FirstGroup trumps Virgin as frontrunner for WCML franchise (guardian 29/07/2012)

[whole diary]

[ellendune]

The fares were also very low in First Class though. FGW^▸ (First Great Western) charge a fair price for the Pullman restaurants, but it is very good quality food. I very much doubt the First Class catering offer was why W&S^▸ (Wrexham and Shropshire (Open Access Operator)) folded though, it was the slow, unattractive journey times and the lack of custom because of that the caused them to fold. If they had been allowed a Wolverhampton and Birmingham stop once moderation of competition ended the ORCATS^▸ (Operational Research Computerised Allocation of Tickets to Services) revenue may have saved them.

They call that an ORCATS raid. Remember open access operators still don't pay full track charges. With an ORCATS raid they also take money from government i.directly through the franchise operator.

[matt473]

They call that an ORCATS^▸ (Operational Research Computerised Allocation of Tickets to Services) raid. Remember open access operators still don't pay full track charges. With an ORCATS raid they also take money from government i.directly through the franchise operator.

Problem is however open access operators can be argued increase the pot through increasing numbers travelling such as East Coast gaining through Hull Trains. Orcats raids seem to quite often be complained about by TOCs^▸ (Train Operating Company) but they will happily carry them out themselves, just look at the once a day XC^▸ (Cross Country Trains (franchise)) service from Bath. Also Orcats is not a fair system in that a large amount of South Wales traffic travel on fgw services but I'm sure I've seen somewhere that ATW^▸ (Arriva Trains Wales (former TOC)) take most of the fares in the area. I guess the fares system needs to change as currently it favours nobody leading to lower premiums for the government, less revenue for operators and for passangers lack of investment and/or choice in terms of service as revenue does not fully match what service is provided by what operators.

[Btline]

All OA TOCs^▸ (Train Operating Company) should be axed and absorbed into the EC franchise. It's ridiculous to have several TOCs fighting for paths when it would be better for the passenger to have a regular clockface service run by EC. And perhaps with some Peterborough stops for connections.

[matt473]

All OA TOCs^▸ (Train Operating Company) should be axed and absorbed into the EC franchise. It's ridiculous to have several TOCs fighting for paths when it would be better for the passenger to have a regular clockface service run by EC. And perhaps with some Peterborough stops for connections.

OA provides something which should be embraced which is competition. The problem with existing TOCs is they get complacent with a feeling of a given right to charge what they want offering services they feel are appropriate. The Sunderland market has grown as a result of OA which East Coast were not really interested in with previous franchise holders. Competition forces standards to improve. Who is to say if OA operators went that services would maintained in areas that now have improved services. OA is far from perfect but it can provide opporunities that TOCs will not attempt to try. If anything when hst's become available whenever replacements arrive, the OA scene could be extremely interesting as faster stock taking up less paths could create many opportunities that franchise holders will or not or can not attempt. The current system favours nobody as innovation is stifled through unwillingness to allow new ideas or services. OA could even provide opportunities for re-opened or rail connected preserved lines to have services direct to places people wish to go such as Minehead to Paddington during the summer. Saying OA operators should be forced to close and hand over paths to TOCs will help nobody in the long run.

[ellendune]

All OA TOCs^▸ (Train Operating Company) should be axed and absorbed into the EC franchise. It's ridiculous to have several TOCs fighting for paths when it would be better for the passenger to have a regular clockface service run by EC. And perhaps with some Peterborough stops for connections.

OA provides something which should be embraced which is competition. The problem with existing TOCs is they get complacent with a feeling of a given right to charge what they want offering services they feel are appropriate. The Sunderland market has grown as a result of OA which East Coast were not really interested in with previous franchise holders. Competition forces standards to improve. Who is to say if OA operators went that services would maintained in areas that now have improved services. OA is far from perfect but it can provide opporunities that TOCs will not attempt to try. If anything when hst's become available whenever replacements arrive, the OA scene could be extremely interesting as faster stock taking up less paths could create many opportunities that franchise holders will or not or can not attempt. The current system favours nobody as innovation is stifled through unwillingness to allow new ideas or services. OA could even provide opportunities for re-opened or rail connected preserved lines to have services direct to places people wish to go such as Minehead to Paddington during the summer. Saying OA operators should be forced to close and hand over paths to TOCs will help nobody in the long run.

I have sympathy with both views. Competition is fine where there really is spare capacity but it gets very difficult where there is not.   ORR^» (Office of Rail and Road formerly Office of Rail Regulation - about) do seems to be looking at the track access charges issue.   ORCATS^▸ (Operational Research Computerised Allocation of Tickets to Services) is open to abuse by both OA and franchised TOCs. However without a card based ticketting system or tickets booked to trains - however once we have smart card ticketting ORCATS can go! Then with both these elements in place competition is at least fair. 

[Worcester_Passenger]

however once we have smart card ticketting ORCATS^▸ (Operational Research Computerised Allocation of Tickets to Services) can go!

Alas, this is not the case. The present arrangements for smartcards on the railways involve recording passengers' journeys from one station to another. If you think about some of the places where there is head-to-head competition (such as Doncaster - Kings Cross), then that doesn't tell you which train a passenger used. Perhaps we need smartcard readers at each carriage door...!

And smartcards are themselves old technology now. m-ticketing on your phone is supposed to be the future.

[ellendune]

however once we have smart card ticketting ORCATS^▸ (Operational Research Computerised Allocation of Tickets to Services) can go!

Alas, this is not the case. The present arrangements for smartcards on the railways involve recording passengers' journeys from one station to another. If you think about some of the places where there is head-to-head competition (such as Doncaster - Kings Cross), then that doesn't tell you which train a passenger used. Perhaps we need smartcard readers at each carriage door...!

And smartcards are themselves old technology now. m-ticketing on your phone is supposed to be the future.

OK once a proper smartcard system is in place. Any decade now!

[Southern Stag]

If they had been allowed a Wolverhampton and Birmingham stop once moderation of competition ended the ORCATS^▸ (Operational Research Computerised Allocation of Tickets to Services) revenue may have saved them.

I'm just checking I have read that correctly ... ORCATS (Operational Research Computerised Allocation of Tickets to Services) remains in place, right?   Are you referring to a general modernisation here which effects / will effect the GW^▸ (Great Western) area, or some specific Birmingham stuff?

Within the next franchise, how farebox revenue is distributed amongst multiple operators on certain sections of line and how the fares are set and allowed flexibility could make a huge difference to the bids - both in terms of bottom line and services suggested, bid and provided.

Yes, ORCATS remains the system used to allocate revenue for non operator specific tickets. The Virgin West Coast franchise had a clause in it which effectively prevented any other TOC^▸ (Train Operating Company) competing with them, a moderation of competition clause, that will be removed in the new West Coast franchise. It meant that Wrexham and Shropshire could not carry passengers between London and Wolverhampton, only Wolverhampton and stations towards Wrexham. It also meant the only stop they could make in Birmingham they could make was at Tame Bridge Parkway. Once the clause was gone they potentially could have carried passengers from Wolverhampton to London and introduced a more central Birmingham stop. Even if that didn't mean they carried many more passengers they would have received a share of the revenue for all the appropriate tickets that would have introduced their revenue.

[JayMac]

From The Telegraph:

Virgin's Sir Richard Branson: Government must not back unrealistic West Coast rail bid

Sir Richard Branson has complained to the Government that it risks a re-run of previous rail franchise failures if it awards the West Coast Main Line contract to an unrealistically high bid from FirstGroup.

 In a letter to Transport Secretary Justine Greening, copied to Prime Minister David Cameron, the Virgin founder claims the only way FirstGroup can justify its bid is to ^drastically cut the quality of services^.

The entrepreneur, whose Virgin Rail subsidiary has run the London to Glasgow train service for the past 15 years, is so angry at reports he has been outbid by ^1bn that he has written to ministers even before the winner is announced.

Failure to retain the franchise will end Virgin^s role as a UK^▸ (United Kingdom) train operator.

Virgin Rail, which is 49pc-owned by transport group Stagecoach, has offered the Government about ^6bn to run the West Coast services for 14 years from December. However, bus and rail operator FirstGroup is thought to have bid around ^7bn ^ equivalent to a ^500m-a-year payment to the taxpayer.

Both bids represent a big step up on the annual ^160m Virgin Rail is currently paying to run a franchise that had ^859m revenues and ^43m operating profits in the year to April 30.

In his letter, Sir Richard draws comparisons with recent failures on the East Coast Main Line, where both GNER^▸ (Great North Eastern Railways) and National Express walked out on the contract after their bids proved far too optimistic.

He claims Virgin was the runner-up bidder both times, putting in ^realistic bids after an extremely expensive tendering process^, only to be beaten by rivals that came ^nowhere close to delivering their promised plan^.

Arguing that history cannot be allowed to repeat itself on the West Coast, he says: ^We submitted a strong and deliverable bid based on improving the customers^ experience through increased investment and innovation.^

He adds: ^Our team has transformed the West Coast line over the last 15 years from a heavily loss-making operation to one that will return the taxpayer billions in years to come."

Noting how passenger numbers have risen from 14m to 30m since Virgin Rail began running the services, Sir Richard reminds the Government that critics used to say that doubling traffic on the route was "mission impossible".

Mark McVicar, a transport analyst at Nomura, said Sir Richard was ^bound to make a fuss because he always does^, adding: ^If FirstGroup has priced the risk differently you don^t need a massive difference to make ^1bn over 14 years.^

A Department for Transport spokesman said: ^We are evaluating bids and, as it^s a live competition, we cannot comment.^ FirstGroup declined to comment. Virgin would make no comment on the letter.

[6 OF 2 redundant adjunct of unimatrix 01]

M tickets are nothing more than a stop gap measure,if every single station in the uk had smart card validators and there was a universal system similar to oyster which is a proven system, then we have a viable alternative to paper tickets.... M tickets are only any good for people with smart phones and have too many things to go wrong ... Dead battery's are one ... Handing a device over to someone which is full of private data is also not a great idea

[Btline]

From The Telegraph:

Virgin's Sir Richard Branson: Government must not back unrealistic West Coast rail bid

Sir Richard Branson has complained to the Government that it risks a re-run of previous rail franchise failures if it awards the West Coast Main Line contract to an unrealistically high bid from FirstGroup.

 In a letter to Transport Secretary Justine Greening, copied to Prime Minister David Cameron, the Virgin founder claims the only way FirstGroup can justify its bid is to ^drastically cut the quality of services^.

The entrepreneur, whose Virgin Rail subsidiary has run the London to Glasgow train service for the past 15 years, is so angry at reports he has been outbid by ^1bn that he has written to ministers even before the winner is announced.

Failure to retain the franchise will end Virgin^s role as a UK^▸ (United Kingdom) train operator.

Virgin Rail, which is 49pc-owned by transport group Stagecoach, has offered the Government about ^6bn to run the West Coast services for 14 years from December. However, bus and rail operator FirstGroup is thought to have bid around ^7bn ^ equivalent to a ^500m-a-year payment to the taxpayer.

Both bids represent a big step up on the annual ^160m Virgin Rail is currently paying to run a franchise that had ^859m revenues and ^43m operating profits in the year to April 30.

In his letter, Sir Richard draws comparisons with recent failures on the East Coast Main Line, where both GNER^▸ (Great North Eastern Railways) and National Express walked out on the contract after their bids proved far too optimistic.

He claims Virgin was the runner-up bidder both times, putting in ^realistic bids after an extremely expensive tendering process^, only to be beaten by rivals that came ^nowhere close to delivering their promised plan^.

Arguing that history cannot be allowed to repeat itself on the West Coast, he says: ^We submitted a strong and deliverable bid based on improving the customers^ experience through increased investment and innovation.^

He adds: ^Our team has transformed the West Coast line over the last 15 years from a heavily loss-making operation to one that will return the taxpayer billions in years to come."

Noting how passenger numbers have risen from 14m to 30m since Virgin Rail began running the services, Sir Richard reminds the Government that critics used to say that doubling traffic on the route was "mission impossible".

Mark McVicar, a transport analyst at Nomura, said Sir Richard was ^bound to make a fuss because he always does^, adding: ^If FirstGroup has priced the risk differently you don^t need a massive difference to make ^1bn over 14 years.^

A Department for Transport spokesman said: ^We are evaluating bids and, as it^s a live competition, we cannot comment.^ FirstGroup declined to comment. Virgin would make no comment on the letter.

I agree with Branson, but it that wise?

[Super Guard]

So the point that seems to have been unanswered through the whole catering debate:  Will FG say goodbye to their GW^▸ (Great Western) bid, if they are awarded West Cost?

[JayMac]

So the point that seems to have been unanswered through the whole catering debate:  Will FG say goodbye to their GW^▸ (Great Western) bid, if they are awarded West Cost?

Who knows? I'm sure First Group would like both, but note my sig...↓↓↓ 

[EBrown]

Who knows? I'm sure First Group would like both, but note my sig...↓↓↓ 

Why wouldn't First Group be allowed both franchises? I wouldn't want another First franchise; but I've been reliably informed there is no issue in terms of a North/South monopoly.

As a side point, I've been told of rumours Arriva are not after the franchise [Greater Western]: I've also been reliably informed they will be bidding.

[JayMac]

Who knows? I'm sure First Group would like both, but note my sig...↓↓↓ 

Why wouldn't First Group be allowed both franchises?

I made no comment on First having both ICWC^▸ (InterCity West Coast) and Greater Western. Just highlighting my tips. Tips based on nothing more concrete than my own belief.

As I said; "Who knows?"

As a side point, I've been told of rumours Arriva are not after the franchise [Greater Western]: I've also been reliably informed they will be bidding.

And I was reliably informed, some months ago, by a FGW^▸ (First Great Western) Customer Host, Train Manager and on the cushions driver, that National Express had pulled out of the bidding for Greater Western.

Smoke and Mirrors.