Stagecoach Lose EMT to Abellio / Disqualified from 3 Franchises

[royaloak]

On 21/08/2019 at 23:29, mdvle said:

As for the 30 year lifespan of trains, I wonder if that is even still true?  It may be a case that all the technology on board means that it is easier/cheaper to build a new train than to try and keep these newer trains in service past 15 years...

GWRs sHitachis are on a 27.5 years lease.

[david.hill64]

10 hours ago, mdvle said:

 

But the Vivarail example only exists because LU went with replacement instead of rebuilding ...

 

The essential problem, as mentioned by others, is with many of the systems needing complete replacement you are now talking about taking the train / unit out of service for an extended length of time.  This in turn means that to rebuild an entire fleet in any reasonable time frame you need a large number of units out of service, and with the lack of spare units this simply isn't feasible.

 

Hence the move to new build after shorter periods of time.

There is always a proportion of the fleet designated for maintenance. In addition to the examples Jim quoted, the railway managed serious re-engineering of HST and 91’s. It can be done. 

 

The game changer has been DfT’s sudden obsession with new fleets. The reasons for this are unclear though I wonder if it was a misguided attempt to spite the hated ROSCOs. The effect has been to drive up lease costs for new stock that are no longer guaranteed a book life appropriate to their condition. 

[RANGERS]

6 hours ago, david.hill64 said:

There is always a proportion of the fleet designated for maintenance. In addition to the examples Jim quoted, the railway managed serious re-engineering of HST and 91’s. It can be done. 

 

The game changer has been DfT’s sudden obsession with new fleets. The reasons for this are unclear though I wonder if it was a misguided attempt to spite the hated ROSCOs. The effect has been to drive up lease costs for new stock that are no longer guaranteed a book life appropriate to their condition. 

New trains return more votes at elections...

[Sir TophamHatt]

On ‎22‎/‎08‎/‎2019 at 13:42, jools1959 said:

 

From what I learned from some Hull Trains drivers earlier this year when they were training on HST’s and they couldn’t wait to get rid of the 180’s.  When I asked where they were going, they laughed and said “Grand Central and good riddance lol”.

I can imagine they will eventually end up there.

[caradoc]

1 hour ago, RANGERS said:

New trains return more votes at elections...

 

In sufficient numbers to influence the result ? I think most voters base their decisions on factors other than the age of their local trains.

 

 

[david.hill64]

1 hour ago, RANGERS said:

New trains return more votes at elections...

The average punter cannot tell the difference between a good refurbishment and new!

[caradoc]

1 minute ago, david.hill64 said:

The average punter cannot tell the difference between a good refurbishment and new!

 

My local trains in Scotland have recently seen 40-year old Class 314 sets replaced by 10-year old Class 380 sets, which are a step change in comfort and are effectively 'new' to most passengers, however that has not persuaded me to vote for the SNP next time (however not even a free 5-minute interval non-stop Pullman service would induce me to do that !)

 

[RANGERS]

Abellio have gone public with plans to use the Clacton line class 360s for the MML and as expected, commuters aren’t happy - https://www.northantstelegraph.co.uk/news/traffic-and-travel/corby-and-wellingborough-rail-commuters-air-concerns-over-downgrading-of-services-1-9039735

 

Although the intention is to upgrade  the 360s to allow 110mph running, that’s believed to be under review as with 5 stops, the scope to maximise the 110mph to any great effect is much reduced.

 

The likelihood seems that they will remain as 100mph and that the standard journey time will increase from 75 mins to 90+ to Corby with the additional stop, not that 110mph would do much for that anyway.

 

The cost will inevitably become an issue, annual cost per mile to Bedford is £98 per mile whereas to Corby it’s around £105. Abellio have so far failed to answer any questions on this.

Edited August 28, 2019 by RANGERS

[ess1uk]

https://www.bbc.co.uk/news/business-51170664

in court later

[pete_mcfarlane]

I'm still struggling to understand what grounds they have for challenging the Government, other than 'we don't like the decision so we want a judicial review'. 

[The Stationmaster]

2 minutes ago, pete_mcfarlane said:

I'm still struggling to understand what grounds they have for challenging the Government, other than 'we don't like the decision so we want a judicial review'. 

I wouldn't be surprised if that comm ent sums it up.  The. crunch will be easy to see if the numbers are made public - all anybody needs to know is the actuarial deficit/surplus in that particular section of the pension fund when the franchise started and ended.  if nothing was done to address an existing deficit or the deficit grew over the period of the franchise then it's pretty clear the franchisees were not carrying out their duty (legally stated or otherwise) to the pension fund.  And if in, say the case of WCML,  you then compare that with the amount of money taken out by the franchisees you will get the answer to just how good, bad, or indifferent they were in respect of their employer obligations,

 

I don't know off hand how any deficits in the BR fund were divided at the time of privatisation but presumably it related to staff numbers and number of existing pensioners.  Thus the amount taken on by each franchise would, I presume,  have varied but in some respects that didn't matter because the number of employed people on their books also varied,  If the employer in the section of the fund I belong to could get together with the trustees and take steps to help get the fund back into actuarial surplus, and keep it there, I can't see what would prevent the employer in any other section doing exactly the same.

 

Am I missing something or is the bearded one missing something?

[Oldddudders]

19 minutes ago, pete_mcfarlane said:

I'm still struggling to understand what grounds they have for challenging the Government, other than 'we don't like the decision so we want a judicial review'. 

OTOH, while I see what you mean, the billions allegedly missing from the pension funds have presumably accumulated over the last 23 years, unchecked by the TOCS' financial minders, which I take to be DFT, on behalf of HM Treasury. I think there is plenty of evidence that the franchising process is simply too complex for the civil servants. A parallel might be drawn with recent history of difficult IT projects let for the Government, suggesting that the private sector simply has more experience than the state in tying down the detail of these contracts.

[DY444]

1 hour ago, pete_mcfarlane said:

I'm still struggling to understand what grounds they have for challenging the Government, other than 'we don't like the decision so we want a judicial review'. 

 

I believe the gist of it is that Stagecoach and Arriva allege that the DfT moved the goalposts wrt to the pension requirements and then adjudicated the bids on the basis of their revised position rather than the one which was bid against.  In other words the DfT did not operate the adjudication process in a fair and reasonable way.

[mdvle]

3 hours ago, Oldddudders said:

 A parallel might be drawn with recent history of difficult IT projects let for the Government, suggesting that the private sector simply has more experience than the state in tying down the detail of these contracts.

 

Which would likely be false given the number of IT projects in the private sector that fail.

 

Suspect it is likely simply more a case that government projects are simply more visible.

[Siberian Snooper]

I'm surprised that the pension fund was entrusted in the franchisees, when the government "privatised the Royal Dockyards the pension funds were entrusted to trustees for each 'yard. The trustees were drawn from the MoD, management and the workforce, in the form of senior union reps. Up until the banking crash the fund was making some pretty large profits, which have helped it through the leaner years, post the crash and although the overall fund has shrunk, there's still more than enough in the kitty. The various management's weren't allowed to get their hot and sweaty mitts on it.

 

 

[DY444]

Being reported that Arriva has reached an out of court settlement with the DfT.  Terms confidential.  Stagecoach continuing with the action.  A settlement (albeit with only one party) suggests that the DfT is not 100% confident of its position.

Edited January 21, 2020 by DY444

[RANGERS]

1 hour ago, DY444 said:

".....suggests that the DfT is not 100% confident of its position....."

Sounds like an interesting concept...

[The Stationmaster]

5 hours ago, DY444 said:

Being reported that Arriva has reached an out of court settlement with the DfT.  Terms confidential.  Stagecoach continuing with the action.  A settlement (albeit with only one party) suggests that the DfT is not 100% confident of its position.

Mind you it does happen to be the party with various 'problems' on a franchise  so some sort of horse trading should not be ruled out.

[The Stationmaster]

21 hours ago, Siberian Snooper said:

I'm surprised that the pension fund was entrusted in the franchisees, when the government "privatised the Royal Dockyards the pension funds were entrusted to trustees for each 'yard. The trustees were drawn from the MoD, management and the workforce, in the form of senior union reps. Up until the banking crash the fund was making some pretty large profits, which have helped it through the leaner years, post the crash and although the overall fund has shrunk, there's still more than enough in the kitty. The various management's weren't allowed to get their hot and sweaty mitts on it.

 

 

All sections of the pension fund are managed by trustees which normally includes representation from staff, pensioners, and management.  So in the case of a train operator it would be their, i.e. the franchisee, who are the management part.  The trustees - assuming all sections of the fund have similar arrangements - are responsible for, among other things, the ability of their section of the fund to meet its obligations.  E EWhere there is no current franchisee presumably DfT provide the equivalent of a management representative.

 

The trustees have the power to propose action to ensure their section of the fund remains solvent and able to meet its obligations but if there is call on increased contributions from the employer (i.e. the franchisee) I'm not at all sure what the legal position is if they refuse to change their level of contributions.  I'm in a section which covers a non-franchised passenger operator and when an actuarial assessment showed there was a shortfall the trustees agreed with the management that both staff and management contributions would be increased for a certain period of time in order to get the section back into actuarial surplus - which they did.  On the face of it I cannot see how the situation would be any different in the case of a franchised passenger train operator or any other section of the fund - contributions from both staff and management are increased to whatever level it takes and for how long it takes to restore that section to an actuarial surplus.   One important point here is that when he was Chancellor Gordon Brown changed the rules regarding the shortfall/surplus situation in pension funds and that immediately moved some funds from a healthy surplus to a shortfall, despite nothing else changing in terms of the amount of money they had invested.

 

That can obviously only be a current thing during the term of a franchise. I can't see how a franchisee could be lumbered with a longer term situation because when their franchise ends they are no longer part of the trustees of the fund and that ball passes to the next franchisee.  But equally surely they can't be allowed to leave the fund in any worse state than it was when they took over the franchise?

[Jonboy]

There are lots of oddity's in the pension world at the moment, such as https://www.heraldscotland.com/news/17960800.retired-plumber-fears-financial-ruin-1-2m-pension-scheme-debt/ .

[DavidB-AU]

Stagecoach takes rail franchise row to High Court

 

https://www.bbc.com/news/business-51170664

[pete_mcfarlane]

I'm  intrigued by this quote from Stagecoach's learned friend:

 

Quote

He added that the procurement process was "shrouded in secrecy" 

 

Surely the driver for this secrecy is firms like Stagecoach not wanting the commercially sensitive information  in their bids made public, rather than some sinister Government cover-up? 

Edited January 24, 2020 by pete_mcfarlane

[DY444]

7 hours ago, pete_mcfarlane said:

I'm  intrigued by this quote from Stagecoach's learned friend:

 

 

Surely the driver for this secrecy is firms like Stagecoach not wanting the commercially sensitive information  in their bids made public, rather than some sinister Government cover-up? 

 

He's not talking about matters of commercial sensitivity, he's referring to the actual bid evaluation process itself ie how the bids are evaluated.  That should be both transparent and consistently applied to all bids. 

 

The crux of this case is that the DfT are alleged to have moved the goal posts and at least two of the bidders were not aware of that.  That should not happen if your process is transparent and fair.  When Virgin overturned the decision on the WCML franchise in 2012 the key point there was that the process had not been applied the same way to all bidders.  Then and now it was nothing to do with what was actually bid and everything to do with the way the DfT assessed what was bid.

[pete_mcfarlane]

1 hour ago, DY444 said:

 

He's not talking about matters of commercial sensitivity, he's referring to the actual bid evaluation process itself ie how the bids are evaluated.  That should be both transparent and consistently applied to all bids. 

 

The crux of this case is that the DfT are alleged to have moved the goal posts and at least two of the bidders were not aware of that.  That should not happen if your process is transparent and fair.  When Virgin overturned the decision on the WCML franchise in 2012 the key point there was that the process had not been applied the same way to all bidders.  Then and now it was nothing to do with what was actually bid and everything to do with the way the DfT assessed what was bid.

 

But you'll struggle to make the decision making process entirely transparent if some of the information it handles can't be made public. If the bids weren't treated as confidential, then the DfT could (or be forced to) release all of the information about how they were assessed and how the final decision was made. 

[DY444]

34 minutes ago, pete_mcfarlane said:

 

But you'll struggle to make the decision making process entirely transparent if some of the information it handles can't be made public. If the bids weren't treated as confidential, then the DfT could (or be forced to) release all of the information about how they were assessed and how the final decision was made. 

 

You're conflating the definition of the process with the results of applying the process to the individual bids.  The former requires no disclosure of commercial information.  Stagecoach's grievance is that aspects of the pension evaluation criteria were changed by the DfT after the bids were submitted and without the bidders being advised.  Stagecoach say that they were disqualified as a result of the changed criteria and that that is unreasonable because the criteria should not be changed without all concerned being notified (which would make the process transparent) and being given the opportunity to revise their bid or withdraw should they choose to thus avoiding futile ongoing expenditure.  That notification of changed criteria could have happened without the DfT giving away any commercial information.

Edited January 24, 2020 by DY444