passenger growth????? you can't get many more passengers onto some XC services and some Northern services where the trains are packed and passengers get left behind. It's vicious circle, and passenger growth will not happen unless services have more capacity and are more reliable.
Yes, I definitely think passenger growth is being stunted by the delivery of poor service.
Spot on posts both of these!
The current models for bids are based on a growth in numbers, but rarely does the bid include an increase in the stock level sufficient to cope fully with the existing traffic let alone an increase. TPE Is a classic example where their routes prior to Nova schemes were already often full and standing, and I have watched people at York and Manchester unable to get on and waiting for the next service. Increasing the stock so that it now copes with existing demand does not encourage growth.
Abelio are not having their franchise extended due to performance, but at least their intent was worth some praise - the main routes have increased capacity (Edinburgh-Glasgow up from 6 car to 8) and regional intercity services up from 3 to 4 car, with the potential to add additional coaches to the 125s. Now, I am fully aware of the rough ride it's been to get to that point, and certainly not all issues are the operators fault, but the vision was right. Some franchises seem to be either not planning properly for increased passenger numbers and replacing like for like - even though the financial side is based on growth - or merely getting the number of seats to match the existing passengers. None of these things encourage growth.
So back to the DfT - yes, they should be looking for value for money from a bid, but they also need the expertise to understand if the model proposed, based on existing numbers and indeed future paths, would actually deliver sustainable growth. If the DfT cannot evaluate this as part of a bid, then the franchise model is doomed to failure. And as that seems to be the consensus, the finger of blame only really points one way.
BW
I have the impression the DfT is quite affected by politics of those in power, good evaluation of complex issues isn't so much of concern. Value is never found at the cheapest or most expensive extremes of almost any market - trains included. What would be the point of buying a £100 car if it will break down immediately and cost you an arm and a leg to tow, repair or scrap? Same applies at the other end, a £500,000 car is probably not 20 times better than a £25,000 car.
A good example of this might be the DfT's mismanagement of electrification, instead of coming up with a sustainable model that can be slowly rolled out over time, one week the entire country will be electrified within the next three years and the next it is suddenly cancelled. The sensible thing to do would be commit a decent amount of money over an extended period of time, giving the opportunity to again build expertise in the field, getting the job done more efficiently.
What my concern here is - as much as the new TPE Nova stock are lovely to travel on with more seats (MK5A in the morning and Class 802 in the evening). Does TPE have the option for extending the number of carriages on the new stock?
I'm concerned that in 18 months - 2 years time (when the new stock is bedded in) we'll be exactly in the same position we're in now. All the new stock will be full with significant amounts of standing people. So we will have gone through this pain of testing new trains, disruption due to staff training (with the cancellations etc) and ad-hoc swaps due to niggle issues with new stock only to be back in the same position in a short amount of time.
I'm sure without much wiggle room the stock could be increased to 6 carriages a piece easily enough.
The Hitachi 802's I'm sure would be incredibly easy to add carriages to. Hitachi has committed to building new 800 class trains in the UK for a while to come, so the supply chain will still likely be there for the next few years. However, even when production lines are closed, companies will extend orders if a uniform fleet is required. 390's were built between 01/04 with extra orders of full sets and carriages being fulfilled by bombardier between 09/12. 106 vehicles were built. M5000's are still being ordered over 10 years after their introduction, although I'm not sure if the production line has ever been fully closed.
In regards to stock orders from the DfT, I would completely agree they adequately cater for future growth. Considering the lead times on getting new trains delivered, the kind of pro-activity the DfT seems to show a complete lack of, is vital.
One thing to consider is that business is all about risk and managing it. Businesses that don't take risks rarely make profits. So I think whilst the number of bidders will come down there will be bidders because if you have fewer bidders you can chance your arm and bid at much lower premiums/greater subsidy and at that point Stagecoach/virgin etc. might well throw their hats back in the ring because the potential profits will be higher
Who says there will continue to be franchises?
The Transport Minister, Grant Schapps said in a TV interview that the Williams review will bring about more franchise 'partnerships', like Avanti West Coast. I have a feeling, based on this Franchising may continue as normal, but partnerships of companies will bid to help spread risk the DfT seems unwilling to accept, I may be wrong though, I'll have a quick look at a House Of Commons article on the Williams Review at the bottom of my post!
A day and a bit later and nobody has responded to this post - which indicates to me that many are not really interested in the underlying reasons, or possibly don't understand them or their significance.
I think it has been clear to outside observers for some time that the DfT has been trying to export risk on almost anything for which it pays money. This is acceptable if it is clear to all concerned that if one doesn't want to carry any risk oneself then the premiums get very expensive. I recently heard this being explained using a rather nice example: a leased car has a clause in the contract that if the car breaks down a substitute will be offered until the original is repaired. This swap over will be affected within three hours of the failure within 20 miles of home or workplace. However consider the case when the driver will not accept any risk that he/she will be without a car for more than a few minutes wherever in the country they happen to be. What would be the size of the premium be if a car had to be supplied within half an hour to a god-forsaken road in the Brecon Beacons?
A classic example on the railways is the IEP contract: the DfT exported practically all the technical, commercial and operational risks to third parties although it was the instigator of the programme. Apart for paying for consultancy services during the 'project definition' phase it has put no money into the programme. Similarly for Cross-London Trains, the Class 700s for Thameslink, and the recent spat about pensions liabilities for periods which were not the responsibility of the putative operators.
Rail magazine recently mentioned in an editorial that one of the reasons for the high cost of HS2's infrastructure was the requirement that the earthworks would be stable within very tight tolerances for a period of thirty years or so. To meet this it would seem that a form of bridge structure within embankments would be needed to carry the tracks (a little like the way HS1 is carried across the marshy ground at Rainham) - so pushing the costs up. Whether this is so, I don't know - but it seems of a piece with the DfT's 'modus operandi'.
As you say, the current form of franchising is dead - together the DfT and the Treasury have killed it. To my way of thinking the Williams review must in the first instance identify and nail down this issue of who carries the technical, commercial, financial and operational risk of each activity: the DfT or the future devolved sub-national transport authorities, the infrastructure suppliers; the infrastructure operator(s), the ROSCOs or the TOCS.
One can fiddle with the organisational model as one will - but if the cost of risk is placed on the wrong body it will all go pear-shaped again.
Yes, I honestly think that the blame for this mess lays directly on the desk of the DfT and it's mismanagement over the last 15 or so years. Short termism beginning with zero growth contracts and shoving risk onto 3rd parties has brought the system to its knees while also giving the department almost zero recourse from the public.
The problem with DfT exporting risk is it makes literally no sense.
Paying someone to take your risk on is almost always a bad move economically (after all the people you give it to aren't doing it out of the kindness of your heart), unless there is ar isk that the cost of whatever you want to insure against will break you.
Since no feasible rail incident could render the state unable to pay for the damage/losses etc, there is no reason for the state to insure against it by transferring the risk to outside entities.
It's just burning money.
This would make sense, in fact this is mentioned in the Williams Review.
https://commonslibrary.parliament.uk/insights/the-williams-review-the-future-of-rail/
Just had a read through this 'insights' article on the upcoming Williams Review, like to bring up some interesting points. To avoid this post being moved to another thread, I'll try and keep this relevant to the solutions the DfT may provide that make bidding for franchises, as well as delivering a quality service more tenable.
A concession model
In the same speech, Williams said the current franchising model has “had its day.” His principles for a new system would include a different relationship between the public and private sector, “that lets train operators get on with running services in the interest of passengers,” and long-term incentives for creativity and innovation.
What this is likely to mean in practice is a shift from the current franchise model to one involving longer term concessions. Concession agreements are very similar to franchises, but the legal framework is different. There are already a few rail services that are exempt from the franchising provisions of the
Railways Act 1993 and are operated by the private sector on behalf of a public sector body (in London and Merseyside, for example).
Under the concession model, a public sector body tends to retain the revenue risk rather than passing this on to the appointed operator and bidders generally do not have to produce timetables or revenue projections.
This paragraph speaking of the concession model, seems to suggest that the public sector will retain the revenue risk, instead of private operators. This would likely be in line with what others have said above about the DfT trying to shove risk onto operators. It both discourages bidders and there will be a certain cost involved with managing risk in this way. Currently, it's like the military buying tank insurance.
This is from some initial Williams Review papers -
https://assets.publishing.service.g...way-models-gb-and-overseas-evidence-paper.pdf
Rather than transferring passenger revenue risk, these contracts often contain some limited payments or incentives aimed at giving the operator 5. System approaches 31 some interest in overall revenue growth. In the UK, this is similar to the model used on the London Overground contract let by TfL
This quote is in regards to how risk is shared in other countries and in fact the London Overground contract.
I'll end with a final quote I find somewhat important and amusing;
Certainty of long term funding of infrastructure is important
