Hammond Eggs - I've got a little secret

As Leonard Cohen used to sing: I've got a little secret!

A tune evidently close to the heart of Eye favourite Stephen 'Gone-native' Hammond, as evidenced by this written answer given on the 26th November: 

Kate Hoey: To ask the Secretary of State for Transport pursuant to the answer of 4 November 2013, Official Report, column 45W, on railways: south west, for what reasons lease costs for rolling stock are considered to be commercially sensitive. 

Stephen Hammond: The leasing costs for rolling stock are the result of negotiations between two private sector commercial entities, the train operating company and the rolling stock leasing company. Putting such information in the public sphere would give advantage to each party's competitors and hinder future negotiations between such commercial entities throughout the industry. 

Hmm... Advantage and Hinder?

Surely the name of an act in this year's DfT Christmas panto?

No matter!

Of course the real hindrance 'to future negotiations' on allocation of scarce trains is done by DfT's random-rolling-stock-cascade-generator, which inhibits the effective operation of the entire train leasing market.

A point made transparently clear from section 25 on page 9 of the summary section of the Competition Commission's 2007 'Rolling Stock Leasing market investigation'. 

Go figure!

DfT bashes the ROSCOs and adds to industry cost

Someone evidently has a sense of humour at Rail Business Intelligence!

The latest issue contains a report of a talk given to the Railway Study Association by DfT's Director Franchising, Pete Wilkinson.

He is recorded as bewailing lease costs for ex BR rolling stock:

"How come the ROSCOs get away with the price of second hand trains? It's got to stop."

Quite so Pete, quite so.

Rather elegantly RBI juxtaposed the whinings of DfT's very own Doctor Evil with a story about Eversholt refinancing £600m of senior debt; which according to CEO Mary Kenny, will allow the ROSCO "to respond to future investment opportunities."

As our American friends might say - do the math!

Such apparent naivety in understanding market value from the official charged with franchising will no doubt do much to gladden the hearts of thinly capitalised equity profiteers everywhere!

No matter.

Meanwhile, as DfT clearly has it in for the ROSCOs (again), expect fleet refurbishment to become more difficult as nervous finance houses price in political risk.

RDG parks tanks on Rosco lawns

This from Passenger Transport...

The Rail Delivery Group, the Department for Transport and franchise owning groups have begun initial discussions which could lead to train operating companies purchasing new trains directly rather than leasing them from the ROSCOs (rolling stock leasing companies).

Good news indeed.

Anything that emasculates those with a long term interest in the industry, whilst benefiting "thinly capitalised equity profiteers of the worst kind" has to be a good idea (Is this right? Ed).

Apparently First Group is already chomping at the bit to buy new rolling stock for its Great Western franchise.

According to Tim O'Toole, CEO of First Group:

“We need more trains, and we’ve made this plain to the government, and they have got to allow this to happen”.

Quite so Tim and with First Group finances in such robust health it seems such a shame that Dai Woodham is no longer in business.

UPDATE: This from Leo Pink...

Has DfT  Permanent Secretary Philip Rutnam taken a leaf from the General Galtieri Book of  Political Strategems?  

With his department's expensive in-house  procurement of IEP and Thameslink rolling stock under fire, how better to deflect criticism than attacking those nasty people in trade - the  'expensive' ROSCOs.

UPDATE: This from Ithuriel...
 
At a recent meeting of the Rail Delivery Group one topic rasied was:
Rolling stock – issues emerging on value for money.

Can it be that they have woken up to the ludicrous cost of the Great Western and East Coast Ninky Nonk train ?
 
Probably not. We suspect that the real concern is the blood-sucking rentals being charged by the Roscos for err.. Pacers.
 

Command Paper celebrates the markets!

This from Captain Deltic...

I note from section 4.67 of the Command Paper that:

Our preference would be that, building on the Competition Commission decisions and this work, operators and ROSCOs drive better value through a market-based approach.

So the ROSCOs are being encouraged to adopt market led pricing.

As in letting rolling stock fleets, which are in short supply, to the TOC offering the highest lease rental? (Probably not what DfT had in mind! Ed)