[Bucksnet]

I know the loading gauge restrictions, but bridges and the like can be rebuilt. The cost though high, is a lot lower than HS2, which a recent story claimed will have 1,100 passenger trains running 14-16 times per hour. This must be based on the totally unrealistic assumptions to try to justify the scheme. Virgin are only running 3 trains an hour now.

[Shearer]

Virgin Trains operate more than three trains an hour.
Also remember that London Midland run an intensive service to/from Euston.

Interesting point of view from very cynical Private Eye:

First Group walked away from the Great Western to avoid the premium clause in the contract (three years payments totalling £826m), triggering a re-tendering exercise. Other companies may have promised less money but would they have stayed the course?

The more I think about this, the more I think this government has learnt nothing from Major’s botched privatisation and Labour’s botched quick fixes to the railway.

GNER bid high – £1.3bn for a ten year East Coast franchise.
They defaulted.
National Express bid even higher: £1.7bn. They defaulted.
And we now expect First Group / Virgin to find £6bn/£7bn over 14 years?

[andystock]

On the subject of first group, FCC Great Northern has been really reliable for the last 6 months. Never really any problems on it, thameslink is anothet story.

[SimonS1]

The FGW situation was slightly different to the Sea Containers/National Express debacle, as they had negotiated an exit clause after 7 of the 10 years when the original agreement was signed. So they are entitled to exercise that and walk away.

The main reason I believe is that major engineering works are due on Great Western and they have learnt from the Thameslink saga that there is big reputational and business risk involved with having Network Fail doing “improvement” work on your patch.

However the fact is that almost 75% of the premiums they were due to pay for Great Western fell in those last 3 years, so you have to blame the clowns in the DfT who signed the deal in the first place.

The only thing you can be sure of is they will be bidding high to beat Virgin, the premiums will all be on a jam tomorrow basis, and it will be ‘up yours’ when they find it doesn’t stack up (as it won’t on those numbers).

[Shearer]

Virgin are not really any better when it comes to premiums/payments and I’d forgotten that First had built in a get-out clause.

A bit naive of DaFT?

[Bucksnet]

Branson to seek judicial review: –

http://www.telegraph.co.uk/finance/newsbysector/transport/9470997/Bransons-legal-threat-over-FirstGroups-West-Coast-deal.html

http://www.thisismoney.co.uk/money/news/article-2186992/Virgin-Rail-legal-fightback-FirstGroup-grab-West-Coast-contract.html?ito=feeds-newsxml

[AMcWhirter]

The winner was supposed to have been announced today. Maybe the result has been delayed owing the negative news re the fare rises ?

First Group is still favourite. Rumour has it that First, if it wins, will rebrand the West Coast franchise under the name of Horizon Trains.

http://www.telegraph.co.uk/finance/newsbysector/transport/9473715/FirstGroup-could-rename-West-Coast-service-Horizon-Trains.html

[BeckyBoop]

Better still spit the contract give half to FGW and the other to VT. It should bring better competition to the market place…

[Shearer]

Virgin’s bid at £6bn is pretty unsustainable too.

[LeTigre]

Perhaps, as Becky says, First can operate to Scotland and Virgin back.

[AnthonyDunn]

For those with access to the FT’s website there is an interesting and relevant article entitled “Branson image exposed in franchise fight”
( http://www.ft.com/cms/s/0/36bbeeac-f1c5-11e1-bba3-00144feabdc0.html#axzz24edCzRb0 ) which looks at Virgin’s operating margins over the years running the WCML and its negotiating tactics with the Department of Transport.

The final para reads:

Advocates for Virgin point to a recent survey by Passenger Focus, an independent rail watchdog, which gave the operator higher approval ratings than FirstGroup on long-distance routes. But data from the UK rail regulator have Virgin lagging behind its rival on punctuality and passenger satisfaction and leading on customer complaints per 100,000 journeys. Grievances range from bad rush hour crowding and spotty WiFi service to exorbitant walk-up fares”

[MikeReading]

Yes, Virgin has messed up but has everyone forgotten what First did to Great Western when it was awarded the current franchise? Severe overcrowding, passengers on strike…. then abandoning the franchise extension when it didn’t suit them but cheekily bidding for the new one!

Only now are they doing something to address the severe overcrowding on peak services out of Paddington that we have suffered all through the current franchise, presumably in an effort to persuade us that profit isn’t their only motive.

They refused to install wifi on their HSTs as they didn’t see any profit in it for them so it makes me laugh that they criticise Virgin’s offering. And they also tried to scrap buffet cars in favour of a trolley, so I guess that is what they mean by improved catering. Capacity on pendolinos will no doubt be increased by ripping out the majority of the tables, as they did with the HSTs. You don’t get something for nothing in this world, and First have certainly lived up to their slogan ‘transforming travel’ on the Great Western line.

[Shearer]

Ironically, First have the best catering on UK trains (paid for) on their handful of Pullman Services.

They have turned it around but did almost lose the franchise under Allison Forster. And then walked away before paying premiums.

[AMcWhirter]

“Capacity on pendolinos will no doubt be increased by ripping out the majority of the tables ….”

Well as you can see from the plan (see link below) there are not many tables in standard class in any case. And, as regular travellers will testify, standard class seating is already dense so tricky to squeeze in yet more seats.

If the “majority of tables” are removed from first class then would the price of a first class ticket be justified ?

Pendolino seating plan:

http://www.virgintrains.co.uk/assets/pdf/global/seating-plan.pdf

[SimonS1]

Interesting article in today’s FT. It basically says Virgin have earned a net margin of 6.6% pa during their franchise. The First Group bid is based on a net margin of 5.5%.

Both of these are decent returns for a business that takes limited risk – track and rolling stock costs largely fixed, no competition until at least 2015 and income subject to a cap and collar.

However if First are willing to operate to a smaller margin it explains why they can pay more to the DfT and thus outbid Virgin.

[Author]

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