Porterbrook moans about new franchises ordering new trains

[B&I]

It’s a pity ROSCO profits couldn’t be directed towards a few electrification schemes. 323s would be ideal for something like the Snow Hill lines or Cardiff valleys.

Bang on. But our current railway structure is completely inimical to that kind of joined-up thinking

 

[js1000]

Sorry, but the nonsense posted on this thread basically comes down to profit = bad, they’re big bad nasty capitalists etc etc. That is just a total cliche. The reality is very different.

I don’t disagree that the structure of the industry is flawed, but the concept of leasing trains is not inherently wrong. If it was, why is there a growing industry in Europe doing just that?

I never said profit was bad! I'm not Jeremy Corbyn!

Just don't cry a tear for the ROSCOs when they have a 20% profit margin, a very handsome profit margin. Most TOCs are scraping along 2-4% yet they bear the brunt of the criticism.

I don't believe in railway re-nationalisation, although there is certainly scope for more vertical integration through public bodies and investment. The DfT actively becoming a leasing company as they have done in recent years is a step in the right direction and will help to reduce leasing costs through greater competition.

As the poster says above, in an ideal world, the ROSCOs could use some of the profits to put towards electrification schemes and prolong their rolling stock. Electrification to Oxenholme is about £20 million? Instead they're spending millions on a project to strap diesels to a 30 year electric unit and crossing their fingers!

But again the lack of vertical integration and long term thinking doesn't allow that as the management of our railways is so fragmented and based upon an era where no one wanted to use or own the railways.

 

[northwichcat]

Have you ever asked yourself why an extremely profitable business has been allowed to grow up, beginning by exploiting public assets, and still dependent on piblic sector spending to keep it going, when the simpler and cheaper alternative would be for the public sector to own the trains ?

Short term gain. It's common under Conservative governments for something publicly owned to be sold off to raise money, the question is what will the Conservatives do when they run out of things to sell off. I think it was Vince Cable who recently said on the failure of VTEC we can't keep bringing the failing bits in to the public sector and leaving the successful bits in the private sector.

 

[Bletchleyite]

In some respects, there is an analogy with rents for high street shops. Property owners are reluctant to reduce shop rents, because some accountancy procedure imply that this reduces the nominal "value" of that property company. So, some of them are prepared to receive zero income from empty shops, rather than reduce rents to level that shopping companies can afford to pay.

I must admit that when I not so longer ago did an OU module on business studies I was quite taken aback as to how utterly bizarre the practices of company accounting are. I genuinely can't understand why they aren't required to use simple cash accounting like individuals and charities do, i.e. what you have is what you have, not what you might theoretically have in future.

 

[mushroomchow]

I can kind of empathise with Porterbrook in the sense that there's a balance to be struck between wholesale fleet replacements and keeping refurbished (and perfectly reliable / capable) older classes in service, not least as others have mentioned because of the potential hit to the taxpayer of reduced stock lifecycles. If, hypothetically, you drew a line and replaced every existing class of unit and loco right now with new models, what happens if 10 years down the line a number of those trains, ordered at great expense, turn out to be less reliable than their predecessors and are withdrawn? It would be far more of a political scandal than the numerous early withdrawals during the modernisation programme in the late 60s and early 70s.

That being said, Porterbrook have hardly covered themselves in glory with the joint debacles of the 769 and Mk. 3 upgrade projects. It's hard to take seriously complaints about TOCs turning elsewhere for work when two of your major projects - the ones that should back your argument for high-quality refurbishments as opposed to new stock - are chronically behind-schedule and not truly proven as a viable concept.

 

[squizzler]

Bang on. But our current railway structure is completely inimical to that kind of joined-up thinking

If you draw the organisational "structure" it on paper it would be. But the railway does not exist in a legalistic / financial space of the organisational diagram, it works in the real world. There is the court of public opinion and there are those who have nothing to do with the railway but have invested their own money such as commuters who brought houses on commuting routes and big scale property developers, there are passenger organisations as well as the "industry" itself. This is why I prefer to call "The Railway" an ecosystem rather than merely an industry or an infrastructure. AS with any other ecosystem changes can be a long time in reaching a tipping point, but then suddenly occur very quickly.

Articles in the newspapers is not part of our diagram of the "current railway structure" but does indicate even the Rosco's are starting to think its time for some "joined up thinking". A consensus to work together seems to be spreading at long last. When it occurs, the tipping point to a more rational balance between rolling stock supply and demand might happen very quickly.

 

[Confused52]

Have you ever asked yourself why an extremely profitable business has been allowed to grow up, beginning by exploiting public assets, and still dependent on piblic sector spending to keep it going, when the simpler and cheaper alternative would be for the public sector to own the trains ?

And there was me thinking it was to allow the railway to get capital without having to compete with other public sector lenders such as the NHS for funding, because the same institutions and services always get the cash and everything else gets starved in order to minimise the Public Sector Borrowing requirement. It was why Post Office Telecommunications got privatised all those years ago because the NHS wanted hospital building and the Post Office wanted new exchanges, the NHS always won. That was what started privatisation. When the amount borrowed by government goes up too high the price needed to be paid on new debt goes up and then taxes have to follow to pay the interest on the new debt, recession follows. There is nothing new in this apart from the markets thinking the UK is a better bet for repayment than most at the moment. Brexit and or Corbyn will see that view disappear quite rapidly.

 

[43096]

That being said, Porterbrook have hardly covered themselves in glory with the joint debacles of the 769 and Mk. 3 upgrade projects. It's hard to take seriously complaints about TOCs turning elsewhere for work when two of your major projects - the ones that should back your argument for high-quality refurbishments as opposed to new stock - are chronically behind-schedule and not truly proven as a viable concept.

Which Mark 3 upgrade projects are you referring to?

 

[pdeaves]

Which Mark 3 upgrade projects are you referring to?

Power doors, I suspect. I'm not 100% certain, though.

 

[bramling]

Bang on. But our current railway structure is completely inimical to that kind of joined-up thinking

Sadly that’s exactly reality.

It is a ridiculous setup though - an industry which requires subsidy yet has a setup which inherently syphons off massive amounts of profit based on leasing assets which in many cases were paid for by the taxpayer and date back potentially 30+ years.

I think there’s certainly some truth in the notion that the large passenger growth was possibly not expected - although saying that there are few fleets which have been scrapped before their design life since privatisation, with the exception of some slam-door fleets.

Without complete standardisation there’s never going to be competition - it’s not like cars where people can just shop around, choose what they’re going to get, jump in and go. We’re still not really seeing standardisation, and probably never will as train design is manufacturer led. BR tried it with the Networkers and look how that turned out!

 

[DavidGrain]

To say that a leasing company should use its profits to fund electrification scheme is the basic error of confusing revenue with capital. They could use their cash not their profits to fund electrification schemes. That is called PFI. Oh sorry that has become a dirty word now especially with that big uncompleted hospital in Smethwick that the government has had to step in to finance after the Carillion debacle.

 

[LOL The Irony]

This at the end of the day is only fair since the DfT and the ROSCO's have taken the operators for a ride and they're only returning the favour. Remind me again how late the FLEX project already is...

 

[43096]

Power doors, I suspect. I'm not 100% certain, though.

It’s an Angel lead project, not Porterbrook. Angel own the IPR - Porterbrook’s only involvement is financing 26 vehicles, out of over 200 conversions.

 

[43096]

It is a ridiculous setup though - an industry which requires subsidy yet has a setup which inherently syphons off massive amounts of profit based on leasing assets which in many cases were paid for by the taxpayer and date back potentially 30+ years.

That old chestnut. You are getting cash and capital assets (and the way they are accounted for) confused. It also ignores upgrades done since that are funded by the ROSCOs with the cost recovered via the leasing charge.

 

[61653 HTAFC]

This at the end of the day is only fair since the DfT and the ROSCO's have taken the operators for a ride and they're only returning the favour. Remind me again how late the FLEX project already is...

"Late" might be the wrong word there, as it suggests that at some point in the future it will actually arrive...

The way all ROSCOs have behaved with charges for legacy rolling stock has been appalling frankly. Gifted to them at privatisation for nominal fees, the leasing charges should have reflected this. It's almost as if the whole parlour trick was designed to turn "evil, inefficient public subsidy" into "healthy private profit" by sleight-of-hand.

Even the way fleets were split at privatisation seems like it was deliberately trying to make life difficult for the operation of the railway. At times the ROSCOs have appeared willing to innovate... but the 153s, rubbish as they are, were split between two different owners, rendering any plan to upgrade and "re-merge" them into useful 2-car units for rural lines was never going to work- as a result we'll be losing 70 vehicles which need to be replaced, or we'll have a handful of single cars restricted to only working with other units.

 

[Bletchleyite]

I see your point about 153s, but surely each ROSCO owns enough to be able to make 2-car units out of them if they saw that as viable? It's not like they have to reunite the original pairs.

 

[northwichcat]

I see your point about 153s, but surely each ROSCO owns enough to be able to make 2-car units out of them if they saw that as viable? It's not like they have to reunite the original pairs.

Also both ROSCOs have 156s so the option of using 153s as centre cars is there, even if it may result in a new class number due to 153s not being cleared for all routes which 156s are cleared for.

 

[bramling]

That old chestnut. You are getting cash and capital assets (and the way they are accounted for) confused. It also ignores upgrades done since that are funded by the ROSCOs with the cost recovered via the leasing charge.

Upgrades which in many cases have been minimal.

From a passenger point of view, something like a 317/1 is pretty identical to how it was in the 1980s. The only real visible upgrade I can think of is CCTV, and a PIS which seldom seems to work properly.

 

[edwin_m]

The split of stock between the ROSCOs was primarily to try to bring some competition to the market by ensuring different owners of similar classes that an operator might see as alternatives for a particular service. This might have worked had the railways been in a gradual decline as the government tended to think, when services might have been thinned out and stock stock freed up. However cost control at BR meant there were no spare trains, increasing passenger numbers then exacerbated this, and little new stock was ordered in the early years. The Mk1 units all went fairly quickly in the early 2000s, but couldn't be offered as bargain-basement competition because the reason for their withdrawal was legislation preventing their further use.

So it may be said that for the first time the rolling stock market is operating as the Major goverment intended! And nobody seems to like it much...

 

[Northhighland]

Absolutely right, the majority of commenters are very careless with other peoples money! The depreciation period for Porterbrook is stated as 20-35 years so if they are asked to shorten the depreciation period during the lifetime of the assets they will have to take cuts in the shareholders returns. This doesn't seem to bother the majority of people on here but if they have pensions they should care because the shareholders are effectively pension funds, that is Joe Public.

It is simply not sustainable to scrap stock that is not life expired. No industry can do that without costs having to rise significantly. I would maybe accept an argument for that if it were that the new trains being entered into service provided such an improvement in passenger service that passengers would pay these increased costs. But pay extra for an 802 over an HST? A 385 over a 365? I wouldn't pay extra for either.

The model is broke, needs fixed. Needs some innovative thought on what would replace the current model of ownership. We seem to be harking for a halcyon days of the big four, GWR is back, so is LNER and Southern as trading names, people forgot why we nationalised.

We need to get a system that works for passengers, ultimately I don't care who owns it just want a decent train a seat every time and it running on time.

 

[Bornin1980s]

Look, all the trains going spare are electrics. It's diesels we are running short of, especially with the pacers condemned. Had Porterbrook made a large, speculative order of new DMUs, they would have no trouble finding customers.

 

[bramling]

Look, all the trains going spare are electrics. It's diesels we are running short of, especially with the pacers condemned. Had Porterbrook made a large, speculative order of new DMUs, they would have no trouble finding customers.

Exactly. Somewhere along the line the process has gone badly wrong. We have a surplus of electrics, almost certainly still not enough diesels, unpopular and unreliable Pacers still going long after their design life, new fleets up for replacement before they’ve even entered service, fleets being retractioned for a few years, and the accessibility deadline struggling to be achieved despite being known for many many years. Something somewhere really isn’t working, if the model is now doing what it was intended to do then it’s a seriously flawed model.

 

[jyte]

Look, all the trains going spare are electrics. It's diesels we are running short of, especially with the pacers condemned. Had Porterbrook made a large, speculative order of new DMUs, they would have no trouble finding customers.

Yeah I have to agree with this apprasial of the situation. It seems that ROSCOs were banking on long term electrification that's proving slow to materialise....

The solution is either to string up some wires (hey, maybe the ROSCOs could chip in?) or buy some diesels. the latter of which is quite politically problematic as a future government may say 'no' to diesel-only traction earlier than the current aim of 2040 (I personally would agree with such a decision). A diesel only train ordered now may only have a 20 year service life, and if they bring that sunset date forward only 5 years, it starts to become uncertain and almost risky for a ROSCO to be ordering diesel traction.

 

[northwichcat]

Exactly. Somewhere along the line the process has gone badly wrong. We have a surplus of electrics, almost certainly still not enough diesels, unpopular and unreliable Pacers still going long after their design life, new fleets up for replacement before they’ve even entered service, fleets being retractioned for a few years, and the accessibility deadline struggling to be achieved despite being known for many many years. Something somewhere really isn’t working, if the model is now doing what it was intended to do then it’s a seriously flawed model.

I think the EMU problem started with Thameslink, while there were reasons for ordering new trains somewhere to cascade the current trains to was an afterthought and even then there weren't many options and then DfT authorised an order of more Electrostars just so the 319s could be released to Northern despite the Thameslink project delays. Contrast that with the class 172 order and TOCs were fighting over the released units and there was no doubt every 150 released would remain in use, even the older and less standard 150/0s and the two mismatched 150/2 cars where there wouldn't have been any issue if they had been scrapped, if a slightly larger 172 order had been placed I doubt it would have made any difference to the 150s all remaining in service.

 

[northwichcat]

Yeah I have to agree with this apprasial of the situation. It seems that ROSCOs were banking on long term electrification that's proving slow to materialise....

Not just the ROSCOs. Bombardier had effectively decided there's no future in the UK DMU market and when Arriva issued an ITT for new self-powered and EMUs for Northern Bombardier offered an EMU but didn't bother with a self-powered option - the choice was CAF or Stadler.

 

[northwichcat]

The solution is either to string up some wires (hey, maybe the ROSCOs could chip in?) or buy some diesels. the latter of which is quite politically problematic as a future government may say 'no' to diesel-only traction earlier than the current aim of 2040 (I personally would agree with such a decision). A diesel only train ordered now may only have a 20 year service life, and if they bring that sunset date forward only 5 years, it starts to become uncertain and almost risky for a ROSCO to be ordering diesel traction.

That sounds like a recipe for Pacer mark II

 

[jyte]

That sounds like a recipe for Pacer mark II

You're right that it's worrying. If a ROSCO thinks they're only going to get 10-15 years of revenue service from a new train, it's not exactly going to be a rolls is it...

 

[Bletchleyite]

That sounds like a recipe for Pacer mark II

Isn't the Class 230 basically that, just using second hand bodies and (thank goodness) bogies? Block the middle two doors up like LNR are doing and you have got something of a very similar size with a very similar layout.

Of course there are two other answers to the problem.

One of them is the Mk5a coach as TPE have ordered - use a D-lok now, switch to an alternative technology locomotive (or just an electric one) later.

The other is to build a more modular unit. This could either be by building a bi-mode with the diesel generation equipment and fuel tanks on removable rafts which could be swapped later for some other form of generation or batteries, or you could build a MU that will run on any modular, removable power source that simply supplies a rotating shaft of specified speed, torque and control system which again can be swapped for something else later. (Of course this, like many South East third rail EMUs, would have mountings and the low roof for a pantograph if that was what they should be converted to later).

Stadler of course already offer this kind of product - a bi-mode with a generation unit in the middle which can be converted to an EMU on-depot (one assumes) by just taking the generation unit out.

Or IOW just because it's a DMU now doesn't mean it can't be something else later if the design is sensible.

 

[jyte]

Isn't the Class 230 basically that, just using second hand bodies and (thank goodness) bogies? Block the middle two doors up like LNR are doing and you have got something of a very similar size with a very similar layout.

Speaking of the 230, weren't they talking of a 230 with a pantograph?!

 

[Bletchleyite]

Speaking of the 230, weren't they talking of a 230 with a pantograph?!

It's been talked about, but I'd see batteries as more likely. There isn't much call for a unit that can run at only 60mph under the wires, particularly with a load of perfectly good if old EMUs about to get scrapped and thus having negligible financial value.