starting a train company

[trainlover43]

if i wanted to start a train company like lner, cross country, and TP express

and i had the money to buy trains, who would i need to contact and would it be possible

thanks, jack

 

[CardiffKid]

You’d need experience of (or a significant partnership) running another transport firm as well as the money etc (Bus or Plane in the U.K., trains abroad et)

Then you’d contact the DfT (assuming you’re in England)

 

[Jozhua]

The DFT sends out Tenders for prospective train operating companies to bid on. These used to be funded by mixtures of subsidy/fares (or fares-repayment), but now they are fixed price contracts to run the services.

The good news is, you don't need to buy any trains, they are leased from ROSOCOs (rolling stock operating companies), who own the trains.

You'll then need to pay track access charges to Network Rail to use the track.

The bad news is, well, you can't really do much in terms of changes to services. The DfT has certain specifications they are looking for i.e service patterns and the network is very congested, so finding room to run any extra services is difficult.

Open Acess operators are free to do what they want, but you won't get any money from government, so they are limited to only the most profitable, in demand of routes that existing TOCs don't cover (so not many). Hull trains is one, Grand Central is another. Lead times on new rolling stock can be up to a couple of years, so finding old rolling stock is probably a more likely option. Then there's the costly process of making it accessible, etc. You're also stuck battling it out for slots with existing TOCs, which is a challenge, especially around the UK's major cities, most of the infrastructure is running at over 100% of reasonable capacity.

Expect the whole process to cost at minimum £10 million, very likely higher, especially if you wanted to go the open acess route.

If you've got some billions to spend, and it's really burning a hole in your pocket, let me reccomend helping out the fine folks of Leeds on building a tram system. God knows they need it!

 

[adc82140]

You’d need experience of (or a significant partnership) running another transport firm as well as the money etc (Bus or Plane in the U.K., trains abroad et)

Then you’d contact the DfT (assuming you’re in England)

Looking at the existing and former TOCs, they all seem to come from the world of bus operators or overseas rail operations. I can't think of any exceptions, therefore is it actually a prerequisite? There are none from the airline industry I can think of, nor the sort of facilities management companies (CBRE, ISS etc) that this sort of thing would normally attract.

 

[Camden]

A more intriguing add-on question in response to this: what if a company wanted to do a "Brightline" in the UK?

Ie. Buy up all the land necessary for stations and track between two destinations. Get the necessary permissions from the councils to build on it. Contract a third party to construct the infrastructure. And buy and operate the trains for its services.

It could be prohibitively expensive, but for the sake of the exercise assume the land costs a £1. How would this all play out?

 

[jopsuk]

Even companies that weren't directly existing bus operators in the early round of franchising were formed of managers from the transport industry- whilst Prism was a brand new company backed by big investors, the actual people involved were senior people from bus companies.

The realistic bit here is that to form a new company you need to be in one of two situations:

A: Have a long career in operational management, preferably in the rail industry but at the very least in the transport industry, and distinguished enough that outside investors will risk their money with you
B: be an outside investor with a lot of money who can find and hire high quality operational management to build a new company.

At the moment, the best advice, even in situation A and B, is "don't, run away, it's an awful time to try to be involved"

 

[pdeaves]

Something no one has mentioned yet is that you will need operating licences and track access agreements. Contact the ORR for the former and NR/the Core Valley Lines infrastructure operator (for South Wales valleys) for the latter (to be ratified by ORR). Then someone has to agree train paths (NR/ORR again).

 

[norbitonflyer]

Looking at the existing and former TOCs, they all seem to come from the world of bus operators or overseas rail operations. I can't think of any exceptions, .

Virgin is one exception. There were also some management buyouts, such as Chiltern before DB took it on - so UK rail operators rather than overseas.

Midcounties Co Op's proposed "Go-Op" service from Nuneaton toTaunton/Yeovil would be another, but this has been a "jam tomorrow" project for over a decade now. Their website says services are projected to start "in the summer of 2020" using class 769s. I think an update is long overdue

 

[Domh245]

Virgin is one exception.

Virgin still had plenty of experience imported through their partnership with Stagecoach though

 

[Bletchleyite]

A more intriguing add-on question in response to this: what if a company wanted to do a "Brightline" in the UK?

Isn't this basically equivalent to opening a preserved line?

Edit: Legally slightly different, I guess, because you'd need an Act of Parliament rather than just a Light Railway Order. But other than that (and the cost)...

 

[jopsuk]

Virgin is one exception.

Virgin married marketing and investment from Virgin Group to transport operations experience from Stagecoach

== Doublepost prevention - post automatically merged: 7 Nov 2020 ==

A more intriguing add-on question in response to this: what if a company wanted to do a "Brightline" in the UK?

Note that Brightline was founded by Florida East Coast Industries which used to own (and used to indeed be) Florida East Coast Railway.

 

[DelW]

Isn't this basically equivalent to opening a preserved line?

Edit: Legally slightly different, I guess, because you'd need an Act of Parliament rather than just a Light Railway Order. But other than that (and the cost)...

Rather more ambitious - they are (or were until Covid suspension) running brand new trains on what had been freight tracks, they'd built new stations, and are developing a high-speed (by US standards) extension well over a hundred miles long.

They are of course having the same issues as open access operators here.

 

[Jozhua]

A more intriguing add-on question in response to this: what if a company wanted to do a "Brightline" in the UK?

Ie. Buy up all the land necessary for stations and track between two destinations. Get the necessary permissions from the councils to build on it. Contract a third party to construct the infrastructure. And buy and operate the trains for its services.

It could be prohibitively expensive, but for the sake of the exercise assume the land costs a £1. How would this all play out?

If you were going to do that, it might be cheapest to re-open an old alignment that has the potential to offer some decent speed. It's not like America over here though, where there are massive cities that stand out to connect by rail, which aren't to some capacity. I'd argue that there's a lot of room for improvement, but improving on the existing infrastructure isn't going to be a cheap process. A lot of expensive land acquisition and tunnelling.

Isn't this basically equivalent to opening a preserved line?

Edit: Legally slightly different, I guess, because you'd need an Act of Parliament rather than just a Light Railway Order. But other than that (and the cost)...

Aren't preserved railways limited to 25mph? Or is this just because it is slightly cheaper to maintain equipment to this standard operationally?

Rather more ambitious - they are (or were until Covid suspension) running brand new trains on what had been freight tracks, they'd built new stations, and are developing a high-speed (by US standards) extension well over a hundred miles long.

They are of course having the same issues as open access operators here.

Oh yeah, the new extension is very suprising! To be fair, it doesn't need to be incredibly fast to be competitive with driving. If you can maintain a consistent 80mph, that's a start. 125mph and you're absolutely crushing driving in regards to journey times!

I hope they weather covid okay. I was going to say even if they go under, florida would try and make use of the infrastructure, but this is America, so who knows...

 

[Bletchleyite]

Aren't preserved railways limited to 25mph? Or is this just because it is slightly cheaper to maintain equipment to this standard operationally?

A bit of both there. A preserved railway usually comes into existence by way of a Light Railway Order, whereas an Act of Parliament is required for a "proper" railway. But yes, lots of things surrounding that make it cheaper.

 

[Dr Hoo]

A bit of both there. A preserved railway usually comes into existence by way of a Light Railway Order, whereas an Act of Parliament is required for a "proper" railway. But yes, lots of things surrounding that make it cheaper.

I thought that new Light Railway Orders had finished. New stuff would have to be under Transport & Works or ROGS provisions (says he, vaguely).

I am not a specialist in this area! Can anybody else comment?

 

[87 027]

See these threads also

https://www.railforums.co.uk/threads/whats-involved-in-setting-up-an-open-access-operation.185681/

https://www.railforums.co.uk/thread...in-the-rail-industry-unfair-fares-etc.119168/

 

[Bald Rick]

A more intriguing add-on question in response to this: what if a company wanted to do a "Brightline" in the UK?

Ie. Buy up all the land necessary for stations and track between two destinations. Get the necessary permissions from the councils to build on it. Contract a third party to construct the infrastructure. And buy and operate the trains for its services.

It could be prohibitively expensive, but for the sake of the exercise assume the land costs a £1. How would this all play out?

They can. Indeed hundreds did, between 1825 and about 1900. And then one more much more recently (Heathrow). Note the fares on the latter.

 

[ChiefPlanner]

As someone (quite high in the rail industry said)

"How do you make a small fortune from rail"

ANSWER

"Start with a very large one"

 

[DB]

Virgin still had plenty of experience imported through their partnership with Stagecoach though

They did later, but not initially.

GNER was another non bus one - the parent company, Sea Containers, came from the world of shipping.

 

[pdeaves]

Something no one has mentioned yet is that you will need operating licences and track access agreements. Contact the ORR for the former and NR/the Core Valley Lines infrastructure operator (for South Wales valleys) for the latter (to be ratified by ORR). Then someone has to agree train paths (NR/ORR again).

Oh, and station access agreements, too.

 

[Dr Hoo]

A more intriguing add-on question in response to this: what if a company wanted to do a "Brightline" in the UK?

Ie. Buy up all the land necessary for stations and track between two destinations. Get the necessary permissions from the councils to build on it. Contract a third party to construct the infrastructure. And buy and operate the trains for its services.

It could be prohibitively expensive, but for the sake of the exercise assume the land costs a £1. How would this all play out?

You really do need Statutory Authority to protect yourself against things like claims of 'public nuisance' even if you own the land, track and so forth. Otherwise you might very well find that someone gets an injunction taken out against you after Day 1 because "your trains are keeping me awake at night" or whatever.

 

[Sad Sprinter]

I asked the ORR the same question when I was 13 and had plans of starting a St. Pancras to Blackpool service using five car class 222s by the time I was 18. I even asked him if I could apply for track access...

Nice though the ORR employee was, he said I would need a few million to get the party started. I had hoped 100 quid might be enough, so I wasn't far off...

I think even if you had the means to create the company, as others have said, the environment for Open Access is very tough. Don't forget, Wexham and Shropshire collapsed in 2011 sadly. There are hardly any profitable routes out there that aern't already served by a TOC, or the paths for such a service dosen't exist.

 

[greyman42]

I remember a documentary on television about this subject. As i recall, it was someone wanting to bid for the Southern franchise. Can anyone remember any more details?

 

[Bald Rick]

I remember a documentary on television about this subject. As i recall, it was someone wanting to bid for the Southern franchise. Can anyone remember any more details?

It was a group of commuters IIRC. Deluded. Panorama. Guardian review link below.

The Passengers That Took On the Train Line review

Jacques Peretti takes five dissatisfied commuters and follows their bid to fix the Southeastern franchise. Could they make the trains run on time?

www.theguardian.com

 

[deltic]

if i wanted to start a train company like lner, cross country, and TP express

and i had the money to buy trains, who would i need to contact and would it be possible

thanks, jack

The easiest way to enter the market is to subcontract the whole operation out to an existing rail operator that already has an operating license. You dip your toe in the water by running one off charter services to see if there is a market and build it up from there. The risk is then limited to say £10k in charter fees. I am interested to know how frequently you can run charter services between two locations before you are treated as an open access operator. Eg if I can find the paths could I run a regular weekly service from Manchester to London on Mondays, Manchester to Glasgow on Tuesday, Manchester to Swansea on Wednesdays etc.

 

[Bald Rick]

The easiest way to enter the market is to subcontract the whole operation out to an existing rail operator that already has an operating license. You dip your toe in the water by running one off charter services to see if there is a market and build it up from there. The risk is then limited to say £10k in charter fees. I am interested to know how frequently you can run charter services between two locations before you are treated as an open access operator. Eg if I can find the paths could I run a regular weekly service from Manchester to London on Mondays, Manchester to Glasgow on Tuesday, Manchester to Swansea on Wednesdays etc.

The few companies that run Charters *are* open access operators.

 

[deltic]

The few companies that run Charters *are* open access operators.

Is that because they own their own rolling stock and or locomotives? If I want to charter a train from an existing operator I dont need a license. The question is what if I want to charter a train every week or day can I still get away without being classed as an open access operator and be subject to ORR mainly abstractive rules?

 

[pdeaves]

Is that because they own their own rolling stock and or locomotives? If I want to charter a train from an existing operator I dont need a license. The question is what if I want to charter a train every week or day can I still get away without being classed as an open access operator and be subject to ORR mainly abstractive rules?

Rolling stock ownership doesn't make a jot of difference.

The likes of UK Railtours, Pathfinder, etc., promote tours but pay a licenced company to do the actual train running (usually DB for the former, don't know about the latter). Those companies are open access operators (though many of the franchised TOCs can or could run charter services). You don't need your own licence to run a tour this way but you would if you wanted to do all the train operation stuff yourself.

This should now be clear as mud!

 

[Bald Rick]

Is that because they own their own rolling stock and or locomotives? If I want to charter a train from an existing operator I dont need a license. The question is what if I want to charter a train every week or day can I still get away without being classed as an open access operator and be subject to ORR mainly abstractive rules?

There’s two separate things going on here.

An open access operator is one who holds a certain type of access contract with Network Rail, and typically does not receive any direct taxpayer support for the service, nor is it constrained by any service specification from a Government. They can (and do) come and go as they please, within the rules of timetable planning of course. Every track access contract is subject to regulatory approval though, and any other party to a access contract on any part of the same line of route (or reasonable alternatives) can object to the application for a track access contract by another operator.

The abstraction test is part of the application for an access contract. Charters are, of course, outside the fares system, and don’t accept flexible tickets. They rely on filling a train at often high fares on very bespoke flows.


Hypothetically, if you ran a charter every day of the week in the same path on the same route, and kept outside the fares system, you could still be refused an access contract on the basis of abstraction if the route you were taking was one with a decent flow on it.

 

[D365]

As someone (quite high in the rail industry said)

"How do you make a small fortune from rail"

ANSWER

"Start with a very large one"

A rather familiar saying to those in motorsport.