West Coast Main Line open-access bid rejected

[DavidB-AU]

BRITAIN's Office of Rail Regulation (ORR) has rejected proposals by Arriva subsidiary Great North Western Railway (GNWR) to introduce long-distance open-access services from London to Huddersfield, Leeds, and Blackpool via the West Coast Main Line (WCML).

 

http://www.railjournal.com/index.php/main-line/west-coast-main-line-open-access-bid-rejected.html

[mjkerr]

Yet another open access operation rejected due to a response from the DfT that revenue of the existing franchise would be affected
Like, doh!
If these open access operators want to compete then they need to come up with innovative new routes, not overlapping existing ones

[Xerces Fobe2]

The farce of railway priviisation a closed shop with competion stifeld and passengers having to face ever increasing fares rises underpinned by a grossly incompetent infrastructure company.

 

ORR Office of Rail Restriction!

[mjkerr]

ORR Office of Rail Restriction!

Needs to be renamed from 06 April 2015 as responsibility will include Strategic Road Network Monitor (Highways England)

DfT by the back door

May as well also merge them with the CAA

Oh, that would then be the OTR (Office of Transport Regulation)

[jonny777]

I thought that one of the founding principles of capitalism was to keep prices down by encouraging competition.

[woodenhead]

If you read the article, it is more than just revenue loss for Virgin.

 

There is the matter of delays in the electrification program, capacity on the Trans Pennine route plus potential issues at the southern end of the WCML if the timetables cannot be reworked satisfactorily.

 

Then of course there is HS2 which was not mentioned but will place severe restrictions on Euston for a few years to come once they begin rebuilding Euston and if I recall the open access operator was suggesting they might terminate trains at Queens Park - a budget airline trick if ever there was one, we'll get you somewhere in London, just not a main station.

 

Course one might argue that the level of service on the WCML constrains open access opportunities by using up available capacity and Virgin run half empty trains knowing this.

[Fat Controller]

I thought that one of the founding principles of capitalism was to keep prices down by encouraging competition.

That's just what they tell you...The usual cycle is that when prices are high for a good, then new entrants come into the market; competion forces prices down, so that the least-successful competitors withdraw from the market/ go bust. Then the surviving competitors put their prices up, and it starts all over again.

For it to be perfect competition, access to the market for new entrants has to be unrestricted, and the cost of entry has to be low; oh, and the customer has to be aware of all the possible price and good combinations. The reality is regulated entry, limited supplies of available rolling stock, and a Byzantine fare structure...

[Reorte]

Yet another open access operation rejected due to a response from the DfT that revenue of the existing franchise would be affected

Like, doh!

If these open access operators want to compete then they need to come up with innovative new routes, not overlapping existing ones

I'm not sure if you're defending or supporting that position there!

 

Both innovative new routes and competition on existing ones would be welcome IMO (I've been known to get off TransPennine trains as soon as possible even if I could've stayed on it for my whole journey), although I've never even tried to work out how the revenue is worked out on non-train-specific tickets where there's a choice, which could affect the decision (I've decided in advance that I probably won't be able to get my head around it).

[Bernard Lamb]

If you read the article, it is more than just revenue loss for Virgin.

 

There is the matter of delays in the electrification program, capacity on the Trans Pennine route plus potential issues at the southern end of the WCML if the timetables cannot be reworked satisfactorily.

 

Then of course there is HS2 which was not mentioned but will place severe restrictions on Euston for a few years to come once they begin rebuilding Euston and if I recall the open access operator was suggesting they might terminate trains at Queens Park - a budget airline trick if ever there was one, we'll get you somewhere in London, just not a main station.

 

Course one might argue that the level of service on the WCML constrains open access opportunities by using up available capacity and Virgin run half empty trains knowing this.

 

 

 

Then of course there is HS2 which was not mentioned but will place severe restrictions on Euston for a few years to come once they begin rebuilding Euston and if I recall the open access operator was suggesting they might terminate trains at Queens Park - a budget airline trick if ever there was one, we'll get you somewhere in London, just not a main station.

 

 

Funnily enough when the last rebuild of Euston was taking place suburban trains did use Queens Park.

Very useful it was too for many commuters on the southern section of the WCML.

Bernard

[Gwiwer]

Blackpool via the WCML is perfectly legitimate but Leeds and Huddersfield?

 

As the Irishman was reputed to have said when asked the way to Dublin "Well if I were going there I wouldn't be starting from here"

 

Those are surely better and more efficiently served via the Midland or ECML routes, depending of course upon intermediate calls also in the plan.  

 

I am not in any way defending the obstruction of free competition.  But I do agree that there will be major constraints placed upon the WCML by the construction of HS2 in terms of capacity at the London end.  Some traffic might once again go onto the Marylebone route and some trains could potentially use Queen's Park as a terminus.  A shame perhaps in this context that there is no longer an option to route anything via Primrose Hill into Broad Street as was once the case.

 

I can see a valid argument for rejection based upon piggy-backing upon Virgin Trains' investment in the WCML which does not exactly compare with the situation on the ECML where open-access operators arrived long after the route upgrades and the Mk4 rolling stock the major player uses.  I can see a potential argument for rejection of Leeds / Huddersfield as not best suited to the WCML.  

 

VT have themselves only just been allowed back into Blackpool.  A fair and open process would allow another operator the same all things being equal but not perhaps in closely-matching time slots.  Competition is one thing but if the rail industry has watched the post-privatisation bus industry (and many franchises are run by operators of both bus and rail) they will have seen that no-one benefits in the long term from trying to run 3 minutes ahead of the competition.

[pete_mcfarlane]

Yet another open access operation rejected due to a response from the DfT that revenue of the existing franchise would be affected

Like, doh!

If these open access operators want to compete then they need to come up with innovative new routes, not overlapping existing ones

The challenge there is to come up with a 'new route' that isn't just a case of running up the ECML or WCML for a couple of hundred miles and then heading up some branch or secondary line to a city that isn't currently served by the franchised operator. But these are the only viable routes for an open access operator. 

 

Perhaps the solution is to plan this in to the franchise renewal process. So when the franchise is relet there will be (for example) 5 daily paths up for grabs by open access operators, and the bidders have to take this in to account when doing their figures. 

[The Stationmaster]

Alas I think it is yet again really a case of DafT being afraid of the Virgin combine.  Virgin have consistently tried (and succeeded) to maintain the status quo regarding moderation of competition on the WCML and this is in reality just another example of it.  NR say that pathing would be possible notwithstanding the busy southern end of the WCML and that is really what any technical argument boils down to, and that is also what any open access/moderation of competition argument should boil down to if there is to be any of the much vaunted 'competition' actually visible to the ordinary passenger or potential train passenger.

 

As long as certain folk have the ear of DafT or have a real or imagined PR presence in the public and Parliamentary arena we will not see open access where it would be in competition with such people even where it is technically feasible in railway operating terms.  It will be interesting to see what happens when the Virgin labelled combine gets onto the ECML and comes up against existing open access competition which it will be unable to shift off the network.

[pete_mcfarlane]

As long as certain folk have the ear of DafT or have a real or imagined PR presence in the public and Parliamentary arena we will not see open access where it would be in competition with such people even where it is technically feasible in railway operating terms.  It will be interesting to see what happens when the Virgin labelled combine gets onto the ECML and comes up against existing open access competition which it will be unable to shift off the network.

Obviously this is a completely different situation from when *his* new start-up airline encountered real or imagined anti-competitive practises from BA. 

[APOLLO]

I thought that one of the founding principles of capitalism was to keep prices down by encouraging competition.

 

The founding principle of capitalism is to part you from your money.

 

Brit15

[Nile_Griffith]

I thought that one of the founding principles of capitalism was to keep prices down by encouraging competition.

 

 

Oh! I got it wrong then. My own experience of it all suggested that one of the founding principles of capitalism was to keep prices as high as you feel your customer can tolerate.

[Xerces Fobe2]

I thought that one of the founding principles of capitalism was to keep prices down by encouraging competition.

 

 Surely - To trouser as much as you can, whilst doing nothing of value yourself ! 

[roythebus]

Clapham Junction to Blackpool/Leeds/Huddersfield via the WLL?

[mjkerr]

I'm not sure if you're defending or supporting that position there!

It's all to easy to suggest a route, Network Rail confirm there are paths, but DfT respond that the existing franchise holder would be affected and their revenue reduced

 

We've seen this all too often, and the open access operators haven't learnt to be more innovative

It was obvious the GNWR (Alliance Rail) application was going to fail, as they were competing directly with a franchise between London Euston, Milton Keynes, Nuneaton and Preston

Their previous application to operate services between Glasgow, Carisle and Leeds also failed, as this was in direct competition with three franchises, so this latest one was no surprise

 

The main issue is such services have to start at end at major terminus, and these are already covered by the franchises

There were great concessions in approving the Grand Central trains operation, and we know what a farce that was

I personally think this application would have been approved had the service not called at York, and this is where GNER objected (and probably in turn cost them the franchise)

It is now the case that DfT makes these representations

 

With this precedence this is why the Wrexham & Shropshire service succeeded in commencing

Sadly the necessary connections had to be excluded, in turn affecting their revenue and profitability, but the same would have been argued by other franchises had they been included

It was a shame the service had to pass through Birmingham without stopping, as this would have introduced some new connections, but again competing with at least two franchises

 

Therefore if the open access operators want approval they need to have a service that overlaps two franchises, without directly competing

Blackpool to Euston is clearly one such case

However, why not Blackpool to Paddington?

There is no direct competition with Cross Country until reaching Birmingham, but there would be competition between Blackpool and Preston and again between Oxford and Paddington (and other routes are available), so the solution there is to restrict to pickup / set down only

Blackpool - Preston (restricted) - Oxford (restricted) - Paddington

I appreciate there aren't a lot of station stops, but this has the least impact on existing franchises such that the DfT cannot raise a complaint

[roythebus]

Surely the reason for privytisation is to ENCOURAGE competition not stifle it? Like it has in the bus industry?

[Wheatley]

I thought that one of the founding principles of capitalism was to keep prices down by encouraging competition.

 

That only works where you have a completely level playing field, like supermarkets. Their rules are the same for everyone - i.e. as long as their lasagne isn't full of horse meat and they aren't fiddling the books it's up to the supermarkets what they sell, where and at what price. If they make a profit they win, if they make a loss they lose.

 

However, the railways are privatised, not deregulated. The DfT can hardly allow everybody and his dog to go Orcats raiding all over the place whilst propping up the franchised operators to the tune of £3bn a year. If you want free competition on the rails then fine, lets have it, but make it a level playing field, take away all the subsidy, get rid of the franchising system, auction the paths to the highest bidder, and leave 'socially necessary' but loss making services to be sorted out by 'the market'.

 

I expect the result would make Serpell Option A look optimistic.   

[Pacific231G]

I thought that one of the founding principles of capitalism was to keep prices down by encouraging competition.

Oh I think Terry Pratchett got this about right in Going Postal. in the words of the arch villain Reacher Gilt to his bookkeeper

"The object of business is not to offer the best service; it is to offer the only service"

[Fat Controller]

That only works where you have a completely level playing field, like supermarkets. Their rules are the same for everyone - i.e. as long as their lasagne isn't full of horse meat and they aren't fiddling the books it's up to the supermarkets what they sell, where and at what price. If they make a profit they win, if they make a loss they lose.

 

However, the railways are privatised, not deregulated. The DfT can hardly allow everybody and his dog to go Orcats raiding all over the place whilst propping up the franchised operators to the tune of £3bn a year. If you want free competition on the rails then fine, lets have it, but make it a level playing field, take away all the subsidy, get rid of the franchising system, auction the paths to the highest bidder, and leave 'socially necessary' but loss making services to be sorted out by 'the market'.

 

I expect the result would make Serpell Option A look optimistic.   

Even the supermarkets don't operate a level playing field; they rely on the imperfect market knowledge of their customers (who are probably not aware of prices of comparable products in other shops) as well as using their power to bully (I can think of no other term) suppliers into discounting heavily (even if it means producing at a loss) if they are to have their products on the shelf. Even if their suppliers agree to supply, they then find they are forced to wait extended periods for payments. Try asking the supermarket if you can pay them in three months, and see what happens..

As for competition in the bus industry... I haven't noticed any operator apart from East Kent (Stagecoach) in this corner of England; compare this with pre-deregulation Llanelli in the mid-1970s, where there were four or five independent bus companies in a town of comparable size to Folkestone. 

[Fat Controller]

What is an innovative new route? 

One word too many..

[Oldddudders]

Stifling competition in the railway is hardly new, be it by fair means or foul.

 

After all, in the halcyon days of the C19, that era when everything in the railway garden was simply perfect, the Brighton and South Western railways fought a pitched battle - with bruisers and thugs - over access to Havant. Chaining your engine to the rails might have been seen as a mite provocative on the day, too.

 

And, on an altogether more serious level, how many unnecessary lines were built because "open access" wasn't forthcoming from the shower that had got their line to the town or city first? Brian (Fat Controller) mentions buses in East Kent, where the SER and the LCDR almost bankrupted each other in their bids to have access to key towns like Maidstone and Canterbury.

 

And did the Big Four welcome incursion from each other using "innovative routes" into their major centres? History suggests not.

 

And ask any Southern Region person about what the Western Region "did" to the former LSWR W of E mainline after taking it over, so even revered (?) BR wasn't up for competition either.

 

It is easy to blame the politicians, most of whom have too little time to really understand the complexity of the issue, or the civil servants, trying to make bricks with indifferent straw when their political masters may be "bought", as they always could be.  I just think nothing much has changed, that's all.

[mjkerr]

What is an innovative new route? 

See the final paragraph in reply #18