National Express Group to give up franchises??

[Tom B]

The RMT also objects to the profits taken by private companies for what is essentially little risk - most of the TOCs (which the exception of one or two like Chiltern) are not very entrepreneurial and are really just management contracts - expensive ones at that.

This is very true - we get companies making a small fortune, but most of the changes are either small tweaks or are part of some contract, "partnership" or so on.

As for public ownership, as someone said I can't imagine rail staff being happy to accept public sector pay rates!

 

[FusionRail]

The irony of your statement is that under private companies it's far more likely that the 'nice people who come along clipping your tickets' actually get a bonus than they would under state control.

Most major PLCs also offer various employee share schemes, so the chances are most staff are able to invest in the company they work for as well on a tax free basis.

Pretty useful for Network Rail staff - we dont have shareholders..

Too right we get a bonus!

You really do chat a load of crap.

 

[Metroland]

As for public ownership, as someone said I can't imagine rail staff being happy to accept public sector pay rates!

Yes railway workers have done very well out of privatisation. In the early 90s the basic pay form a mech box signalmen was £115-130 a week with enhanced rates, station staff were about the same, drivers and power box signalmen were £200 a week. In other words, the vast majority of staff were on not much above the minimum wage now and a living wage was made up by working vast amounts of overtime 70-100 hours per week not exceptional. Not much for an anti-social job, with a lot of responsibility, and 6 months - 1 years worth of training, with plenty ongoing.

Higher pay rates were needed because, especially in the London area, the railways just could not get staff.

 

[paul1609]

The RMT are a bit of an anachronism, most railway workers are not avid socialists, but they are still strong because of safety risks of doing the job and have a long and proud history of defending terms and conditions - not always to the benefit of the rail industry as it does not work in isolation within transport! Other modes are notorious for anti-union practices, especially road haulage where much of the workforce has been and is recruited from the forces - whose mentality has always been against popular organisation of workers against their 'superiors'.

.

Hmm, I've been in the forces for 17 years but I dont know anybody who's left to join the road haulage industry, I suspect the salary levels are just too low for most people these days, on the other hand I do know lots of people who have gone on to work in the rail industry and its pretty obvious to me that many rail companies are targeting leavers from Royal Navy and have done for many years.

 

[Metroland]

Its mostly from the army they go to trucking industry as some obtain HGV licences there. In recent years the railway has tried to recruit from the forces as do the airlines. Some of the skills are very transferable.

Wages in truck driving were quite high until recent years, the average now for C+E license is £26k per year, tanker drivers are on £40k or more.

 

[Lee_Again]

From a very well informed source (don't ask); watch the news this week regarding NX and ALL its businesses.

 

[me123]

I've moved this here as there's no need to start a new thread.

 

[Pumbaa]

From a very well informed source (don't ask); watch the news this week regarding NX and ALL its businesses.

I'm liking the sound of this... All it's businesses? Or all it's rail businesses?

 

[Metroland]

Going to be an interesting week next week then. Rumoured to be a lot of walk outs, possibly the biggest industrial unrest since the 70s and NX do something major.

I also hear the Labour party are bust.

 

[Pumbaa]

Going to be an interesting week next week then. Rumoured to be a lot of walk outs, possibly the biggest industrial unrest since the 70s and NX do something major.

I also hear the Labour party are bust.

You hear correctly. I'm waiting up all night Monday for the ft to be updated, and then for the rest of the week!

Thatcherism making a comeback? I wasn't here during the Thatcher years, so seeing a faithful recreation is a bonus to me

 

[DavyCrocket]

Pretty useful for Network Rail staff - we dont have shareholders..

Too right we get a bonus!

You really do chat a load of crap.

Same at LUL.

Pay is also very very good!

 

[O L Leigh]

Thatcherism was never very good for the railways. Why would you be pleased to see it make a comeback...?

Likewise, why are people salivating at the thought of NX giving up it's rail operations? Are you expecting a return to the same standard of service you got from GNER in their heyday? If so, who is going to pay for that? The economic realities are no laughing matter. If NX does decide to pull the plug, whoever takes over in the short to medium term is going to have to run a no-frills service for a time because they are going to be subject to exactly the same financial restrictions as everyone else.

O L Leigh

 

[Pumbaa]

Thatcherism was never very good for the railways. Why would you be pleased to see it make a comeback...?

I was referring to the mass walk-outs by all industries of all shapes and sizes.

Likewise, why are people salivating at the thought of NX giving up it's rail operations? Are you expecting a return to the same standard of service you got from GNER in their heyday? If so, who is going to pay for that? The economic realities are no laughing matter. If NX does decide to pull the plug, whoever takes over in the short to medium term is going to have to run a no-frills service for a time because they are going to be subject to exactly the same financial restrictions as everyone else.

I'm salivating at the thought of making a hefty amount of money from this. To me, the principle operations of the group are irrelevant, as are the public benefits and costs. The private benefits however are of more interest to me, and it is in my interest at current that NX disappeared

 

[Metroland]

Well I'm certainly not salivating, its going to be a disaster.

I don't normally make predictions but I'll guarantee we won't be seeing a return to Thatcherism - lots of credit and sell off, small state, little or no regulation. It seems to me most of the companies have been bought by foreigners in the Thatcher sell off who are now holding us to ransom.

 

[O L Leigh]

I'm salivating at the thought of making a hefty amount of money from this.

Ah. Private avarice.

And there was me thinking that you were talking as a rail enthusiast. Silly me.

O L Leigh

 

[90019]

Those who want NX out:
If NX pull out, who exactly do you propose will run the franchise?
Do you think other opeartors will want it if NX can't run it?
As O L Leigh says, this is far from a good thing, those of you who hate NX and want them out, I suppose you're quite happy for service standards to drop because you dislike a company?
And the ones who want them out because of the livery; you'd honestly be happier with worse service on a train because the livery's nicer?

Honestly, some of you have got your priorities seriously screwed up, and if you think NX giving up the franchise is a good thing, you either don't ever use them, you don't understand what the consequences are, or there's something wrong with you.

 

[O L Leigh]

I've said before that I'm no apologist for NX and that's something I stand by. However, it is unfortunate that discussion of NX performance has coincided with the current financial downturn which I think has done them no favours.

For me this isn't about whether or not NX continue in the rail business. I'd like to think that they will because the competition is healthy and the lack of a big player like NX tendering for franchises (irrespective of the outcome) is likely to be worse for passengers in the long run. The rail industry can't afford to lose a large company like NX.

What does disappoint me a bit is how few people seem to appreciate this. I respect and can understand (at least up to a point) that different people have views on each franchisee based on their own prejudices and experiences. However, at this trying time I would have hoped that rail enthusiasts would have been rallying around the various TOC's in an attempt to keep the industry as a whole afloat rather than baying for blood. If NX really is the first to throw in the towel you can be assured that there will be others who follow. At this particular time when the financial burden on the taxpayer is already becoming a cause for scandal and outrage, can we really afford to be burdened further by having to prop up yet another ailing industry that already takes enough of our money in business...?

Think and believe what you like about NX, but please can we have a little perspective in this discussion...?

O L Leigh

 

[BOSCH]

I'm salivating at the thought of making a hefty amount of money from this. To me, the principle operations of the group are irrelevant, as are the public benefits and costs. The private benefits however are of more interest to me, and it is in my interest at current that NX disappeared

You sir are a LEECH,in this current financial turmoil you seek to make personal gain,disgusting !!! To paraphrase OL LEIGH,"Heres me thinking you were an enthusiast,silly me" !!!! makstaylor = Tory Boy !!!

 

[Pumbaa]

You sir are a LEECH,in this current financial turmoil you seek to make personal gain,disgusting !!! To paraphrase OL LEIGH,"Heres me thinking you were an enthusiast,silly me" !!!! makstaylor = Tory Boy !!!

Sadly not - true Labourite, but with a hefty mortgage to pay off, and a good hand at gambling. Couple that with a degree in Economics and accruing a few pretty pennies along the way, it becomes an attractive and viable prospect at the expense of professional bankers who make it their full-time job to make money this way. Plus, I've lost my own company, been made redundant since a few times, and am now opting to go back to university to retrain and enter a more sustainable market.

I wasn't going to post again, my bed was a more attractive option, but perhaps I'd better...
--- old post above --- --- new post below ---

Ah. Private avarice.

And there was me thinking that you were talking as a rail enthusiast. Silly me.

O L Leigh

As a rail enthusiast, and from a political point of view, it's going to be a devastating blow. Confidence knocks aren't needed now of all times. However, it may also act as a warning klaxon to the government that the current system simply isn't sustainable. As I've said before, I see rationalisation as an option that I believe could work. I would also like to believe that DfT can see this, but I highly doubt this.

I don't normally make predictions but I'll guarantee we won't be seeing a return to Thatcherism - lots of credit and sell off, small state, little or no regulation. It seems to me most of the companies have been bought by foreigners in the Thatcher sell off who are now holding us to ransom.

Thankfully that'll be a good thing. I was born towards the end of Thatcherism, and by the time I arrived in the UK it was the Blair years. Little regulation - if I'm honest we have over-regulation now, especially energy industries, which will be interesting as we have already seen this week. Moving towards an energy crisis, it's interesting to see the "private firms" are held at point by Govt bodies and offices, and they in turn are held at gunpoint by EU competition laws and regulations, which creates something of a stalemate, with little incentive to invest or prepare for the future, and certainly a myopic outlook.

I digress - the point of this post was to counterpoint criticism. From an even stronger rail enthusiast view, it certainly seems a shame. NXEC did a good job at stimulating growth with their advertising campaigns, and although staff may feel let down by them, it will be sad to see them leave. From what I can ascertain, they did a good job with c2c, and a good job with NXEA. I hope this serves as perspective enough gentlemen.

 

[O L Leigh]

Thanks for the clarification. Sometimes more words helps to outline a position better than a short, glib reply.

O L Leigh

 

[Pumbaa]

Thanks for the clarification. Sometimes more words helps to outline a position better than a short, glib reply.

O L Leigh

No problem - I thought it would turn a few heads and perhaps I'd better edit it as I pressed "post". Stupid me. Anyway, clarification was no problem, more than happy to do so.

 

[yorkie]

I do wonder if there was too much competition for the ECML franchise, which created a situation where firms bid to unrealistic levels, promising the Government insane amounts of money to the point where it the question is: at what point will they collapse? If you look at the premium profile it was obvious that they were never going to be able to pay the massive payments years down the line. The losers here are passengers because the over-biddign TOCs can only raise such huge sums by raising fares astronomically

There are far, far more seats available now on NXEC services than there were in GNER days. Gone are the days of the 2030 on Saturdays (the last train back) being wedged with almost all seats reserved, and gone are the days when alighting at York you'd see a mob of people from Newcastle all having had an evening in York waiting to go back home. Now you can get a table to yourself very easily. That train must have less than half the patronage it had before, if not less.

 

[Metroland]

I'm not entirely sure speculation is helpful, especially when the rest of the economy is in severe trouble. Let's be clear, passenger numbers have not fallen, but they [The TOC's] are expecting 'flat' numbers for the next two years. It seems to be therefore, there problem is the franchise system rather than the franchises themselves. These are normal business cycles and this needs to be built in.

National Express said it did not comment on market speculation.

"We will update the market on February 26 as normal and we don't have any reason to update the market before that time," said the company.

http://www.ft.com/cms/s/0/0f971bb8-f0c9-11dd-972c-0000779fd2ac.html

So sorry, no news this week, its just speculation and clearly some people trying to make a buck at it.

 

[Flyboy]

....its just speculation and clearly some people trying to make a buck at it.

Clearly so, especially now short-selling is no longer prohibited. I wish they'd wind their necks in.

If NXEC did experience serious problems the Government would, without a shadow of doubt, be open to renegotiation. They've been telling banks and building societies in no uncertain terms that they should show flexibility and compassion to homeowners who are struggling to pay their mortgages, so they're not likely to 'evict' NXEC because they're struggling with the 'mortgage' !

However, I note that National Express said it did not comment on market speculation, and good on them too!

 

[Failed Unit]

Clearly so, especially now short-selling is no longer prohibited. I wish they'd wind their necks in.

it is back now but that is just a minor detail

If NXEC did experience serious problems the Government would, without a shadow of doubt, be open to renegotiation. They've been telling banks and building societies in no uncertain terms that they should show flexibility and compassion to homeowners who are struggling to pay their mortgages, so they're not likely to 'evict' NXEC because they're struggling with the 'mortgage' !

It is a bit different as that will tell companys overbid to win then if you get your sums wrong then just renegotiate a year later. I am sure if they renegotiate then legal challenges from losing bidders like virgin would could claim that thier bid was viable in the current climate.

I won't repeat my previous posts in thier entirety but I still don't see what value the current franchise system brings to us the taxpayer, National Express, First Group etc make large amounts of profits at the expense of the taxpayer at no risk to themselves and that is it! IF national express had back or renegotiate that will just reinforce my viewpoint. When Connex South Eastern were stripped of the franchise, it didn't turn into a black hole to the taxpayer. IF any holder threw in the towel as long as we didn't relet the franchise the taxpayer would be on a winner.

Remember BR also went through many recessions without major cutbacks, yes some orders were scaled back (Networkers at 10cars rather than 12) but it wasn't the doomsday that some predict. Orders were placed for new rolling stock during a recession, the HST's were built through one, again BR didn't get as many as they wanted but they were placed. Electrification also happened in the 90's recession along with new stations! The 365 order was placed in a recession to keep BREL York open (yes an election gimmick which would be illegal under EU law now) but it did happen.

On the East Coast a route I use a lot, the service has declined a lot, but I am not niave enough to believe that GNER wouldn't have made cutbacks if they were in charge, or Virgin would have been any better. National Express have made mistakes such as replacing the mugs with ones with a very narrow base which have a habit of falling over! (I know trivial but still a waste) But at least they haven't wasted money such as replacing all the uniforms when the existing ones still serve a purpose. Mass relivering also isn't happening, hopefully sets will be done when they need it.

I don't think National Express will give up the franchises personally, but I won't shed a tear either if they do (as long as they are not relet again). I would be more annoyed if it is renegiated, as this happened with CT and the passengers saw no improvement but National Express' profits increased which was an insult to use users!

Digressing a bit, I have never understood why people thought having Virgin running both East and West coast would be such a bad thing on competition grounds. People from Newcastle, York and Leeds would still have very little choice. Rail only has 20% of the Scotland - London market anyway so what benefit is fighting over this when the real "enermy" is BA, BMI and Easyjet!

 

[Metroland]

Several misunderstands there: Rail has a smaller amount these days on the London-Scotland market, but only 4% of the business on the ECML is London to Scotland and its similar on the WCML. People think of these lines are principally London to Scotland - they are not. They are extensive mixed user trunk main lines with may cross feeds, local traffic and freight with many intermediate stations.

Although I agree that competition from other forms of transport is actually more important.

Next the TOCs are not a drain to the tax payer in general, they were supposed to be a net contributor in a couple of years. The whole point is these companies are having to pay *contributions* to the taxpayer to a set scale, which, because of the downturn they have difficulty in meeting.

NR gets a substantial slice for the tax payer, but this is because it bought Railtrack from shareholders using government backed loans which accrue interest - much to do with the political climate at the time. Nevertheless some people might be quite surprised just how low Network rails charges are:

http://www.networkrail.co.uk/browse...ndix 2 variable usage charges (passenger).pdf

http://www.networkrail.co.uk/browse...pendix 3 variable usage charges (freight).pdf

 

[Flyboy]

Good point well made. I fully accept that overbidding with the intent of renegotiating later when (not IF) things start going awry is unacceptable and must not be allowed to become a 'usual' practice, but we are in a very unique situation at the moment so a certain amount of leniency should be shown.

I don't go along in any way with the analysts' points of view that rail is going to be as severely affected as they predict. Rail companies could, with some intelligent marketing, gain from the current economic climate by capturing and keeping those who currently fly. The choice to go by rail would initially be an economic one for the pax, but the rail companies need to capitalise and keep them from going back to flying when the economy improves.

As Failed Unit points out, the airlines are the enemies, not other rail companies.

 

[Metroland]

Well it's airlines - but there is only really significant competition on London-Scotland, or to an extent South coast to Scotland. There is the odd cross country flow, but were talking about a couple of small planes carrying less than 2 coaches worth of passengers. This market is so small, its hardly worth worrying about and the rail companies probably gain from passengers travelling to/from airports. I'll hazard a guess, the air traffic effect on rail is relatively neutral.

Coach can be a competitor, but again, the only really significant flow is London-Oxford.

Buses can compete on branch lines and in cities, but its quite limited and again, there are cases where buses feed rail.

Rails main competitor is the car - although congestion helps it on urban flows, and the biggest of all competitor - trucks.

 

[Failed Unit]

Several misunderstands there: Rail has a smaller amount these days on the London-Scotland market, but only 4% of the business on the ECML is London to Scotland and its similar on the WCML. People think of these lines are principally London to Scotland - they are not. They are extensive mixed user trunk main lines with may cross feeds, local traffic and freight with many intermediate stations.

True large flows from Newcastle / York for example, but does the passenger really gain much when you have a train at x:00 to London that stops at both these places and one at 0:05 to XC places. Even the AP fares are about the same. There is a lot of air-traffic to eat into, they just need a superior product to air - not to be trying to lower rails product to match it!

Although I agree that competition from other forms of transport is actually more important.

The private car I should say on the majority of journeys

Next the TOCs are not a drain to the tax payer in general, they were supposed to be a net contributor in a couple of years. The whole point is these companies are having to pay *contributions* to the taxpayer to a set scale, which, because of the downturn they have difficulty in meeting.

True, but they are taking massive profits as well as I showed in my example on my earlier post. If the railways were in the public sector then we are taking a layer out and the profit that layer made also goes into the public purse.

Remember in the 1980's boom Inter-City made a profit, Network South East made a profit, Regional Railways to my knowledge never has (and its routes probably never will). Even during the recession Inter-City wasn't doing badly. If you add up the profits that First Group, National Express, Stagecoach, Go-Ahead etc make out of rail the taxpayer could quite easily have reduced the public purse requirement the railways needed. Remember even including inflation the railways cost us much more than they did under BR, maybe the fault of the system but still a scary fact that should be corrected!

 

[Metroland]

A few things are overplayed with air. The Leeds service is now virtually non-existent as is the Tees-valley. Newcastle, gets a run for its money, nevertheless the trains hold up well against it, the only place were rail has lost to air on network is London - Glasgow and Edinburgh, plus Aberdeen - but there is signs that is reversing. Virgin killed London-Liverpool flights, and Manchester-London is on a downward trend and the great majority of those passengers are transit passengers vis London Heathrow. Ryan air, for all its bad press, hardly competes at all. Stansted-Prestwick possibly, but its hardly competitive and Prestwick airport is in a lot of trouble anyway.

Going onto profit: perhaps unit costs are too high, but remember BR spent years running down everything, not painting stations and selling off land. I agree with railways should get back to basics on some matters of cost control, but you have to remember with the DfT writing timetables with all the rules and regulations (and rightly so to provide a public service) plus the need to serve off peak and rural services you aren't going to make a profit in a pure sense therefore some state involvement is needed. At least these days, before the advent of large trucks and government funded motorways 80% of revenue came from freight, which was used to cross subsidise may branch and off peak services.

As I keep saying private companies are not going to become involved without a profit motive or at least state guarantees - because otherwise they can't fund it - IE get financial backings from banks/shareholders. We can moan about the TOCs stripping off profits (which are actually quite modest) but the only other alternative is nationalisation. And if anyone remembers that, it was about reducing services, paying staff the minimum. BR got generally good towards the end of its life, but was hardly what could be described as entrepreneurial. It was threatening to close lines like the Settle - Carlisle in 1989, which is now a big success. And ECML main lines services were essentially hourly to Leeds and Newcastle/Edinburgh. Plus the odd extra service, and that was that.

I would like to see the railways get better and reduce costs, but I believe this will be through good management and innovation rather than having civil servants running it sat in BR HQ. There is an argument for nationalisation, but I fear treasury mandarins will look to cut costs (as it appears on their balance sheet) and divert funds to things they consider more important - especially as traditionally in this country people believe all transport should be profit making, unlike say on the European continent (who seem to understand the importance and benefits of infrastructure and joined up planning, rather then competition for the sake of it) and we have rather generous social security provision and health service benefits.