West Coast Main Line decision cancelled

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This topic contains 5 replies, has 4 voices, and was last updated by  transtraxman 5 Oct 2012
at 22:10
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  • Anonymous

    tiggerbrown
    Participant

    http://www.itv.com/news/story/2012-10-03/west-coast-decision-cancelled/

    The competition to run trains on the West Coast Main Line has been cancelled following the discovery of significant technical flaws in the way the franchise process was conducted, Transport Secretary Patrick McLoughlin announced.


    tiggerbrown
    Participant

    openfly
    Participant

    Straight out of Yes Minister!


    Cedric_Statherby
    Participant

    This is of course a major embarrassment for the government, and it is typical of this government that they are seeking to put the blame on the civil servants involved. The argument that “ministers do not have time to scrutinise everything that goes on in their department” is a farce – this was one of the most high-profile decisions the DfT had on their agenda for the whole year! If ministers were not watching very closely a decision on such an important part of transport policy, with billions of pounds at stake, what are they doing?

    But on another level this was very predictable, and shows the huge challenge of running such tenders. In any such tender, the incumbent is at a major disadvantage: the challenger can promise the moon, but the incumbent cannot easily match them. If they try, and promise the moon as well, then the natural question is “why have you not done this during the lifetime of your current tender?”, while if they submit a more realistic bid it looks dull.

    This is exactly what seems to have happened here. FirstGroup’s bid was “aggressive” (code for very, perhaps unrealistically optimistic in its promises) and Virgin Trains either had to match it (not possible because it would lay them open to the question above) or be more sensible while explaining why their bid was more realistic. They chose the latter.

    The problem with this approach, which is the more honest one, is that it relies on the person receiving the tenders being able and willing to assess the tenders competently. And the UK government seems to be extremely bad at assessing tenders realistically.

    We all know why this is: it is because all government departments (under the direct orders of the Treasury) have an over-reliance on cost as the only arbiter of government tenders. They overweight price factors in any tender and underweight everything else, including an assessment of how realistic or risky the bid is.

    HM Treasury call this “ensuring value for the taxpayer”. The rest of us call it “penny wise, pound foolish”. And once again – as it has so often in the past – it has blown up in the government’s face.

    But until we get a sensible policy from the Treasury, rather than a simplistic one-dimensional focus on cost rather than value, nothing will change and the British taxpayer will continue to pay for the incompetence of those in authority.


    transtraxman
    Participant

    Well said.

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