Stagecoach calls for vertical integration

[Old Timer]

True to a large degree but even expedited freight is put out of the way of the Amtrak trains, and you can get some interesting parallel running with the Amtrak on Main 1 overhauling an expedited on Main 2 !

The principal remains the same however, and is no different to how other Companies operate when one is providing a support service to another.

As for the various different types of TOC, well vertical integration would probably end up in a JV between an operating Company and an Infrastructure Company a bit like Chiltern was.

Track standards would be mandated by a separate organisation like in the US, and compliance monitored by audit. Despite the various views on here, the sorts of attitudes displayed by the old "Dark, Satanic, Mill Owners" of the North of England went long ago and these days the Major Infrastructure Contractors acknowledge that their strength comes from their staff and reward them accordingly. That is the difference between working for a major Infrastructure Contractor and Network Rail, and why no-one wants to work for NR. I have far superior terms and conditions to those of my equivalents (insofar as that can be said) within NR. I also have no worries about refusing to do something I consider unsafe or unprofessional, as do my staff, as we know that the Company Ethos supports us. Indeed if we did not follow this, we would find ourselves in a lot of hot water, so we can tell bullying client managers to go forth and multiply without fear.

The point of this is simply to demonstrate that a lot of attitudes displayed really do come from a complete lack of knowledge of how large Companies operate, and are more attuned to Political bias than actuality.

 

[Helvellyn]

When was this then ? Late 1880's ?

Yeah, because what did the Big Four ever achieve? :roll:


Where privatisation went wrong was the massive fragmentation of the industry. Previous privatisations saw companies privatised as an entity. The railways were dismantled - hugely - and then spun off. It was rushed to get it all through by 1997. Then at the turn of the Century when Labour had an opportunity to reshape the industry they forced the collapse of Railtrack and then decided not to let the SRA (which they created) allow longer franchises with the promised investment. Now we have franchises as cash cows, which is conveniently forgotten when people sometimes talk about the profits the owning companies make.

East Coast, East Anglia and Essex Thamesside provide an opportunity to reshape the franchises again if someone wants to grab that opportunity.

 

[yorksrob]

Where privatisation went wrong was the massive fragmentation of the industry. Previous privatisations saw companies privatised as an entity.

But that's the knub of the problem. I don't think they could have privatised it in one entity as it wouldn't have been profitable. True, they could have sold it off and still paid the government grant to it, but the public would soon have been asking "why is this company paying out dividends to shareholders when it is still taking a subsidy from the taxpayer". Even worse, it might have come to be seen in the same light as some of the propped up industries of the seventies (for example British Leyland) rather than a vital public service which would surely have led to Beeching Mk 2.

At least the way it was done, you can privatise the profitable bits. But this means that the taxpayer is left picking up the tab for the rest - which of course you can also privatise - but only if you give large sweeteners.

 

[jopsuk]

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.

With veritcal integration, I'd have thought GNER would have only got London-Leeds, London - Edinburgh and possibly Edinburgh - Carstairs to look after. North of Edinburgh, the Hull branch and the other minor off-shoots the EC franchise services EC are most definitely not the primary operator- Scotrail would be the sensible franchise for north of Edinburgh, and Northern for the Hull line and Leeds-York. So where would GNER have been electrifying?

 

[Old Timer]

anyone who thinks New Labour is socialist must be American

From the official Labour Party website

Labour’s purpose is fairness: fair rules, fair chances and a fair say for everyone.

In 1995 we set out our values in Clause IV of the Labour Party’s constitution:

‘The Labour Party is a democratic socialist party. It believes that by the strength of our common endeavour we achieve more than we achieve alone, so as to create for each of us the means to realise our true potential and for all of us a community in which power, wealth and opportunity are in the hands of the many, not the few.’

New Labour and The Labour Party are one and the same.

....... So where would GNER have been electrifying?

Doncaster - Selby - Leeds to give them an alternative to Wakefield.

There was also a thought about Lincoln, but that was all at that stage.

With regards to the existing Infrastructure GNER was looking at modifications to the OHL as well as S&C renewals, and having an involvement in remodelling Hitchin.

This was all very high level conceptual talk which took place with Infrastructure representatives about 10 years ago and excluded Railtrack involvement at the time.

 

[gordonthemoron]

Labour don't seem very socialist to me, in fact they are too scared of the tabloids to implement any socialist policies

 

[Helvellyn]

I don't think they could have privatised it in one entity as it wouldn't have been profitable.

Maybe not, but they didn't have to create so many companies either. Trainload Freight was split into three regional companies, whilst Freightliner was split off from Railfreight Distribution. Four of those companies then ended up in the hands of EWS! Would have been simpler to sell off Trainload Freight and RfD.

InterCity could have been privatised, perhaps with Anglia, Gatwick Express and the Charter Unit split off. Anglia could have gone to NSE, Gatwick Express to either NSE or made a HEX style operation.

Franchises could have been used for NSE/Regional Railways, but much larger than the TOCs, e.g. 'Southern', 'Thames & Chiltern', 'Great Eastern' and a combo of Thameslink and the NSE routes from Euston/King's Cross.

It was fragmentation all over. BREL was sold off as an entity in the 1980s, but BRML was sold off site by site.

Even the ROSCOs, in my view, were badly set up with the assets allocated by who operated them at the time rather than say placing all Class 156s with one company, all 158s with another, etc. If InterCity had been privatised it could have received its own assets as part of that, leaving the ROSCOs to own the stock of the franchised operators.

As to Open Access, well a privatised InterCity could have been guaranteed a monopoly for a fixed period of time and then other companies could have been allowed to come in as the market was opened up, as happened with other privatisations.

 

[tbtc]

GNER talked a good game about a lot of things. Their "2020 vision" pamphlet sounded fantastic. However, the reality was that they failed to actually deliver on most of their ideas, so I can't judge them fairly

 

[A0]

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.

But the problem again comes back to the Government in the form of the Dft - they're specifying the rolling stock, what gets ordered and who it gets allocated to.

The franchises need the independence to do this.

 

[thefab444]

Surely, the franchises could go out on a limb and procure/order stock themselves? FGW did this with HST power cars. But I guess the private companies will only invest if the risk is insured by the government?

 

[Old Timer]

Labour don't seem very socialist to me, in fact they are too scared of the tabloids to implement any socialist policies

Tax and spend is very Socialist, as is being thrown out of officehaving totally screwed the economy.

 

[Helvellyn]

Surely, the franchises could go out on a limb and procure/order stock themselves? FGW did this with HST power cars. But I guess the private companies will only invest if the risk is insured by the government?

They simply aren't allowed to do this now! DfT set the strategy, the stock allocations, etc. As I recall DfT weren't happy that First Group went and bought some HST sets, because if the franchise was taken away First could also take away those HST sets, thus affecting the amount of available stock for anyone who took on Greater Western.

 

[Mojo]

It would be very difficult to do this, as the DfT effectively underwrites any deals between TOCs and the Roscos. Of course an organisation such as FirstGroup/Stagecoach/etc could buy the trains if someone was willing to sell (as opposed to lease) rolling stock but this could cause a number of problems such as what happens if a franchise changes hands and of course many companies would be reluctant to invest in this manner where there will be no return on their investment.

 

[yorksrob]

As to Open Access, well a privatised InterCity could have been guaranteed a monopoly for a fixed period of time and then other companies could have been allowed to come in as the market was opened up, as happened with other privatisations.

I must admit, even as somebody who disagrees with the concept of rail privatisation in general, it has to be said that open access has done an excellent job of opening up new markets. Even if the railways were run as a largely single entity (as I believe they should be) I think maybe a limited amount of open access should be allowed for flows not well served by existing services. True, this might overlap some of the existing express flows and eat into the Inter-City sectors profits (to be used to fund the railway as a whole), but as long as this isn't too great it might be worth the main network taking the hit for the potential of re-generating some outlaying areas.

Absolutely agreed though - whichever way you look at it, the system is now far too fragmented.

 

[tbtc]

It would be very difficult to do this, as the DfT effectively underwrites any deals between TOCs and the Roscos. Of course an organisation such as FirstGroup/Stagecoach/etc could buy the trains if someone was willing to sell (as opposed to lease) rolling stock but this could cause a number of problems such as what happens if a franchise changes hands and of course many companies would be reluctant to invest in this manner where there will be no return on their investment.

...it would also put First/ Stagecoach in a very strong bargaining position if they ordered a few 172 (or similar) - it'd be a lot lot cheaper to buy them outright than lease them over a (say) twenty year 'lifetime'.

If First/ Stagecoach know they'll be running one diesel franchise or another over the next decade, they'd be saving money to buy up front (spreading the cost over the full period for the sake of accounting etc)

As long as the train is certified safe (hence buying a follow on order of an existing type) surely DFT can't stop this?
--- old post above --- --- new post below ---

I must admit, even as somebody who disagrees with the concept of rail privatisation in general, it has to be said that open access has done an excellent job of opening up new markets

I think to most members of the public, open access has had a pretty trivial effect.

It gets talked about a lot amongst enthusiasts (partly for the variety, partly for the novelty of a new link and partly for the love of the "Underdog" - even though Hull Trains and WMSR are both mainly owned by companies at least as big as the main TOC they were competing with).

Open access operators are fairly trivial in the grand scheme of things

 

[yorksrob]

...--- old post above --- --- new post below ---


I think to most members of the public, open access has had a pretty trivial effect.

It gets talked about a lot amongst enthusiasts (partly for the variety, partly for the novelty of a new link and partly for the love of the "Underdog" - even though Hull Trains and WMSR are both mainly owned by companies at least as big as the main TOC they were competing with).

Open access operators are fairly trivial in the grand scheme of things

Well, maybe from a railway point of view. But I suspect they provide a substantial boost to civic self esteem in those areas which were formerly neglected.

 

[Helvellyn]

If First/ Stagecoach know they'll be running one diesel franchise or another over the next decade, they'd be saving money to buy up front (spreading the cost over the full period for the sake of accounting etc).

National Express could have done that at the turn of the century, when they had the most franchises out of anyone. Now there is a very real chance that in a couple of years they will be completely out of the rail business! The current system has too much uncertainty for the owning companies to decide they want to invest in their own new build rolling stock.

 

[thefab444]

Tax and spend is very Socialist.

It really depends on who you tax.

 

[moggie]

Remember BR sectorisation. I do. Yes it was lots of luverly bright red benches and lamp posts with multicoloured stripy trains - wonderful. No doubt the public loved it - mmmmm. But a far as I'm concerned what I saw was spot renewals where double ended points were renewed at one end only thus creating a nightmare mix of old and new technology. Redundant wiring left in situ where changes were made to save money (and no it wasn't because of brittle wiring - the functional bits were still altered quire happily).

The touble with vertical intergration is that TOC's wan't to and should run trains - if they did that well I might be persuaded - perhaps. They do not want to dig up track, fiddle around with the signalling or whatever else us Infrasructure Enginners routinely do. It stops the operating side running trains - it's an irritant and it costs money from the income ledger - it doesn't add to the profit - it spends it - and the managments big bonus pots and share divi's. Therefore imho TOC's won't want to spend money on infrastructure if they they think they can avoid it - any more than the BR sectors did. OK so they may want a few glossy upgrades if it ties in with big new improvements to the service. But here again TOC's will be an uninformed buyer. Do we think they'll want offices full of infrastructure engineering types providing a design to last for years - I doubt it. Will there be well manned gangs of blokes on the ground with time to do the job well and without risk - I'm not convinced. They'll do the work OK but at what price and in what manner - cheap and nasty - if it works that'll do. Remember in a privatised vertical organistation Infrasructure Engineers wil be well down the food chain. Doesn't bare thinking about. Sorry but Brian S in charge of West Coast - no thankyou. NR nay be bad but I fear it could get worse - much worse. Only my opinion of course - but remember we're British. We lost the plot on common sense years ago - bloody good on ignorance though!

 

[jon0844]

If National Express had bought its rolling stock, what would have stopped them selling it on to another TOC if they lost all of their franchises? Indeed, what would stop them from leasing them out themselves?

Is there legislation that would prevent either of these things happening? I suspect the leasing option would be restricted, but selling them on? Depending on the price, they might easily end up quids in on what they've saved by not leasing beforehand.

 

[gregh]

Tax and spend is very Socialist, as is being thrown out of office having totally screwed the economy.

Which the Tories have never done, of course!!

 

[Drsatan]

If National Express had bought its rolling stock, what would have stopped them selling it on to another TOC if they lost all of their franchises? Indeed, what would stop them from leasing them out themselves?

Is there legislation that would prevent either of these things happening?

Franchise specifications specify what trains have to be used, and how many new trains can be leased. So, if National Express had bought its rolling stock and lost all of its franchises, it would have had trouble selling them on to another TOC since due to short franchise lengths it wouldn't be economically viable for another TOC to buy rolling stock.

TOCs can't swap rolling stock easily either. A few years ago MML ordered several 9-car Meridians to operate London-Sheffield-Leeds services, but the SRA wouldn't let them. And neither could MML hand back a few HSTs to the ROSCO since the franchise specification probably wouldn't allow that.

 

[Old Timer]

It really depends on who you tax.

Indeed it does. Sadly for those on the lowest incomes, marginal taxation is now at 98%, and the gap between the highest and lowest earners has considerably widenend unde Labour in the last 12 years.

There was also the withdrawal of the 10% tax rate, whilst Labour in power have done absolutely nothing to close the "offshore" tax avoidance schemes that Brown promised would be absolutely shut down as soon as he was in No. 11. Of course that did not happen but bearing in mind the fact that pretty much all of Labour's donors and financiers are domiciled overeseas for tax avoidance reasons, one should not be surprised.

Interestingly Lord Paul who bankrolled Brown's leadership campaign and who now promises to fund Labour's election using money denied to former British Steel workers (he caused a £14m black hole to appear in their pension fund) is another don Dom.

The Mirror of course has been very silent on the treatment of the steel workers pension fund. Maybe it is a sensitive subject after Maxwell, or maybe its an embarrasing and inconvenient Political truth but why let truth and integrity spoil the Leftist ideal ? Someone pass the sickbag ?


Strange bedfellows Labour has these days isn't it.....or is it ?

Which the Tories have never done, of course!!

Errr, they laid the foundations for the economiuc growth which Labour has destroyed, having had to rescue the UK from oversight by the IMF in 1979, something which could well happen yet again.

Please could you tell me which outgoing Labour Government has ever bequeathed an economy in good shape ???

 

[ralphchadkirk]

OT - Did you see Question Time last Thursday night? It raised some very good question about the Labour and Tories economy, as well as the British Steel fiasco.

 

[Old Timer]

OT - Did you see Question Time last Thursday night? It raised some very good question about the Labour and Tories economy, as well as the British Steel fiasco.

Sorry, old boy. No did see.

Anyway I am off out to dinner, followed by a large helping of Amstel bier !

 

[ralphchadkirk]

Pity, it was rather a good one.

Have fun with the beer - is it the lager, light or the 1870?

 

[yorksrob]

Errr, they laid the foundations for the economiuc growth which Labour has destroyed, having had to rescue the UK from oversight by the IMF in 1979, something which could well happen yet again.

Please could you tell me which outgoing Labour Government has ever bequeathed an economy in good shape ???

'
Personally I don't think any of them are any good - as far as I'm concerned whoever gets in, the establishment always wins. But, Old Timer can you honestly say that the last conservative government (for those younger than us - 79 to 97) was in any way good for the railway? Or at least worst than the current lot? As far as I'm concerned, I wouldn't trust the Tories with the railway as far as I could throw them.

 

[Old Timer]

'
Personally I don't think any of them are any good - as far as I'm concerned whoever gets in, the establishment always wins. But, Old Timer can you honestly say that the last conservative government (for those younger than us - 79 to 97) was in any way good for the railway? Or at least worst than the current lot? As far as I'm concerned, I wouldn't trust the Tories with the railway as far as I could throw them.

The record of the Conservatives as far as BR stands by itself far and above anything Labour have ever done. It is a shame that you have taken the decision to listen to tired old Political lies and disingenuity spouted off by the Left and sadly the Trade Unions who actually benefitted from Railway investment under the Conservatives. It saddens me that there are still people who are not prepared to reach a decision based upon facts rather than following blindly a totally discredited and disingenuous mantra preached by those with a distorted Political agenda.

Remember most of the Beeching Closure were carried out under Labour administrations, and the Labour Governments of the 70s were no friend of the Railways at all. Various Ministers lied and deceived Parliament about their plans for closure, and it was the Conservative Government under Mrs Thatcher that actually saw the first new station openings, electrification extended, new traction and rolling stock ordered, and the various financial inducements to transfer freight onto rail.

Incidentally one of the early acts of Labour after 1997 was to withdraw the Section 8 grant which was given to encourage the creation of new freight facilities, and they have been responsible for introduction of excise duty of diesel for trains. They have allowed the true cost of motoring to fall, whilst at the same time allowing rail travel costs to increase, and they have continually favoured road freight over rail.

The costs of new rail projects are assessed using out of date and much lower petrol costs so as to demonstrate that rail does not provide an adequate return when in fact, properly costed the figures are dramtically altered.

Labour treat the Railways as a convenient cash cow and had they been interested in changing the Privatisation that they objected whole-heartedly to in Opposition (even as late as stating they would renationalise in the week of the 1997 General Election), they could have taken a number of opportunities. Instead they continued to sell off parts of BR that even the Conservatives felt should be left in state hands.

There are whole new metro systems that have been stopped, and expansions schemes for others stopped under Labour, yet amazingly people seem to be unable to comprehend this, which I find quite depressing. It is clear that whatever harm Labour do, there will always be those with the rose tinted spectacles who will never see this by choice or even accept the facts when presented, choosing instead to continually repeat the old "Conservatives close our Railways" matra that seems to be implanted in their brains.

Even when I have previously laid out for comparison the records of Labour cuts against Conservative investmnent, those on the Left always contest them even though they are factual and easily checkable. :roll:

 

[thefab444]

Why do you automatically assume everyone "on the left" supports Labour? It's possible to hold left wing views and disapprove of (Nu) Labour.

 

[Old Timer]

Why do you automatically assume everyone "on the left" supports Labour? It's possible to hold left wing views and disapprove of (Nu) Labour.

Because who else can the Left support ?

The Left claim to be Socialists, the Labour Party is the natural home of Socialism in the UK.

Whilst there are other Socialist Parties, unless one is willing to engage in violent Politics, they are not a suitable home for the normal average Socialist.

Remember also that every Left Wing party will favour Labour over the Centre and Right Wing parties.

Therefore the only home for anyone on the Left who wishes to engage with the electoral system has to be Labour. The alternative is the violent Left Wing factions who will never wield power as they are completely undemonstrative of many who hold Left Wing views. A quick check on the histories of the current Cabinet will reveal some very nasty surprises and Damascean conversions in order to gain power, which is what they wanted anyway. This current Labour Government has probably the second highest number of Marxist, Stalinist, Leninist members, bar the one immediately previous to it.

Given a choice between a Labour or a Conservative Government which one would anyone on the Left want in power ? QED.