Wales & Borders not-for-profit plan "by summer"

[krus_aragon]

The BBC are reporting that the idea of putting a not-for-profit structure in charge of railways in Wales are still being considered:

A plan for a not-for-profit firm to run railways in Wales will be ready by the summer, said Transport Minister Edwina Hart.

Ministers have already said they want to see this model take over the Wales and Borders franchise from Arriva Trains when the contract comes under Welsh government control in 2018.

Mrs Hart also said she would like more power over Network Rail.

"I don't think the model we've had previously worked," she added.

In an interview with The Wales Report with Huw Edwards, Mrs Hart says one option would be to place an effective cap on the profits a franchise operator could make.

http://www.bbc.co.uk/news/uk-wales-31135287

The issue is due to be discussed on The Wales Report, tonight at 22:40 in Wales. Should be available for all after broadcast on Iplayer.

 

[GrimsbyPacer]

That set up is worth serious consideration.

 

[swt_passenger]

That set up is worth serious consideration.

SO why give it the thumbs down?

 

[Gareth Marston]

The BBC are reporting that the idea of putting a not-for-profit structure in charge of railways in Wales are still being considered:



http://www.bbc.co.uk/news/uk-wales-31135287

The issue is due to be discussed on The Wales Report, tonight at 22:40 in Wales. Should be available for all after broadcast on Iplayer.

I see Network Rail has been heavily criticised which of course is a not for profit company!

Of course the Borders & more will want a proper say the assumption that Cardiff knows best for Gloucester, Hereford, Shropshire, Cheshire, Greater Manchester and West Midlands is not necessarily shared in those places.

 

[NJTom]

the welsh assembly have destroyed everything they were given control over.

 

[GrimsbyPacer]

SO why give it the thumbs down?

Because I'm using a phone with dodgy touchscreen. I didn't mean it.
I can't edit it out either.

 

[arfortune]

It always frustrates me when politicians use the railways to point score.
Railway companies don't make that high a margin compared to many industries and they're not good at promoting themselves against the media guff that's put out there.
Unfortunately the Welsh Government is quite immature in how it operates generally, be it transport, health, education etc, and always seem to want to do things in a different way, almost for the sake of it. There's also the political view that profits are bad full stop, and an assumption that not-for-profit is the answer to all problems.
They could already limit the profits made or specify more of a concession as in London Overground, but as Gareth says there are other regions where the Wales & Borders franchise have significant impacts, and these must be considered.
The real issue that no-one will mention is that of money. The next few years are going to see bigger cuts than we've already experienced. It'll be interesting to see the impact this has on subsidy available to the railways across the UK.
I may have come across as anti not-for -profit option; am not at all. What I really want is for transport, and indeed all services, to be the best they can be. All options must be considered and politicians really should stop using these things to grandstand and not comment on things they don't fully understand. Debate - yes, presenting the facts - definitely, but go with the policy that's best for the people and country. This is unrealistic as our politicians are largely only in it for themselves

 

[Llanigraham]

the welsh assembly have destroyed everything they were given control over.

RUBBISH!!
Do please give us your evidence of that?
They seem to be doing a lot more for the railways than Westminster is.

 

[Arglwydd Golau]

the welsh assembly have destroyed everything they were given control over.

That really is a very simplistic statement and you should try to justify it. Have you been listening to David Cameron too much?

 

[Gareth Marston]

NFP

Still has to lease rolling stock
Still has to pay Network Rail access charges
Does not control the infrastructure it runs on
Still has to interface with other TOC's etc
Still top heavy in management compared to BR
The premise is that TOC's profits can pay for investment but what incentive does the NFP have to generate surpluses?
TOC profits only a quarter of that that industry generates.

 

[eisenach]

Welsh Water is a really good example of how good a not-for-profit company can be. In its current guise, it came into being after a rampant investment group screwed up.

 

[merlodlliw]

Welsh Water is a really good example of how good a not-for-profit company can be. In its current guise, it came into being after a rampant investment group screwed up.

Welsh Water is a utility,owning its infrastructure,in my opinion it can not be compared to transport.
I also agree with Gareth, what say will the Borders Counties have that make up the franchise.
The Scots Government could not attract one Company to run its services as a not for profit Company.
I now fully expect DB to be given another five years of no growth,while political in fighting will come to the fore.

 

[Bletchleyite]

The Scots Government could not attract one Company to run its services as a not for profit Company.

Of course no commercial undertaking would do that - but the Welsh Government could just found their own.

Neil

 

[northwichcat]

Wonder if one of the companies who want to run a UK rail franchise but never get shortlisted for one will finish up running it to prove they can run trains in the UK.

 

[merlodlliw]

Of course no commercial undertaking would do that - but the Welsh Government could just found their own.

Neil

I have to ask where will the funding come from?
The Ministers comments "Mrs Hart said Network Rail, which answers to the Department for Transport in London, has been responsible for "massive delays" and "escalating costs".
Network rail is a not for profit undertaking. perhaps the Minister forgets that.

 

[Bletchleyite]

I have to ask where will the funding come from?

The same place it presently does for ATW. The argument is that it will be cheaper.

If you mean set-up capital, perhaps it will have to be borrowed.

Neil

 

[merlodlliw]

The same place it presently does for ATW. The argument is that it will be cheaper.

If you mean set-up capital, perhaps it will have to be borrowed.

Neil

Yes set up Capitol, borrowed from whom, I think the Co Op Bank can be ruled out now.

 

[Bletchleyite]

Yes set up Capitol, borrowed from whom

No doubt the Welsh Government will have some, but otherwise presumably the open market like anyone else? I don't know what binds them on such things, though.

I think the Co Op Bank can be ruled out now.

Neil

 

[merlodlliw]

Wonder if one of the companies who want to run a UK rail franchise but never get shortlisted for one will finish up running it to prove they can run trains in the UK.

Not a chance of this occurring, the set up costs will be multi £Millions.
--- old post above --- --- new post below ---

No doubt the Welsh Government will have some, but otherwise presumably the open market like anyone else? I don't know what binds them on such things, though.





Neil

If they can sell Cardiff Airport perhaps,and put the money back into reserves,but that will be small fry.

 

[northwichcat]

Not a chance of this occurring, the set up costs will be multi £Millions.

Serco did operate Manchester Metrolink on a management contract before getting involved in heavy rail franchises. Stagecoach got awarded the latest contract but later realised they can't make money off it or splash their branding all over the trams (unlike in Sheffield) so sold Stagecoach Metrolink Limited to RATP - as the only way they could make any real money from the contract.

There was a later dispute when it was revealed Stagecoach Metrolink Limited didn't pay a contractor and the expense wasn't included in the financial details handed over to RATP so RATP refused to pay it with Stagecoach saying it was no longer their concern as they didn't own the business. It resulted in the contractor telling workmen to park their lorries on the Salford Quays line to prevent Metrolink from running.

 

[Llanigraham]

The same place it presently does for ATW. The argument is that it will be cheaper.

If you mean set-up capital, perhaps it will have to be borrowed.

Neil

There is one large investment bank in Cardiff.

 

[merlodlliw]

There is one large investment bank in Cardiff.

depends on the rate of interest and the WG guarantee,I don't see many money lenders getting involved in politics, time will tell.
However the Bordering Counties will want to ensure the Company of whatever shade will be free to serve them without bias.

 

[Gareth Marston]

Of course no commercial undertaking would do that - but the Welsh Government could just found their own.

Neil

They intend to set up a company.
--- old post above --- --- new post below ---

depends on the rate of interest and the WG guarantee,I don't see many money lenders getting involved in politics, time will tell.
However the Bordering Counties will want to ensure the Company of whatever shade will be free to serve them without bias.

People I speak to along the borders have no intention of allowing Cardiff to dictate what happens along the Borders (and some of them are Labour).

 

[tbtc]

I see Network Rail has been heavily criticised which of course is a not for profit company!

Network rail is a not for profit undertaking. perhaps the Minister forgets that.

True - Big Bad Network Rail is exactly the kind of unaccountable not-for-profit organisation that Cardiff Bay is so keen on... they don't get irony, do they?

With it's rising debts, problems delivering new infrastructure, problems maintaining existing infrastructure (e.g. the engineering delays over the recent festive period) etc, Network Rail isn't a shining example of what a not-for-profit organisation could be.

It always frustrates me when politicians use the railways to point score.
Railway companies don't make that high a margin compared to many industries and they're not good at promoting themselves against the media guff that's put out there.
Unfortunately the Welsh Government is quite immature in how it operates generally, be it transport, health, education etc, and always seem to want to do things in a different way, almost for the sake of it. There's also the political view that profits are bad full stop, and an assumption that not-for-profit is the answer to all problems.
They could already limit the profits made or specify more of a concession as in London Overground, but as Gareth says there are other regions where the Wales & Borders franchise have significant impacts, and these must be considered.
The real issue that no-one will mention is that of money. The next few years are going to see bigger cuts than we've already experienced. It'll be interesting to see the impact this has on subsidy available to the railways across the UK.
I may have come across as anti not-for -profit option; am not at all. What I really want is for transport, and indeed all services, to be the best they can be. All options must be considered and politicians really should stop using these things to grandstand and not comment on things they don't fully understand. Debate - yes, presenting the facts - definitely, but go with the policy that's best for the people and country. This is unrealistic as our politicians are largely only in it for themselves

Great post.

It's all about the money - if the people in charge of the franchise want to award it to a company promising investment, growth and improved services then it should be good. If they want to award the franchise to the company requiring the lowest subsidy, it'll probably be a bit rubbish.

Nothing to do with public/private - a lot to do with how deep the pockets are in Cardiff Bay.

They seem to be doing a lot more for the railways than Westminster is.

They're talking a good game, but reluctant to actually pay for much. Railways seem less important than the Heads Of The Valleys Road/ M4 relief/ Cardiff Airport - Actions speak louder...

Welsh Water is a really good example of how good a not-for-profit company can be. In its current guise, it came into being after a rampant investment group screwed up.

...but Welsh Water can't divert significant resources from one side of the border to the other - there's not going to be a reduction in supply of water to Hereford so that Welsh taps have more water available to them.

It doesn't really matter where water comes from, but it does matter who pulls the strings with a TOC - the Wales & Borders has some busy flows in England (Chester to Manchester) but will the puppet masters in Cardiff Bay care about that (since they are unaccountable to English voters)?

If people can't get a seat on a service from Caerphilly to Cardiff, they can badger their elected representatives for more capacity.

If people can't get a seat on a service from Chester to Manchester, they can't exert that pressure. Which complaints do you think someone sitting in Cardiff Bay will treat as a priority?

The Scots Government could not attract one Company to run its services as a not for profit Company

True - and if a not-for-profit organisation (co-operative, trades union etc) didn't even make a bid for the Scottish franchise then the awkward Wales & Borders franchise is never going to get a look in. Unless you spend a lot of taxpayers' money creating your own organisation to run it, I suppose.

 

[Llanigraham]

tbtc,
Your rant is so biased and inaccurate to be worthless!
Do some research as to why the Christmas engineering over-ran instead of blindly blaming NR.
Thought Hereford got their water from Severn Trent, like I do in Mid Wales?
Very rare people can't get a train seat between Chester and Cardiff.

Get your facts right!

 

[AndrewP]

What is the problem with profit?

A reasonable return slightly greater than what could be achieved by simply investing the working capital is completely fine and, when combined with a shared savings / benefits scheme can work very well.

Now excessive profits are a different matter and are totally unacceptable but this can be overcome by using an open book contract with appropriate audits.

 

[rf_ioliver]

the welsh assembly have destroyed everything they were given control over.

https://www.youtube.com/watch?v=9foi342LXQE

t.

Ian

 

[merlodlliw]

tbtc,
Your rant is so biased and inaccurate to be worthless!
Do some research as to why the Christmas engineering over-ran instead of blindly blaming NR.
Thought Hereford got their water from Severn Trent, like I do in Mid Wales?
Very rare people can't get a train seat between Chester and Cardiff.

Get your facts right!

You make an interesting point "Chester to Cardiff" perhaps the reason is so few use the service between the two Cities.

 

[northwichcat]

Thought Hereford got their water from Severn Trent, like I do in Mid Wales?

No it's Welsh Water. My Gran lived in Hereford in her latter years.

 

[kieron]

...but Welsh Water can't divert significant resources from one side of the border to the other - there's not going to be a reduction in supply of water to Hereford so that Welsh taps have more water available to them.

Of course they can. Even without large-scale engineering works, water companies control how much they spend to maintain and expand the water supply and where they spend it. This means that their actions decide how much water they treat in and around Hereford, and how much of that is lost before it reaches the customer.

Thheiis in turn, means that the choices they make affect whether they attempt to restrict demand with measures such as hose pipe bans. I don't think Dŵr Cymru Welsh Water have ever had a hose pipe ban, though.

On top of this, I'm not sure that Dŵr Cymru Welsh Water have too much to do with the Welsh Government (other than the connection created by them being a regulated monopoly, that is). Unlike with Network Rail, none of the members of Glas Cymru are current civil servants.