the trains. I know it's probably a few people bringing down the whole lot which is unfair, but I still disagree with your statement.
Again, it's unfair to use this as a reason to dislike a company. As a passenger, the colour of the train is of no real difference to me. As an enthusiast, yes I take an interest, and it's nice to have nice trains (such as the Scotrail livery reflecting our national identity, the mellow purples of Northern and the dynamic Virgin livery are examples that appeal to me personally) but overall I will not dislike a company because of their livery, and I'm sure most people out there feel the same.
For what it's worth, I think it's a good livery but it requires regular carriage washing, and therein lies a small problem, but otherwise I quite like it.
Again, a very personal view. I, do like the Mallard interiors because they're very spacious, bright and airy inside. And lots of people don't like the old sets which, whilst "classic" and comfortable, let's face it, are a bit tatty. Now, I would have preferred simply to redo the old HST moquette on trains, but brighten it up a bit so your mixing the best parts of Mallard and traditional, but I can't say that I'm too disappointed with the results.
I do agree, however, that the East Coast route is overpriced. You only have to look at Glasgow-London and Edinburgh-London tickets to see that. The GLC-LON fares for an Off Peak Return is extremely similar to the price for EDB-LON Super Off Peak Return. It's amazing that there is such a big difference in validity, considering the stations are a similar distance from London! And when it comes to Newcastle and York fares from Scotland, I have to wonder if they're having a laugh sometimes.
Techniquest
Veteran Member
A fair point, I don't specifically recall wishing for the whole company to go out of business, just that I would rather someone else took control. Mind, then that would be bound to be Arriva...
WillPS
Established Member
I would love that to be the case. I know nationalisation is considered taboo - but it makes a lot more sense economically and logistically than the current system we have!
Wouldn't make a lot of difference, the DfT are in control who ever the operator of the franchise is.
John_158
Member
- Joined
- 10 Dec 2008
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- 354
Wonder if it will Become Easy Train as it seems to be the only form of transport that they are not involved in as yet.
Flyboy
Member
I doubt it, I think the rail industry is too heavily regulated for Easy to be able to reduce costs in the areas they usually do, and I for one am very glad that's the case.
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