Your thoughts on rail franchises placed on public takeover watch list

[Jorge Da Silva]

https://www.cityam.com/southeastern-among-franchises-placed-on-public-takeover-watch-list/

The Southeastern franchise is one of six that could go the way of LNER and be taken over by the government as sources warned there was little time for a new operator to be appointed by April next year.

The bidding competition for the Southeastern franchise, which runs services between London, Kent and parts of East Sussex, was cancelled last week after the government said it was concerned the process would cost the taxpayer too much.

One source told City A.M. that a rail franchise typically takes 18 months to procure, shutting out the prospect of a new operator being appointed in April 2020, the government’s deadline.

The source also said there was no time for the alternative plan – issuing a direct award for the franchise from April next year – because that would require a one-year prior information notice, in which the government is supposed to provide advice about the next 12 months activity. No such notice has been issued.

The squeezed timeframe means that either an emergency direct award could be given to the current operator, Go Ahead, or the Operator of Last Resort (OLR), the function that allows the state to intervene in failed franchises at the last minute, could take over the line.

The source said the OLR had been “beefing up” its mobilisation team in the past six months and that there were now shadow teams for Southeastern and five other franchises – South Western (SWR), TransPennine Express (TPE), Northern, CrossCountry and c2c – in offices in Petty France near Whitehall.

A spokesperson for First Group, which operates SWR and TPE, said: “Under franchising arrangements, it is quite normal for the government to monitor and scrutinise all train operating companies, looking at a variety of factors.

“We have a leading market position in rail; have made £330m of profit over the last five years and will continue to operate our franchises, including TPE and SWR, according to their contractual terms.”

A Department for Transport spokesperson said: “Options for the next South Eastern franchise will be developed and informed in a manner that puts passengers at the heart of the process. The department envisages these will be informed by the Williams rail review.”


The franchise model is the subject of a government-commissioned review led by former British Airways chief Keith Williams, who admitted last month that the system had “had its day”.

“What worked in the 25 years after privatisation is now holding the sector back. It hampers collaboration, stops the railway working as a system and encourages operators to protect narrow commercial interest above passengers,” he said at the time.

The Labour party’s policy on railways is to re-nationalise the railways, which Williams is not thought to favour.

Earlier today the shadow rail minister, Rachael Maskell, could not say how long it would take a Labour government to implement the policy.

“We know we want to get on with this, we’re going to be impatient in government.”

When pressed again by Sky News on how long nationalisation would take, Maskell replied: “We’ll get on straight away with putting our railway system back together and our whole transport system…“It’s going to be straight away,” she added.

Any thoughts?

 

[800002]

Immediate thought:
It doesn't matter what happens - each private operator will seek the best possible profit (if one is appointed) and will continue in the same vein as SE currently do.
If an OLR gets involved, little will change untill such a time when a private operator takes over - then, see above.

'New trains' will be specified which no doubt will be along the same poor lines of class 700 - appalling people movers rather than a decent trainset with focus on customer comfort and wellbeing, while maintaing / improving upon capacity requirements.

The Private operator will toldwhat do, and likely when, similar to the ThamesLink management deal that almagated all the other of the South Easts services into one gloriously mismanaged pile of rubbish.

I'm going to cease now, less I saysomething really unwarranted.
Just remember, it was the government de jour who provided us with THREE 'operators' running the same route, managed by the same damn company.

 

[WatcherZero]

Saw Rachael Maskell on Sky News, it was a cringeworthy performance. Yada yada yada renationalise rail, But Network Rail is already state owned and performs terribly.... yeah but its because we don't own the TOCS. But we did renationalise East Coast and since renationalisation its performance has tanked..... yeah but its all Graylings fault, if he wasn't in charge East Coast wouldn't be badly performing. We also want to renationalise the rolling stock companies.... and how much would that cost? Well we are paying them about a third in leasing charges! Yes but how much would it cost? *silence*

 

[Camden]

My understanding is that the directly operated east coast route was not only popular, but profitable. I recall there being much disquiet about it being resold.

 

[gazzaa2]

Saw Rachael Maskell on Sky News, it was a cringeworthy performance. Yada yada yada renationalise rail, But Network Rail is already state owned and performs terribly.... yeah but its because we don't own the TOCS. But we did renationalise East Coast and since renationalisation its performance has tanked..... yeah but its all Graylings fault, if he wasn't in charge East Coast wouldn't be badly performing. We also want to renationalise the rolling stock companies.... and how much would that cost? Well we are paying them about a third in leasing charges! Yes but how much would it cost? *silence*

Renationalising won't work either, but there will always be Tories to blame for why it won't work. And to be fair Grayling is a good excuse.

 

[Hadders]

My understanding is that the directly operated east coast route was not only popular, but profitable. I recall there being much disquiet about it being resold.

But VTEC offered higher premium payments to the treasury than East Coast did.

 

[43096]

My understanding is that the directly operated east coast route was not only popular, but profitable. I recall there being much disquiet about it being resold.

East Coast has always been profitable, under GNER, NatEx, Virgin, whoever. It is the DfT's greed in gouging premia is what has killed it.

 

[hwl]

https://www.cityam.com/southeastern-among-franchises-placed-on-public-takeover-watch-list/



Any thoughts?

Just the regular refresh of OLR company names. If you look at the various company histories @ companies house you'll see the full history of name changes and that most of them haven't been used since being set up 12-17 years ago.

 

[theking]

I don't understand the fascination with renationalisation you must be in cloud cuckoo land if you think it will deliver anything better for the passengers.

Anything the government is involved in is bloated inefficient and a money pit.

 

[Jorge Da Silva]

I don't understand the fascination with renationalisation you must be in cloud cuckoo land if you think it will deliver anything better for the passengers.

Anything the government is involved in is bloated inefficient and a money pit.

That’s half the problem with the network as Williams said “Government should not manage the railways”

 

[6Gman]

The heading is misleading. The rail firms will not be renationalised.

Their franchises will be removed and placed, initially at least, within the public sector.

The rail firms will continue to be owned privately, or - ironically - by overseas public owners, but they will be neither nationalised nor renationalised by this process.

 

[Tetchytyke]

Oh dear, how sad, never mind.

 

[RealTrains07]

https://www.cityam.com/southeastern-among-franchises-placed-on-public-takeover-watch-list/



Any thoughts?

Whats the issue with c2c? Didnt realise they had issues?

(Also i know its off topic but how do you create new threads?)

 

[Jorge Da Silva]

Whats the issue with c2c? Didnt realise they had issues?

(Also i know its off topic but how do you create new threads?)

Should be on the top right hand side of the section of the forums (for example Speculative Ideas)

 

[Antman]

East Coast has always been profitable, under GNER, NatEx, Virgin, whoever. It is the DfT's greed in gouging premia is what has killed it.

It operates at a profit. But as an entire entity, when you have to prove in finance, pensions risk, having to fund new rolling stock etc., then it’s an entirely different proposition. The DfT needs to accept that there aren’t the number of profitable routes on the ECML compared to the WCML ....

 

[hwl]

Whats the issue with c2c? Didnt realise they had issues?

(Also i know its off topic but how do you create new threads?)

Nothing, DfT have a stack of OLR companies they rotate around as needed City Am has just rediscovered this with the latest refresh. There was thread on this several weeks ago when it actually happened.
It also gives DfT more bargaining power when negotiating extensions ans direct awards.

 

[NoMorePacers]

A nationalised railway would stop the DfT being able to shift the blame to the private TOCs if they cock up, which they likely do now.

 

[pdeaves]

OLR names on this page: http://www.railwaycodes.org.uk/licences/licenced.shtm (for simplicity, 'find' DfT, then you will see all the companies with previous names shown).