Stagecoach calls for vertical integration

[Pumbaa]

http://www.ft.com/cms/s/0/94fe4a6a-1be8-11df-a5e1-00144feab49a.html

One of Britain’s biggest rail operators has called on the government to give train companies more control so they can improve reliabilty.

Brian Souter, chief executive of Stagecoach said further improvements to punctuality and reliability were dependent on Lord Adonis, transport minister, giving train operators more responsibility for tracks and other infrastructure currently in the hands of Network Rail.

Lord Adonis recently published plans to overhaul rail contracts, including the introduction of longer 22-year deals between train operators and the government. But the idea of “vertical integration” of the railways has been sidelined.

Mr Souter said that longer franchises were welcome but unlikely to provide a solution to failures in the rail network. “There’s a lot of motherhood and apple pie in the talk of longer franchises,” said Mr Souter. “We would prefer an integrated model where operators have control of the tracks. What’s needed is a couple of pilot schemes.”

 

[First class]

When Merseyrail seriously suggested this, Network Rail staff basically said they would be going on strike if this happened...

 

[jopsuk]

I think vertical integration would be great... for the primary passenger operator of a route. I don't see it working well when you mix in freight and other operators (such as Cross Country) who'll have less influence over long term infrastructure needs and desires.

For all its flaws, Network Rail makes sense as a concept (and it's the same sort of system that the rest of Europe are using to split operations and infrastructure)

 

[gordonthemoron]

due to EU regulations, I doubt that vertical integration would be allowed

 

[Aictos]

I think the best place to pilot such a scheme is Scotland,

 

[Old Timer]

due to EU regulations, I doubt that vertical integration would be allowed

Its done in France so why not here.

The Railway Industry in the UK is not going to improve until we have vertical integration and the sooner the better.

Network Rail has been a complete failure, and if you want proof of that you only have to look at how its structured with man-marking, second-guessing and micro-managemnt of their Infrastructure Contractors, pointless Project Management organisations such as I&I which achieves and delivers nothing except to increase it size exponentionally in comparison to the work actually "managed", most of which is "managed" by people with absolutely no construction or engineering experience whatsoever.

A quick read through the various RAIB reports will quickly illustrate what is wrong with NR, yet at the same time as it is recruiting more and more senior managers and others without any real experience, it is reducing its maintenance staff and taking maintenance hoilidays in order to provide higher returns to Darling, so that Brown can continue on his manic spending spree :roll::roll::roll:

Vertical integration would actually be quite simple, but is something that could never happen under Labour as the Railways are seen simply as a "cash Cow" by the Treasury (which has the benefit of not needing additional Revenue & Customs staff to collect) rather than a service.

The Railways in this Country ran very well when the Government had no involvement in their day to day control and investment strategy.

 

[thefab444]

The Railways in this Country ran very well when the Government had no involvement in their day to day control and investment strategy.

Indeed, the way I see it, integration is required. Either back to British Railways, but try to incorporate some of the efficiency of the private sector without the asset stripping/sweating element. Ideally, the railways should be run not-for-profit, so that any money that is made can be reinvested, rather than spirited away by the Treasury - though the chances of this happening are low. Alternatively, everything could be sold off to private companies with completely minimal government intervention to a number of regional companies owning the tracks, stations and leasing/owning (whichever they deem most viable) the trains. This would be fine, but expect to see drastic fare increases, minimal investment (unless a 100% secure business case can be made) and general run-down of the system. There would then be a crash due to constant cutting of maintence standards, and everyone would be up in arms about private companies cutting corners etc. The majority of the so-called investment by the current bunch of private companies has actually been funded or under-written by the government anyway!

It depends whether the railways should be run as a public service or a private enterprise. Personally, I believe they are a service, so should be run by the state, I know that you will have different views Old Timer. Your lot will be in next but I don't think they'll make any drastic changes to the franchise system though, indeed, I don't think there's the political will for any kind of change.

 

[Capybara]

Well, if it's a choice between giving my money to Brian Souter or Gordon Brown, Gordon Brown gets it every time.

 

[jopsuk]

France is vertically integrated in practice, but in theory there's a government owned company called "Network Rail" (yes, really) that owns the track- they're little more than a shell, and subcontract everything to SNCF. It's an elegant dodge of the EU legislation requiring seperation of tracks and trains.

Take the West Coast mainline. Who'd be responsible for that? You've got at least two companies provding passenger services at every point along it. Would London Midland, Northern, Transpenine Express and Scotrail really be that happy if the major descions about the running of the line were taken by Virgin?

In France, other than cross border and freight, there is SNCF. They run, or have a hand in running, High Speed, Intercity, Suburban and Local services.

I can only see vertical integration being anything other than a disaster in this country if we have something along the lines of SNCF running the services.

The problems with Network Rail are management based, not concept based. The concept, if we must have the current passenger franchise system, is good.

 

[Old Timer]

Alternatively, everything could be sold off to private companies with completely minimal government intervention to a number of regional companies owning the tracks, stations and leasing/owning (whichever they deem most viable) the trains. This would be fine, but expect to see drastic fare increases, minimal investment (unless a 100% secure business case can be made) and general run-down of the system. There would then be a crash due to constant cutting of maintence standards, and everyone would be up in arms about private companies cutting corners etc. The majority of the so-called investment by the current bunch of private companies has actually been funded or under-written by the government anyway!.

To suggest that private companies would run down the railways is so simplistic an argument as not to stand up to even the most cursory scrutiny, and suggests an unwillingness to understand or accept the basic principles of business.

Businesses exist to make money, running a business down does the opposite, and is actually illegal under Company Law, which requires Directors to run a business in the interests of its shareholders. In a lot of cases these shareholders are actually the pension funds which are working to secure your pension, and lets not forget also that the Trade Unions are quite happy to invest in the Stockmarket as well despie their protestations, indeed those who should the loudest about Capitalism have some of the largest investments !

As I said previously the Railways have actually been under private ownership for several times longer than public, and indeed there never was any public investment in them. Even when the Government brouight the railway system to its knees during and after the second wolrd war, the true costs of repairing the railway infrastructure was never given to the Big Four.

Privatisation of the airline Industry means that even the lowest paid person can now travel not only to Europe but world-wide, something that was beyond the aspiration of most working people in the 70s.

There would be nothing to prevent other train operators trains from running over the Infrastructure operated by the Infrastructure/ train operator.

A lot of the current inefficiencies, and financial waste would be cut if the TOCs actually contracted directly with the Infrastructure Contractors to undertake maintenance and renewals work, and whole tranches or organisations that exist solely to move theoretical financial losses and gains between TOCs and NR could be wiped out at a stroke.

I actually welcome very much the proposal by Brian Souter and would like to see it implemented. It would certainly be interesting to see a comparison between the state of his Railway now and after it was under his control.

Finally it is never a good thing to assume one knows my Political persuasions. I have my own beliefs the totality of which are not mirrored in any one Party however life experience tells me that levelling the field the Socialist way has never produced any improvements long term, and after 12 years of it here, I would have thought that the results are obvious.


If you want to see maintenance run downs just take a walk down to your local station and take a ride. Otherwise ask the various Maintenance guys on here, and they will tell you what is happening.

RAIB reports are also an absolute gold mine of examples of the falling dominoes, however having been responsible for creating the monster, the Trade Unions are now emasculated by Political bias and expediaency and are happy to let NR rape and pillage the conditions of their members without let or hindrance.

 

[gordonthemoron]

the track in Belgium is owned by Infrabel, in germany by DB Netz

 

[yorksrob]

As somebody who believes in lateral as well as vertical integration, I don't think privatisation as a concept is inherantly wrong or impossible. As old timer states, the railways were built and run privately for a long time. I think the problem lies with the fact that our railway network currently costs more to run and maintain than it can hope to generate in profit, and barring some large shift in the economics of the thing, it will do so for the forseeable future, which to me seems to be the crucial difference between it and the successful privatisations of the telephone network and BA. Personally I believe the privatisation of the Royal Mail will run into trouble for the same reasons as the railway.

 

[gordonthemoron]

successful privatisation of BA

how much longer can BA afford to keep losing money?

 

[thefab444]

To suggest that private companies would run down the railways is so simplistic an argument as not to stand up to even the most cursory scrutiny, and suggests an unwillingness to understand or accept the basic principles of business.

So why is it happening now then? Are the private companies afraid to invest purely because they don't own the trackwork? Selling the track at a bargain basement price will suddenly open up huge private investment? I think the problem with lack of actual private investment is partly down to the restrictive franchising though. But, as you say, private companies have to make a profit. If one of the ways of doing this is running down the infrastructure then they will do this, especially if investment isn't deemed viable. Remember the motto of the private sector? Short term gain, long term pain! (Okay I made that up). A totally free-from-government private railway would probably end up looking very much like the Serpell Report Option A! So you'd have to have some kind of regulation to ensure that unprofitable but socially important services are retained.

However, you make a good point about the companies being run privately for a long time very successfully, and I agree there. Going back to a system along the lines of the Big Four (I believe John Major favoured this idea when the privatisation process was being considered) would probably be the best way forward for privatisation. But ideally you'd need independent British companies running them, people with the knowledge, expertise and who are genuinely proud and care about their company, rather than Stagecoach London North Eastern, First Great Western, Arriva London Midland & Scottish and Go Ahead Southern etc.

life experience tells me that levelling the field the Socialist way has never produced any improvements long term, and after 12 years of it here, I would have thought that the results are obvious.

Huh? Socialism?! Where?!

 

[gordonthemoron]

anyone who thinks New Labour is socialist must be American

 

[Helvellyn]

Are the private companies afraid to invest purely because they don't own the trackwork?

It's a bit hard to invest where you want when the DfT micromanages your franchise for you! If you look at Chiltern Railways, who got a 20 year franchise fom the SRA, we have seen major infrastructure investment. Stagecoach was provisionally offered a 20 year SWT franchise at the turn of the century and was going to rebuild Clapham Junction from scratch as part of that - because over a 20 year franchise it could get the investment back.

Many people forget that prior to Privatisation BR actually became vertically integrated, with the Sectors taking on responsibility for their infrastructure. The West and East Coast Mainlines came under InterCity, despite Trainload Freight, NSE and Regional Railways all operating on them. It could be quite easily done again given that the Sectors managed their businesses as sub-sectors, the majority of which formed the basis for the original TOCs at Privatisation.

Network Rail could still own the infrastructure, but the TOC (as part of its franchise) could assume responsibility for maintenance, upgrades, etc.

Here's a thought for people too. I've little time for Michael O'Leary and Ryanair, who make Sir Richard Branson and Virgin Atlantic seem shy and modest! Yet despite his ruthless drive to cut frills and costs, Michael O'Leary has always, and repeatedly, stated he will never skimp on safety and maintenance. In part that's because if you have a bad safety reputation, or poorly maintained planes, it will hurt your business. I think the TOCs would act the same way. I'm not claiming Network Rail are unsafe, but I'm saying there is certainly no reason a vertically integrated TOC would start cutting things out.

 

[ivanhoe]

.

The Railways in this Country ran very well when the Government had no involvement in their day to day control and investment strategy.

When was this then ? Late 1880's ?

 

[mumrar]

Just as an aside, and I realise it contributes nothing to the debate, but vertical integration. I hate how we use such bollocks terms to explain common sense things. This kind of management speak is nothing but a smokescreen thrown up to give an air of self-importance and to appear busy. When I read the words, I honestly thought it was something to do with interchange stations such as Tamworth or Smethwick G Bridge, but encompassing other forms of public transport too. When I see the 'cut and shut and sticky tape' employed by Central Trains and latterly London Midland at Tyseley, it makes me shudder to think of broken fishplatess hekd together by yellow Tyso tape!

 

[tbtc]

Sounds great in theory.

The trouble is when you get:

1. A TOC doing the bare minimum to get by

2. A TOC coming up to the last year or so of a franchise (with little incentive to invest)

3. An operator like Cross Country being sidelined because the dominant operarator is going to arange improvements/ engineering etc to suit their own situation, rather than the good of the railway.

For example, take the southern WCML upgrades (Milton Keynes etc). Virgin had one agenda, Silverlink had another. If one of them "owned" the tracks they'd build to suit themselves and not the railway overall. It'd still need to be carefully managed.

Give another example, the Doncater - Scunthorpe line was closed last summer, as that suited the freight companies the best (which provide much of the traffic on that stretch). If Northern or Transpennine owned the tracks, they'd have litle incentive to schedule engineering for the summer (when they could take holidaymakers to sunny Cleethorpes with their buckets and spades), but this was probably best for the railway over all.

 

[Old Timer]

When was this then ? Late 1880's ?

Showing rather a large lack of historical knowledge there, chap ?

Sounds great in theory.

The trouble is when you get:

1. A TOC doing the bare minimum to get by

2. A TOC coming up to the last year or so of a franchise (with little incentive to invest)

3. An operator like Cross Country being sidelined because the dominant operarator is going to arange improvements/ engineering etc to suit their own situation, rather than the good of the railway.

For example, take the southern WCML upgrades (Milton Keynes etc). Virgin had one agenda, Silverlink had another. If one of them "owned" the tracks they'd build to suit themselves and not the railway overall. It'd still need to be carefully managed.

Give another example, the Doncater - Scunthorpe line was closed last summer, as that suited the freight companies the best (which provide much of the traffic on that stretch). If Northern or Transpennine owned the tracks, they'd have litle incentive to schedule engineering for the summer (when they could take holidaymakers to sunny Cleethorpes with their buckets and spades), but this was probably best for the railway over all.

Properly constructed Franchise arrangements would see to that and in any case it would not be a case of what you propose. The infrastructure arm of the Operator would have to maintain the track to a specified standard, and engineering judgement would be the guiding light.

Remember that Network Rail, has, of itself, brought no innovations to the table. Everything that they now have was developed/ordered.bought by the Infrastructure Maintenance Contractors prior to the Contracts being reneged unilaterally.

Even the much lauded NMT is simply an extension of GTRMs plans, the wiring trains were Balfour Beatty's, high output track renewals was Jarvis's, and remember that Jarvis were laying in pretty much largely complete S&C units 10 years ago, and developed plug couplers that allowed point motors to be unplugged without the need for complex signalling testing afterwards.

Jarvis led the way with many innovations on maintenance which are now being attempted by NR, and Jarvis had a state of the art control centre in York from where all its Maintenance and Renewals activities were overseen.

It simply is such a tired argument to suggest that private input will reduce service. It ignores examples of what could happen, take GNER for example who had the best customer service in the UK, AND made money without high fraes. Contrast GNER with Virgin after 10 years of protection from competition.

GNER wanted vertical integration and had they managed to get it then I have no doubt there would have been big differences now. For example they were looking at extending electrification, and upgrading track and signalling.

As for the miux between different operators and freight/passenger one need only to look to the US to see how it can operate.

World wide emerging Countries have franchised out their railway systems to private operators over extended periods without problems.

Take South America for example, in 2008 America Latina Logistica which operates in Brazil and Argentina spent R$800m (£300m) on track improvements alone, and last year invested a considerable sum in new rolling stock. MRS Logistica has and is doing similar.

The new HS railway between Sao Paulo and Rio will be built entirely using private money and operated completely independently of the Brazillian Government.

Planned as well as Metro systems under construction in Chile, Brazil, Colombia, and Argentina are surging forward.


Within the UK privatisation in the NHS for example is widespread and even today it is likely that Hinchinbrook hospital will be let out to a private company because the NHS is bust, and this by a Labour Government who opposed such things in Opposition :roll::roll::roll:

 

[Lampshade]

Well, if it's a choice between giving my money to Brian Souter or Gordon Brown, Gordon Brown gets it every time.

100% agree, and then some, with added agreement

 

[thefab444]

GNER wanted vertical integration and had they managed to get it then I have no doubt there would have been big differences now. For example they were looking at extending electrification, and upgrading track and signalling.

All the franchises "talked big" though, new stations, double decker trains etc. There's been very little 'radical' development in the form of rolling stock with perhaps the exception of 390/395 units.

 

[Old Timer]

Yes but I do personally happen to know that GNER were quite advanced in their plans, and following on from retaining the franchise they were determined to push forward with them.

I (again personally) have no doubt that this was not well received as GNER was never a favourite of Bliar, and what happened subsequently to the franchise was a typically cynical and Politically motivated act of "revenge" against someone who was never popular with No. 10.

GNER was the only franchise that really worked well, and there is no doubt as I said before that the ECML would have looked much different to what it does today. The sad fact is that vertical integration is anathema to the current Government (as it was the previous) as it would in many ways reduce the revenue stream into the Treasury.

It is that which is the reason that we still have a mode of Privatisation which has clearly failed but which was being constantly brought back to life, a bit like Frankenstein's monster. Indeed the comparison is apt because despite two franchies having failed, this was ignored and now in due course I expect that the chances are better than evens that the whole rotten edifice will collapse in on itself as the recession bites.

 

[royaloak]

All the franchises "talked big" though, new stations, double decker trains etc. There's been very little 'radical' development in the form of rolling stock with perhaps the exception of 390/395 units.

Because the TOCs are not allowed any say in the trains they are allocated, it is all done by DaFT.

 

[mrcheek]

It is that which is the reason that we still have a mode of Privatisation which has clearly failed but which was being constantly brought back to life, a bit like Frankenstein's monster. Indeed the comparison is apt because despite two franchies having failed, this was ignored and now in due course I expect that the chances are better than evens that the whole rotten edifice will collapse in on itself as the recession bites.

I think the problem was that on previous privatisations, such as water, gas, telecoms etc, the government set up watchdogs to keep an eye on things, and these bodies make minor changes wherever possible to help competition (such as ordering BT to cut line access costs, and regular tinkering with the rules for customers switching utility suppliers to make them better).

With rail privatisation, there was a change of government before anybody could really see the effects, and Labour seem to have alternated between trying to dictate exactly what the companies have to do, taking away their freedom to make commercial decisions, to ignoring serious problems altogether so that they can blame them on the Tories.

 

[Bellwater]

On a similar topic, i noticed this on the SWT Website. is this common or Unique to them, Depots having their own P-way teams?

http://www.southwesttrains.co.uk/job-search.aspx

Track Care Gang (P-Way) MB2
Reference number SWT01513
Region London
Location Clapham Junction
Contact Fleet

Main Purpose
- The holder of this post is responsible for Service, maintenance and repair of the London end Fleet depots' track, infrastructure and boundaries to specifications laid down by SWT and Network Rail.
- You will adhere to depot protection, safety, quality and environmental procedures, rules and regulations in force.


Principal Accountabilites
- Inspection, maintenance and repair of sidings, boundaries and infrastructure under the responsibility of the Fleet Manager.
- Record all work carried out on prescribed documentation and sign off for all work done.
- Obtain material from stores to enable completion of the task and ensure that planned works are suitably documented to allow for material ordering.
- Advise the Depot Manager of any difficulties encountered and additional rectification work that is required.
- Report to the Depot Manager conditions that are beyond the resource of competency of the team.
- Arrange isolation of conductor rails and possession of sidings as laid down in local depot isolation instructions.
- Ensure tools, jacks and other specialised equipment are returned for servicing and testing at the specified intervals. This is especially important for insulated tools.
- Ensure all work is carried out safely as defined in specifications and procedures.
- Obtain, use and care for and return all tools and equipment used.
- Advise Depot Manager of any problems or defects identified and work arising from the issues.
- Work effectively as part of a team.


Safety Responsibilities
- Ensure your personal safety and that of others at all times.
- Comply with all safety systems and responsibilities at all times.
- Develop a pro-active approach to safety issues.
- Report any accidents, assaults or near miss occurrences in accordance with local reporting procedures.
- Report any safety irregularities, faults or unusual occurrences in the prescribed manner.
- Ensure all relevant PPE for tasks/activities is worn at all times and in accordance with local safety instructions/risk assessments.
- Participate in all staff briefings to ensure you are informed of all relevant information.
- Examine all safety procedures, notices, publications and instructions.


Additional Activities
- Additional tasks as specified by local manager/supervisor.
- Principal accountabilities may differ from depot to depot and you will be required to sign the job description acknowledgement sheet.


Remuneration
- £22,669

Shift Pattern
- Monday to Friday 0730 - 1500 hours

Minimum Requirements
- Successful completion of Patrolman course and associated P-Way Courses.
- Trained and competent in Personal Track Safety, Look out and COSS Duties.
- Demonstrate ability to work on own initiative.
- Thorough knowledge of depot operating procedures and local safety instructions.
- Knowledge of environmental regulations and their practical applications.
- Good communication skills both oral and written.
- DC Electrified Lines
- Must hold current driving licence

 

[Old Timer]

Until now, depot maintenance has been carried out by the smaller labour suppliers, although Amec Spie did have some Depot Contracts on the Southern which they kept on after Maintenance was taken in-house.

SWT is the first to go down this route which of course ties in with what was said by Souter earlier.

 

[tbtc]

Properly constructed Franchise arrangements would see to that and in any case it would not be a case of what you propose. The infrastructure arm of the Operator would have to maintain the track to a specified standard, and engineering judgement would be the guiding light

I wish I could share your faith.

For every good TOC there's been a poor one, and I'm not sure I'd have trusted someone like Northern Spirit to maintain tracks (regardless of the expected levels of engineering etc required). Call me a cynic...

 

[142094]

I remember a time when PTEs had "vertical integration" or something along the lines of it, when buses were regulated and in sync with the Metro and heavy rail - until deregulation came along and BR privatised.

I have heard many times that privatisation brings benefits to customers due to more competition and lower prices. All I can see from using buses and trains for the last 20 years is hardly any competition between companies on the same mode of transport and higher prices every January.

 

[yorksrob]

As for the miux between different operators and freight/passenger one need only to look to the US to see how it can operate.

World wide emerging Countries have franchised out their railway systems to private operators over extended periods without problems.:

I don't know much about the emerging countries, but certainly regarding the US, doesn't this economic model rely on the various companies having to support a far less dense network and far lower frequencies of passenger services in comparison to density of population than we would find acceptable?