TfGM Bus franchising

[Andyh82]

What happens with Stagecoach, so they get any financial recompense for having their network pulled from under them, and are they forced to transfer their buses or their staff?

 

[M803UYA]

What happens with Stagecoach, so they get any financial recompense for having their network pulled from under them, and are they forced to transfer their buses or their staff?

The press release mentions TUPE in respect of the staff, so any new operator has to honour the terms and conditions currently enjoyed by the drivers. As Stagecoach have withdrawn their legal objections to the scheme, presumably they have agreed terms with TfGM?

 

[Snex]

Someone really needs to explain this to me as really baffles me at the reasons for it but why on earth are TfGM buying all the buses and depots and then giving them to another party.

It just seems totally illogical and takes the point out of tendering as what exactly can you tender on bar price and going for the lowest bid only never ends well, train franchises sum that up.

Surely tendering the routes out individually or in small groups similar to London and the operators actually having to provide their own buses and actually have to have a depot and drivers would be fairer.

Isn't the point of this about the routes as to me this just seems like a big f you to Stagecoach and Rotala. There's still enough operators around to fight each other ie. Arriva, Diamond, Stagecoach, the independents, potentially even the likes of Transdev operating out of Lancashire aswell.

Not to mention the issues with TUPE'ing staff, some to operators they left in the first place or the fact Stagecoach actually has to agree to this (they've been very quiet). What happens if they just think hang on, no I won't sell the depot I'll sell it for housing or something else instead and tupe most their drivers to Lancashire or elsewhere. It's not as if anyone can stop them.

 

[johncrossley]

Surely tendering the routes out individually or in small groups similar to London and the operators actually having to provide their own buses and actually have to have a depot and drivers would be fairer.

Not to new entrants to the area.

 

[Leedsbusman]

Someone really needs to explain this to me as really baffles me at the reasons for it but why on earth are TfGM buying all the buses and depots and then giving them to another party.

It just seems totally illogical and takes the point out of tendering as what exactly can you tender on bar price and going for the lowest bid only never ends well, train franchises sum that up.

Surely tendering the routes out individually or in small groups similar to London and the operators actually having to provide their own buses and actually have to have a depot and drivers would be fairer.

Isn't the point of this about the routes as to me this just seems like a big f you to Stagecoach and Rotala. There's still enough operators around to fight each other ie. Arriva, Diamond, Stagecoach, the independents, potentially even the likes of Transdev operating out of Lancashire aswell.

Not to mention the issues with TUPE'ing staff, some to operators they left in the first place or the fact Stagecoach actually has to agree to this (they've been very quiet). What happens if they just think hang on, no I won't sell the depot I'll sell it for housing or something else instead and tupe most their drivers to Lancashire or elsewhere. It's not as if anyone can stop them.

They aren’t buying buses just the depots. They are brokering the sale of buses between the current and new operator if the current operator wants to sell.

 

[Snex]

Not to new entrants to the area.

But surely you should be more interested in the current operators. Other operators have had ample chance to come into Manchester if they wanted to, why should the tax payer be funding an expansion as it's basically what it is since there's no risk.

They aren’t buying buses just the depots. They are brokering the sale of buses between the current and new operator if the current operator wants to sell.

But surely that makes the franchising hard to do. I'm not sure how someone can tender on the basis that they might sell the buses. Where is Go North West going to get hundreds of buses from if Stagecoach decide that they don't want to sell as I'm assuming they expect it to happen?

 

[WatcherZero]

Theres also some electric buses that are bought by TfGM using government green grants then leased to the operators which is to help with the higher purchase cost of electric such as Stagecoaches in Stockport, yellow buses, and a couple of other batches here and there (same method used for the original hybrid metroshuttles all the way back).

Theres also a residual value scheme where the franchisees can register the assets as franchise assets and pass them to their successor for depreciated book value. During the introduction of Smartcards TfGM also offered to lease card readers to the smaller operators.

 

[johncrossley]

But surely you should be more interested in the current operators. Other operators have had amble chance to come into Manchester if they wanted to, why should the tax payer be funding an expansion as it's basically what it is since there's no risk.

You get potentially more bidders if you open up the tendering to outsiders. Already having a depot in the area gives incumbent operators a huge advantage. Rotala thought they were getting a shoo-in by buying the Bolton depot, showing how much of an advantage they assumed they would be getting. The tendering method used by TfGM is widely used outside the UK and of course, as you mention, there is widespread experience with that method for rail. Lower risk (not zero risk) to bidders is good as it means bid prices can be more accurately calculated. Lower risk and more bidders should bring down tendering costs.

 

[Snex]

You get potentially more bidders if you open up the tendering to outsiders. Already having a depot in the area gives incumbent operators a huge advantage. Rotala thought they were getting a shoo-in by buying the Bolton depot, showing how much of an advantage they assumed they would be getting. The tendering method used by TfGM is widely used outside the UK and of course, as you mention, there is widespread experience with that method for rail. Lower risk (not zero risk) to bidders is good as it means bid prices can be more accurately calculated. Lower risk and more bidders should bring down tendering costs.

Yeah some fair points but I'd assume that most of them were moving from a public system rather than private.

I just think it's a bit unfair to effectively give a private company the boot from an area they've had for years for someone who's never operated there especially when they have the teams etc in place.

Mind it'll be interesting to see how Stagecoach respond as they were celebrating the depot at Wigan last week and as far as I'm aware there's a cooling period before announcing tenders publically so I'd assume they knew they'd lost it at the time.

 

[Bristol LHS]

No they will only own the one currently used by Diamond which will now be used by Go Ahead.

== Doublepost prevention - post automatically merged: 24 Dec 2022 ==


Well it was said 9 bidders submitted 33 bids for 11 franchises.

Eight companies bid for both the large franchises in Wigan and Bolton (16) two companies bid for all except one of the small franchises (16) with a further one company bidding for one small franchise (1).

Who do we reckon the 8 are then? Stagecoach, Rotala/Diamond, Go Ahead seem a given. Arriva, First, Transdev? Would make six. Other two..? Comfort delGro, National Express, are Abellio still looking to grow under their new owners?

 

[Shaw S Hunter]

From what I understand, while he was looking to retire his decision was reinforced by what is currently playing out.

Jim Stones' business model depended on him being able to manage the day by day operations himself without having to employ a dedicated traffic manager. It's generally accepted that the fleet size limit for this sort of approach is in the region of 10-12 vehicles. It is evident that the impending franchise system leaves no room for operators of such limited size. He could be described as having been the right man in the right place at the right time when he first started operating around Leigh but with de-regulation being swept away by the franchising model his firm would no longer be suited to play any role in the provision of local bus services. As such the timing was quite fortunate.

 

[Bletchleyite]

Jim Stones' business model depended on him being able to manage the day by day operations himself without having to employ a dedicated traffic manager. It's generally accepted that the fleet size limit for this sort of approach is in the region of 10-12 vehicles. It is evident that the impending franchise system leaves no room for operators of such limited size.

How big are the small franchises?

 

[johncrossley]

How big are the small franchises?

According to the Facebook link posted earlier, 2 to 13 vehicles.

 

[Bletchleyite]

According to the Facebook link posted earlier, 2 to 13 vehicles.

So I guess he would have had a chance to bid for one of those.

 

[WatcherZero]

Rotala said they would be operating the 7 small franchises they won which consisted of 40 routes with a fleet of 80 buses.

 

[TheGrandWazoo]

Rotala said they would be operating the 9 small franchises they won which consisted of 40 routes with a fleet of 80 new buses.

Not quite

the Company has agreed in principle to dispose of its Bolton depot and the majority of the bus fleet based there in two separate stages, as described further below, for an aggregate consideration of approximately £30.1 million in cash. The associated mortgage and hire purchase finance debt will be repaid out of the proceeds of sale. However, the award of the seven Small Franchises worth approximately £18.7 million of combined annual revenue referred to above will require the Company to purchase 67 new buses, as specified by the relevant contracts, at a total cost of approximately £13.0 million, which will be financed by new hire purchase debt.

So as an average, the franchises are about 9-10 vehicles.

Someone really needs to explain this to me as really baffles me at the reasons for it but why on earth are TfGM buying all the buses and depots and then giving them to another party.

It just seems totally illogical and takes the point out of tendering as what exactly can you tender on bar price and going for the lowest bid only never ends well, train franchises sum that up.

Surely tendering the routes out individually or in small groups similar to London and the operators actually having to provide their own buses and actually have to have a depot and drivers would be fairer.

Isn't the point of this about the routes as to me this just seems like a big f you to Stagecoach and Rotala. There's still enough operators around to fight each other ie. Arriva, Diamond, Stagecoach, the independents, potentially even the likes of Transdev operating out of Lancashire aswell.

Not to mention the issues with TUPE'ing staff, some to operators they left in the first place or the fact Stagecoach actually has to agree to this (they've been very quiet). What happens if they just think hang on, no I won't sell the depot I'll sell it for housing or something else instead and tupe most their drivers to Lancashire or elsewhere. It's not as if anyone can stop them.

The rationale behind the purchase of the depots is two fold in that it levels the playing field in not making it advantageous to operators with existing garages in the right areas. It also helps remove additional profit/working capital costs that would be associated with those depots.

The other point about TUPE is that staff invariably transfer to the new provider. Granted, there may be a few Rotala drivers who will stay and move to Eccles. However, the vast majority of Stagecoach Wigan drivers are going to live local in the town or nearby towns like Ashton in Makerfield - they aren't going to move to Chorley.

As for vacating depots, that might be why TfGM are looking at getting new sites (like in Wigan).

 

[Simon75]

With London (my apologies I'm I'm going off subject), as far as I'm aware, some are owned by the operator and some still owned by Transport for London (TFL).

 

[Donny85]

However, the vast majority of Stagecoach Wigan drivers are going to live local in the town or nearby towns like Ashton in Makerfield - they aren't going to move to Chorley.

I wonder if any might be tempted to apply at Arriva’s St.Helens depot.

Granted it won’t be under TUPE but a quick look on both career pages seems to suggest an higher P/H rate of pay at Arriva after 6 months. Plus it’s roughly only 6 miles depot to depot.

 

[markymark2000]

The other point about TUPE is that staff invariably transfer to the new provider. Granted, there may be a few Rotala drivers who will stay and move to Eccles. However, the vast majority of Stagecoach Wigan drivers are going to live local in the town or nearby towns like Ashton in Makerfield - they aren't going to move to Chorley.

Probably worth noting that if someone wants to stay at Stagecoach, depending on where their home is, Stagecoach Merseyside, Gillmoss Depot is 11 miles away. Generally a bit closer than Chorley.

Wigan taking on 362 from Arriva

Is the 362 under franchising or would that remain separate? I am thinking it's a bit odd as Arriva could run the 362 from St Helens interworking with routes which come from that way like the 352 and 320.

 

[M60lad]

The situation with 362 is going to be interesting as I hope whoever takes it on realises that they will need single deckers for the route because of the low-bridge at Coppull, unless they plan on revising the route and operating it via the Old Parish diversion which avoids the bridge altogether

 

[Scotrail88]

I take it vantage is away to go ahead as part of this award.

Was the vehicles owned by first??

 

[TheGrandWazoo]

Probably worth noting that if someone wants to stay at Stagecoach, depending on where their home is, Stagecoach Merseyside, Gillmoss Depot is 11 miles away. Generally a bit closer than Chorley.

It was in response to the line about moving to Stagecoach in Lancashire but TBH, they aren't going to drive that far when they can TUPE across

I wonder if any might be tempted to apply at Arriva’s St.Helens depot.

Granted it won’t be under TUPE but a quick look on both career pages seems to suggest an higher P/H rate of pay at Arriva after 6 months. Plus it’s roughly only 6 miles depot to depot.

They could do that anyway

 

[Xenophon PCDGS]

Would there have any political axes been ground by those awarding these franchises?

 

[TheGrandWazoo]

Would there have any political axes been ground by those awarding these franchises?

The most fervent opponent was Rotala so not really

 

[WatcherZero]

I take it vantage is away to go ahead as part of this award.

Was the vehicles owned by first??

Yes but they were contractually obligated to replace them every five years.

 

[Scotrail88]

Yes but they were contractually obligated to replace them every five years.

Be interesting to see where they end up.
Must be about 20 to cascade out

 

[WibbleWobble]

Jim Stones' business model depended on him being able to manage the day by day operations himself without having to employ a dedicated traffic manager. It's generally accepted that the fleet size limit for this sort of approach is in the region of 10-12 vehicles. It is evident that the impending franchise system leaves no room for operators of such limited size. He could be described as having been the right man in the right place at the right time when he first started operating around Leigh but with de-regulation being swept away by the franchising model his firm would no longer be suited to play any role in the provision of local bus services. As such the timing was quite fortunate.

That's not entirely true - his son-in-law was General Manager so ran it day-to-day, although Jim very much liked to know what was going on to the point that he would visit Leigh bus station daily. The business was marketed for sale but no buyer was forthcoming (probably due to the forthcoming franchising), so he opted to wind it down in order to fully retire.

As for the remarks about Vision losing out, the reson I was given was that there is a franchise requirement that operators have to allow staff to be unionised (no surprise given Burham is incredibly pro-union) and the owner objected to it.

 

[johncrossley]

As for the remarks about Vision losing out, the reson I was given was that there is a franchise requirement that operators have to allow staff to be unionised (no surprise given Burham is incredibly pro-union) and the owner objected to it.

So if they didn't bid, why is at least one Vision employee on Facebook moaning about the fact they didn't win a franchise?

 

[WibbleWobble]

There's not bidding, and there's bidding but then being told you don't qualify unless you agree to the terms and conditions.

Just don't shoot the messenger!

 

[507020]

Probably worth noting that if someone wants to stay at Stagecoach, depending on where their home is, Stagecoach Merseyside, Gillmoss Depot is 11 miles away. Generally a bit closer than Chorley.

Is the 362 under franchising or would that remain separate? I am thinking it's a bit odd as Arriva could run the 362 from St Helens interworking with routes which come from that way like the 352 and 320.

The 362 interworks with the 575, which itself competes with Stagecoach’s 7 on Wigan - Bolton journeys and some short 575 journeys are provided by Diamond. What about the 471? I’m assuming these will all go to Go North West.