ECML franchise fails .... again....

[Ron Ron Ron]

Will the ECML ever be a success it seems be a poisoned chalice for anyone who takes it on .....,

 

 

Depends what you consider a success to be. It is apparently profitable for the operators, just not as profitable as Stagecoach promised the DfT it would be......

 

 

As Zomboid says, it's not profitable enough to make the premium commitments.

 

If VTEC were simply required to return at least the same level of payment to the treasury, that DOR achieved over 5 years, they would probably walk it with ease.

The current situation, where it's expected VTEC will fail to meet their payment commitments, could still leave them delivering up to one and a half times more than DOR managed.

Remember also, that DOR were just an operating caretaker and didn't have to spend large amounts of money on improvements and enhancements, as required of the franchise holders.

 

 

 

.

[Coryton]

The simple answer would be to reduce cost, shipping is cheap, I'm guessing most would be surprised at just how cheap it is to ship goods around the world (by sea at any rate).

 

If you already have a factory set up to build body-shells, I can see how using that factory and shipping across half the planet could be cheaper and less risky than setting up a facility in another country, training staff and solving all the teething problems.

[Ron Ron Ron]

Making body shells in one place and transporting them to another location for assembly is often a result of the availability of very expensive, specialist high-tech fabrication plant, required to produce the aluminium and alloy bodies.

No doubt these facilities will be very expensive and have to be kept busy.

Replicating them elsewhere to produce limited numbers, without guaranteed future production would simply not fly, as a business case.

Edited December 3, 2017 by Ron Ron Ron

[Mike Storey]

Will the ECML ever be a success it seems be a poisoned chalice for anyone who takes it on ,is the decline in passengers due to  the towns it goes through not being as large as ones on the WCML .York and Newcastle being the largest whereas on the WCML there are many vibrant towns so is this why passenger numbers are down and on the west coast they are up  so will it ever change for the better.Does anyone know what things were like in BR days did the receipts cover costs or was there a profit ,and I seem to remember that the service levels were nothing like todays,

 

Yes. I was in InterCity East Coast for several years, both in Ops and then Commercial and then in GNER for a year. Leeds was the primary source of revenue, then Newcastle (with of course London being the highest of all for originating journeys). York hardly featured in originating journeys, being primarily a destination. It benefited from not having much motorway competition, other than the M1 from Leeds (although that was not as good as today), and from having relatively poor domestic air services, other than at Edinburgh. Remember it was already a 125mph route, once the HST's came in, and could further exploit timings when the 91+MkIV's arrived. We brought in the first Leeds hourly services which pretty well decimated the Leeds-London air traffic, and did much the same to Newcastle later. As Leed's star began to wane, we looked at boosting services further north, but were also caught out by the massive growth on long distance commuting from north of Peterborough, as far as from York. We never had enough trains even when I left, and I think that is still the problem now. It would appear it is the commuting element that may have reduced, as that follows the trend elsewhere. I believe WCML's business involves a lower percentage of daily users?

 

To condition your query, the ECML was the premier route in the UK in the 1980's and 1990's, which was reflected in having, by far, the highest track access charges of any route, in that they then cost to maintain for 125mph running, and they attracted premium fares compared to other routes. The WCML has overtaken that since both by acceleration and by frequencies. It does, for sure, have a greater catchment too, but was unable to fully exploit it until the West Coast Upgrade was finally completed (-ish).

 

Profit and Loss accounting was not as sophisticated as today, but with the info we had available then, it was accepted that ECML made a serious profit annually, as did InterCity as a sector. What that was, I cannot remember! But it is shown in old BRB Annual Reports, my many copies of which were jettisoned when I downsized to France.

 

So West Coast should have greater potential given its huge catchment, but it is only fairly recently that it has had the ability to extract it.

Edited December 3, 2017 by Mike Storey

[Bomag]

So West Coast should have greater potential given its huge catchment, but it is only fairly recently that it has had the ability to extract it.

 

The WCML may have traffic from the second and fourth largest English cities to London and ECML only the third but many of the ECML stations have fairly decent sized car parks which means that if going for an early train then it is not a problem (other than cost) to drive to the station from a much larger distance from the surrounding area. I woun't want to drive into the centre of Manchester or Birmingham but Leeds or Wakefield are perfectly accessible if going for the 07:00 off Leeds.

Edited December 4, 2017 by Bomag

[jamie92208]

The WCML may have traffic from the second and fourth largest English cities to London and ECML only the third but many of the ECML stations have fairly decent sized car parks which means that if going for an early train then it is not a problem (other than cost) to drive to the station from a much larger distance from the surrounding area. I woun't want to drive into the centre of Manchester or Birmingham but Leeds or Wakefield are perfectly accessible if going for the 07:00 off Leeds.

 

I live just south of Leeds and Wakefield is a much more convenient place for me to catch the train than Leeds even though it's 4 miles further.   I can be off the train in Wakefield on the way home and nearly home before the train has got to Leeds.  However due to parking costs I've now virtually stopped using VTEC and use Grand  Central instead where it's only £2 per day at Kirkgate.

 

Jamie

Edited December 4, 2017 by jamie92208

[4630]

I live just south of Leeds and Wakefield is a much more convenient place for me to catch the train than Leeds even though it's 4 miles further. I can be off the train in Wakefield on the way home and nearly home before the train has got to Leeds. However due to parking costs I've now virtually stopped using VTEC and use Grand Central instead where it's only £2 per day at Kirkgate.

 

Jamie

Another vote for Grand Central. Rather than the mileage and cost of driving & parking in Leeds, I drive to Brighouse. Parking at the station is still free all day and provided that I get there for just after 7am there’s no problem getting a space. The 07.19 gets me into Kings Cross for 10.10. Plus Grand Central fares are generally less than VTEC and the on board customer service is pretty good too in my experience. Edited December 4, 2017 by 4630

[jamie92208]

Another vote for Grand Central. Rather than the mileage and cost of driving & parking in Leeds, I drive to Brighouse. Parking at the station is still free all day and provided that I get there for just after 7am there’s no problem getting a space. The 07.19 gets me into Kings Cross for 10.10. Plus Grand Central fares are generally less than VTEC and the on board customer service is pretty good too in my experience.

 

Yes I've found Grand Central to be very good.   However on another note I was once told that Wakefield was one of the major profit generators on the ECML due to all the public sector travel, on expenses, that it generated.  With the various local authority services plus the police and police authority and one of the national Prison Governor training schools there was an awful lot of people who were entitled to 1st class travel by their terms and conditions.  I would be interested as to whether or not there was any truth  in that.

 

Jamie

[4630]

Yes I've found Grand Central to be very good.   However on another note I was once told that Wakefield was one of the major profit generators on the ECML due to all the public sector travel, on expenses, that it generated.  With the various local authority services plus the police and police authority and one of the national Prison Governor training schools there was an awful lot of people who were entitled to 1st class travel by their terms and conditions.  I would be interested as to whether or not there was any truth  in that.

 

Jamie

 

 

Intuitively, it feels right for perhaps 5-10 years or so ago when 1st class business travel, whether sourced via private or sector employers, was more common.  My sense is that employees' terms and conditions, and travel policies, are generally much tighter these days, even for people in relatively senior positions.

 

My previous private sector employer used to be very happy in the late 1990s and early 2000s to pay for a full priced open first class return from Leeds to Kings Cross regularly for me and my middle management colleagues.   The erstwhile 'Yorkshire Pullman' departure from Leeds just after 7am, non-stop after Wakefield Westgate IIRC with arrival, fortified by an at seat cooked breakfast, in 'The Cross' just after 9am.  That luxury disappeared a long time ago, along with GNER who was the breakfast provider and franchise holder at the time !

 

Next time I'm on Leeds station I must have a look at the current passenger loadings in first class on VTEC arrivals and departures just to satisfy my curiosity.

Edited December 4, 2017 by 4630

[GeoffAlan]

Oh, dear!

 

While British Railways, in its many corporate guises, got regularly panned for poor service, poor investment and truly eccentric 'planning', the beggars muddle that replaced it has not been without its problems. 

 

The question we need to ask is why other countries seem to have superior service and in many cases, lower fares. I well remember, before the opening of the Channel Tunnel, driving towards Paris with a brand new High Speed line running alongside. It was the French link to Le Chunnel, finished and in service before the Tunnel was finished. Whereas our version took ruddy ages to build, well after the opening.

 

A relative often works abroad and very often is in Holland where he catches a train from the airport which is considerably cheaper per mile/kilometer than similar services in the UK. 

[Coryton]

The question we need to ask is why other countries seem to have superior service and in many cases, lower fares. I well remember, before the opening of the Channel Tunnel, driving towards Paris with a brand new High Speed line running alongside. It was the French link to Le Chunnel, finished and in service before the Tunnel was finished. Whereas our version took ruddy ages to build, well after the opening.

 

 

Some of that is because people cherry-pick to find comparisons that make the UK look bad.

 

France may be great if you want to get a TGV to or from Paris but the railway network isn't so good otherwise.

 

I visited Toulouse a few years ago and the trains there pretty much shut down in the evening - like bus services in much of the UK.

 

They might have been OK during the day but it looked as if you needed a car if you wanted to get back from somewhere in the evening.

 

I agree the Dutch network is quite impressive.

[rockershovel]

Some of that is because people cherry-pick to find comparisons that make the UK look bad.

 

France may be great if you want to get a TGV to or from Paris but the railway network isn't so good otherwise.

 

I visited Toulouse a few years ago and the trains there pretty much shut down in the evening - like bus services in much of the UK.

 

They might have been OK during the day but it looked as if you needed a car if you wanted to get back from somewhere in the evening.

 

I agree the Dutch network is quite impressive.

The Dutch can AFFORD an impressive network, given the size of the place.

[Mike Storey]

Oh, dear!

 

While British Railways, in its many corporate guises, got regularly panned for poor service, poor investment and truly eccentric 'planning', the beggars muddle that replaced it has not been without its problems. 

 

The question we need to ask is why other countries seem to have superior service and in many cases, lower fares. I well remember, before the opening of the Channel Tunnel, driving towards Paris with a brand new High Speed line running alongside. It was the French link to Le Chunnel, finished and in service before the Tunnel was finished. Whereas our version took ruddy ages to build, well after the opening.

 

A relative often works abroad and very often is in Holland where he catches a train from the airport which is considerably cheaper per mile/kilometer than similar services in the UK. 

 

The simple answer on fares is that all (I think without exception) European railways are subsidised to a much greater extent (percentage wise) than those in the UK. For example, most of the TGV operations in France are still subsidised (the route to Lyon is one major exception), whereas all Inter City lines in the UK must pay a premium. It has been Westminster government policy for many years, to push the cost of funding UK rail from the taxpayer to the users. That has changed the contribution profile from around 50/50 to over 70% by the users now, which is in part why fares always rise just above inflation. Total costs remain high (and therefore subsidy has not reduced as much in real terms as the percentages imply) because of vastly increased usage (120% increase over 20 years), many more trains running and increasingly extra infrastructure. Many point the finger at Network Rail, but in reality, their cost base has reduced in real terms, by around 35% over the last two control periods, the greatest efficiency of any part of the railways. You would not think that when looking at the headline costs of major schemes!

 

As for better services, as someone else has said, try living over here, but not in one of France's five largest cities. You would then know just how lucky you are, high fares or not. 

[lmsforever]

The latest issue of Rail has extensive articles about the new franchise ,plus an article about Lord Adonnis back lorries over rail beause he said he was held by frieght on the rail proved otherwise.

[Richard E]

I heard rumours earlier this year from an industry source that VTEC was losing around £800k a week. That would seem to have some justification in the last set of accounts (earlier this year) from Stagecoach who then allocated £84m out of reserves to support the onerous contract VTEC has for the next two years.

 

I am not sure if it is still the case but I also have, in the back of my mind, the idea that the franchise figures were posited on a 5% per annum compound growth of user numbers and also fare rises in line with inflation +1%. That latter figure has certainly changed and I doubted, at the time, that the former would be achieved. If that growth figure is correct that gives a growth of around 28% over 5 years and 34% over 6. Actual growth is 15% over 4 years and 6 years i.e. nil growth from Q1 2015/6 to Q1 2017/8. And there have been reduced numbers throughout that period so the franchise forecasts have definitely not been seen.

 

VTEC are also quoting the failure of Railtrack to provide, on schedule, the Werrington Grade Separation project and also the fact that, so they claim, the OHLE on the ECML is life expired and requires complete renewal to avoid the failures that have plagued the line over the last 18 months.

[Pandora]

Intuitively, it feels right for perhaps 5-10 years or so ago when 1st class business travel, whether sourced via private or sector employers, was more common.  My sense is that employees' terms and conditions, and travel policies, are generally much tighter these days, even for people in relatively senior positions.

 

My previous private sector employer used to be very happy in the late 1990s and early 2000s to pay for a full priced open first class return from Leeds to Kings Cross regularly for me and my middle management colleagues.   The erstwhile 'Yorkshire Pullman' departure from Leeds just after 7am, non-stop after Wakefield Westgate IIRC with arrival, fortified by an at seat cooked breakfast, in 'The Cross' just after 9am.  That luxury disappeared a long time ago, along with GNER who was the breakfast provider and franchise holder at the time !

 

Next time I'm on Leeds station I must have a look at the current passenger loadings in first class on VTEC arrivals and departures just to satisfy my curiosity.

Back then were you expected to be productive and work  while travelling by train, or was it acceptable to your employer  to simply to travel and enjoy the ride?  Nowadays, many are "hard at it", even in standard class,  due to laptops, 4G and Wifi on board the train.

Edited December 4, 2017 by Pandora

[Pandora]

I heard rumours earlier this year from an industry source that VTEC was losing around £800k a week. That would seem to have some justification in the last set of accounts (earlier this year) from Stagecoach who then allocated £84m out of reserves to support the onerous contract VTEC has for the next two years.

 

I am not sure if it is still the case but I also have, in the back of my mind, the idea that the franchise figures were posited on a 5% per annum compound growth of user numbers and also fare rises in line with inflation +1%. That latter figure has certainly changed and I doubted, at the time, that the former would be achieved. If that growth figure is correct that gives a growth of around 28% over 5 years and 34% over 6. Actual growth is 15% over 4 years and 6 years i.e. nil growth from Q1 2015/6 to Q1 2017/8. And there have been reduced numbers throughout that period so the franchise forecasts have definitely not been seen.

 

VTEC are also quoting the failure of Railtrack to provide, on schedule, the Werrington Grade Separation project and also the fact that, so they claim, the OHLE on the ECML is life expired and requires complete renewal to avoid the failures that have plagued the line over the last 18 months.

Is it a failure of the tendering system for the franchise,  that the winning bidder produced an unrealistic bid and that a due diligence examination by the tenderer also failed to highlight the flawed commercial case  of the winner?  In the long term, it is more constructive  to accept a lower bid from a  wise and astute operator with a better chance of long-term success and lessen the risk and disruption to all parties.

Edited December 4, 2017 by Pandora

[Coryton]

Is it a failure of the tendering system for the franchise,  that the winning bidder produced an unrealistic bid and that a due diligence examination by the tenderer also failed to highlight the flawed commercial case  of the winner?  In the long term, it is more constructive  to accept a lower bid from a  wise and astute operator with a better chance of long-term success and lessen the risk and disruption to all parties.

 

I was thinking more of the fact that in order to bid for a franchise you need a crystal ball....

[Davexoc]

Back then were you expected to be productive and work  while travelling by train, or was it acceptable to your employer  to simply to travel and enjoy the ride?  Nowadays, many are "hard at it", even in standard class,  due to laptops, 4G and Wifi on board the train.

Hard at it on FB and Linkdin maybe. As for 4G, that's hardly reliable and consistent when you're stationary. Expect the liklihood of full coverage get curtailled as soon as 5G hits the airwaves...

 

Dave

[Coryton]

Hard at it on FB and Linkdin maybe. As for 4G, that's hardly reliable and consistent when you're stationary. Expect the liklihood of full coverage get curtailled as soon as 5G hits the airwaves...

 

Hmmm.

 

I often work on trains on my laptop. I generally get very good internet (as good as I need to check emails, look things up on Google and download the odd file I need) either with a 3G phone or on-train wifi. Much of the time I can't tell the difference from being in the office (which, for the record, does have a very good internet connection).

 

There are a few spots with poor coverage on the journey I usually make. But not many.

[hmrspaul]

Intuitively, it feels right for perhaps 5-10 years or so ago when 1st class business travel, whether sourced via private or sector employers, was more common.  My sense is that employees' terms and conditions, and travel policies, are generally much tighter these days, even for people in relatively senior positions.

 

My previous private sector employer used to be very happy in the late 1990s and early 2000s to pay for a full priced open first class return from Leeds to Kings Cross regularly for me and my middle management colleagues.   The erstwhile 'Yorkshire Pullman' departure from Leeds just after 7am, non-stop after Wakefield Westgate IIRC with arrival, fortified by an at seat cooked breakfast, in 'The Cross' just after 9am.  That luxury disappeared a long time ago, along with GNER who was the breakfast provider and franchise holder at the time !

 

Next time I'm on Leeds station I must have a look at the current passenger loadings in first class on VTEC arrivals and departures just to satisfy my curiosity.

I'm not sure you would learn much by looking at 1st class loadings, plenty of tickets at £20 or £25 or so, especially for those with railcards, young and old. A beer, bottle of water, couple of coffees and light meal soon cut into any profit!

 

I do agree the changes in rules about use of 1st class by government servants etc must have affected takings - in the same way that not being able to claim for train meals some years earlier must have altered the viability of full restaurant services.

 

Paul

Edited December 4, 2017 by hmrspaul

[Ken.W]

However due to parking costs I've now virtually stopped using VTEC and use Grand  Central instead where it's only £2 per day at Kirkgate.

 

Jamie

  

Another vote for Grand Central. Parking at the station is still free all day and provided that I get there for just after 7am there’s no problem getting a space Plus Grand Central fares are generally less than VTEC .

Easy for them as, as discussed a few pages ago, they don't have premiums to government or the same level of track access charges to pay.

Another factor on the ECML is it has probably the highest level of freeloader, oops 'open access', competition already, and there's due to be another one, over the core Edinburgh - London route, starting shortly after the franchise is now being terminated early. This despite the fact that network improvements necessary for the service increases VTECs growth forecasts required are not going to be completed in time. The Werrington dive under for example, it's now been decided, has to go to public inquiry (not yet even started) so may be ready in time for the franchise after next.

 

Is it just cynical to think VTEC are being let out of the franchise in 2020, just in time for the government to ensure its re-privatised (yet again, yawwwwn) before the next election?

[Richard E]

I thought the Werrington Inquiry was due to start on 21st November and last for three weeks so it should be done next week with a decision next year. Of course it could have been delayed ...

 

EDIT - the inquiry adjourned on 24th November, all the evidence having been heard. It will close formally on 15th December.

Edited December 5, 2017 by Richard E

[olivegreen]

 

 

As for better services, as someone else has said, try living over here, but not in one of France's five largest cities. You would then know just how lucky you are, high fares or not. 

 

I absolutely agree your last sentence.

 

Just a thought ...

 

On French TV news last night, in the context of the (we are asked to believe) software failure at Montparnasse over the weekend, it was mentioned that SNCF is 44 billion euros in debt. No plan whatsoever as to how that will be recovered, and yet the system outside the LGV/TGV network is dated and crumbling (their words, not mine). To restore the system, the government has said it would allocate 45 billion euros to SNCF Réseau (= railtrack-ish), spread across the years to 2022 (I may have that year wrong, but it is over a number of years at any rate).

SNCF passengers will believe it if and when when they see it.

 

It is almost political suicide here to put up train fares, which is of course one of the causes of these problems, added to that of excessive expenditure on TGV/LGV, as the French national audit office highlighted last month and as I have mentioned elsewhere in these threads…and yet the planned 12 billion euro extension of the LGV to/around Toulouse is still programmed...

 

Believe me, the other man's grass is NOT greener!

 

Mike

[DY444]

As Zomboid says, it's not profitable enough to make the premium commitments.

 

If VTEC were simply required to return at least the same level of payment to the treasury, that DOR achieved over 5 years, they would probably walk it with ease.

The current situation, where it's expected VTEC will fail to meet their payment commitments, could still leave them delivering up to one and a half times more than DOR managed.

Remember also, that DOR were just an operating caretaker and didn't have to spend large amounts of money on improvements and enhancements, as required of the franchise holders.

 

 

 

.

 

This is a key point which many seem to be missing.  VTEC has met all of its contractual payments to date and has already paid far greater premiums to the DfT than DOR did.  It is on record as saying that it will continue to do this until 2020.  That's when things start to fall apart partly because VTEC admits it was overly optimistic with its revenue projections but largely because DfT/NR will fail to deliver on the infrastructure commitments on which all the franchise bids were predicated.  For example, due to NRs inability to strengthen the power supply north of Newcastle serious consideration is being given to retaining HSTs for the additional London-Edinburgh services rather than the 91s previously proposed.  There are also reports that some IET services will have to use diesel power north of Newcastle.  That affects journey times, diagramming, fuel and maintenance costs, and service resilience and is a damning indictment of the DfT and NR.

 

It's popular to jump on the "blame the greedy private company" band wagon when these things happen.  Apparently Labour were about to launch an all out offensive on that theme until a savvy journalist pointed out to them that it was the state owned and state controlled parts that were largely to blame.  Rumour has it that they had to have this explained to them several times because they couldn't get their head round it!

 

Along with all its other incompetence the DfT seems to have a massive blindspot wrt the ECML.  They seem to have pie in the sky expectations of the sustainable revenue on the route and can't see that it has the worst infrastructure reliability of any of the erstwhile Intercity routes.  It remains to be seen whether the "virtual vertical integration" will make any difference to this latter point. 

Edited December 5, 2017 by DY444