Pointless signs - Slough

IEA's Wellings boots commuters off seats

The friend of railway users across the nation has offered its latest wheeze to delight regular travellers.

Not content with providing spurious costings for HS2, the Institute of Economic Affairs latest brainwave is to call for less seats on trains (Less seats? Try fewer pounds in your pocket! You're fired!!! Ed)

According to the Metro...

Seats should be ripped out on the most overcrowded train services to create cheaper, standing-only carriages, a report suggests.
The return to third-class travel would see passengers pay up to 20 per cent less than in standard class, under the Institute of Economic Affairs proposal.

Head of transport Dr Richard Wellings said: ‘For too long, the government has squandered taxpayers’ money on the wrong transport projects and failed to deliver value for commuters."

Forcing more passengers to stand? A novel way to 'deliver value for commuters'.

The story of a pole - McNulty cost creep explained

This from Citizen Smith...

Once there was a mirror on a pole on a platform.

Then bits of it were painted yellow, then a small fence was put up round it. Bits of the fence were also painted yellow.

Then someone realised the fence meant that anyone passing the mirror might walk in an area behind a yellow line.

They put up signs so that people walked the other way. They made sure these signs were branded.

Great Western Route and FGW - delivering a Value for Money railway...

Just fancy that! All in it together...

This from The Inchworm...

The new year has seen the publication of some interesting statistics on the costs of Britain's railway.

Eye readers may wish to file these under 'Just Fancy That!'.

• Annual cost of Simon Burn's government chauffeur - £80,000
• 7 day season ticket from Chelmsford to London - £88.50

• Average cap on regulated fares - 4.3%
• Average cap on freight track access charges for CP5 - 23%

• Network Rail's future annual contribution to ORR's costs - £18m
• Network Rail's future annual contribution to RDG's costs - £1.4m

• Expected annual revenue from increased charges for coal trains - £22m
• Transport Committee's estimate of cost of WCML fiasco - 'well in excess of £40m'

And finally, the funding gap between Network Rail's Strategic Business Plan and Government SoFA is a massive £4.9bn!

McNulty is dead! Long live McNulty!

UPDATE: This from a Dr Calculus...

I wonder if this reflects the biggest disparity in numbers since the 'Victorian Era'?

UPDATE: This from Network Rail...

Inchworm says the difference between our Strategic Business Plan (SBP) and the Statement of Funds Available (SoFA) was £4.9bn, suggesting that there is a funding gap.

This is not the case, although given the complexity of the financing structure, I can understand the error.

We have said we can deliver the plans from the funds available and we will.

The reason the SoFA and SBP are different is they talk about different things.

For instance, the SoFA does NOT include enhancements and the SBP contains £12bn of them. Similarly, the SBP does not include debt servicing, but the SoFA does.

And just to be clear I'm not trying to pull any wool over Inchworm's eyes, even if you build those factors in to the calculations, the SBP still comes out well under the SoFA.

In fact, the SBP is (very roughly) one third ops/maintenance, one third renewals and one third enhancements.

I've done a fag packet calculation and I still can't reach a £4.9bn gap, even theoretically.

For more information I commend you to pages 80 to 83 in the Strategic Business Plan.

UPDATE: Inchworm responds:  

These numbers come from p58 of the same document (bottom para, summary):

This quotes the SoFA as £28.5bn and the SBP costing £33.4bn, hence the gap of £4.9bn.

ORR makes grab for fares regulation

This from Sue Persaver...

In her evidence at today's Transport Select Committee, Anna Walker, Chair of ORR suggested that she was keen to take on the role of regulating fares.

This is the same ORR who's summer consultation on freight suggested that an increase in charges leading to a 10% per annum reduction in traffic levels was perfectly acceptable.

Passenger Focus and Rail User Groups may wish to start panicking now.

Of course should Anna succeed in her audacious bid we may need to think up a new nickname for 'Right Price', her CEO.

Perhaps 'Price D'Off' would be a more fitting soubriquet?

DfT: Throwing good money after...

According to Her Majesty's Daily Telegraph...

The Department for Transport has asked headhunters to search for senior managers who could run the West Coast rail franchise on behalf of the state-backed Directly Operated Railways (DOR) from December 9.

A spokesman for the DfT said the decision to appoint recruiters was part of the department’s “contingency planning” to determine whether a senior management team could be found quickly enough if the DOR is put in charge of the franchise.

What a lot of wags there are in the Department for Transport!

Safety cases not withstanding.

And precisely how much is this costing and who is paying?

UPDATE: This from Captain Deltic...

Is this the smoking gun that proves an 'ABB' mindset really exists?

A Conservative vision for the railways. Be afraid...

Oh dear!

In just 24 hours ConservativeHome has gone from the sublime to the ridiculous.

Yesterday it reported on the growing pressure from Tory MPs to peg rail fare increases at RPI+1.

So far so good.

Today, alas, there is piece from Tim Leunig, Chief Economist of CentreForward. offering his thoughts on how to keep the cost of the railways and fares increases down.

Aside from usual suggestions from the Mad Vulcan School of Transportation Management (eg abandon electrification and HS2, close stations and lines, encourage more car use, stuff the North etc...) Leunig comes out with this particular gem:

"Create a third class on London commuter routes – standing room only. Taking seats out is much cheaper than lengthening trains and platforms. A £1 flat fare standing room only deal would make economic and political sense. Journey times are under 30 minutes, and many people are standing anyway."

Can anyone spot the abstractive nature of Loonie's proposal?

Olympic bonuses row will renew focus on costs

Good to see that the transport wheels are already falling off the Olympics.

This from the RMT...

RAIL UNION RMT announced today that it is making urgent preparations for a ballot for both strike action and action short of a strike of all members on the First Great Western franchise following the tabling of hopelessly inadequate Olympics recognition and reward proposals.

This is of course the third such dispute announced within the space of a week, similar ballots having been announced for South West Trains and Greater Anglia.

With the RMT playing hard ball over Olympic bonuses ministers are discovering a new enthusiasm for getting TOCs to address labour costs as part of longer franchises.

Subject of course to the Treasury agreeing to forgo franchise premia during the ensuing protracted disputes.

Railway costs explained No94

Good news for fans of costly bureaucracy and pointless man marking!

Whilst NR and the TOCs are attempting, through Alliances, to remove the duplication of roles that adds so much to industry costs what is the Rail Regulator up to?

Why, duplicating the work already undertaken by Passenger Focus!

Compare and contrast: 

This from the ORR published today: Fares and ticketing – information and complexity

With this from Passenger Focus published at the end of last month: Ticket to Ride

One step forward, two steps back, eh?

UPDATE: This from Orrville (Geddit!?! Ed)...

The good people at Passenger Focus are no doubt be delighted that ORR are now also doing their job for them, thus reducing confusion, increasing clarity and building confidence on which of the numerous organisations actually has responsibility for passenger’s interests.

Meanwhile, no comment from Mr Price-Right on the £2.2bn annual increase in Network Rail’s debt...

Owner group responds to latest DfT Consultation - Exclusive

Eye has been sent a copy of a response to the DfT's consultation on the new London and the South franchise, launched yesterday.

According to the Department...

The franchise is expected to cover most of the existing First Capital Connect franchise, including the Thameslink line which is undergoing a £6 billion upgrade. Services currently run by Southern will be added to the new combined franchise from 2015. This would see a single train operator to take responsibility for all rail services from Brighton to King’s Lynn and Southampton to Ashford with London at the heart, creating the largest franchise in the UK rail market.

The top secret response to the consultation comes from TOC owners Arrational StageginAhead Firellio Group.

It says...

Dear Justine

Whilst broadly supportive of the proposals for a vast new franchise covering London and the South we do have one slight issue.

Namely the risk associated with having to put 30% of the country's entire fare box revenue through our books and the likely impact on our cashflow and market rating.

In consequence we are only able to offer effusive support for these proposals, furthermore we suggest an urgent meeting with both you, and the genius that thought this one up, at the usual little Bistro round the corner for trebles all round!!!

Love and kisses

Your mates on the Board

That is all.

Villiers vignettes - 13, unlikely a sum

This from Leo Pink...

'A total of 13 firms are in the running to become the next operators of the Great Western, Thameslink and Essex Thameside rail franchises' burbles Theresa announcing today's shortlisted bidders.

Well, yes, if you assume that, say, First Great Western Trains Limited, First Essex Thameside Limited and First Thameslink Limited are different companies - which Cruela probably does.

In reality, it is six of the usual subjects plus the Hong Kong MTR striking out on its own.

What is true, however, is that the owning groups will be spending £5 million a throw on their bids.

How much is this costing - Franchise bidding?

Time for an exciting new Eye feature!

A quick scan of of the following document reveals some helpful insights into the franchising process...

ESSEX THAMESIDE, GREATER WESTERN, AND THAMESLINK FRANCHISES APPLICANTS’ CLARIFICATION QUESTIONS: BULLETIN 1

Near the top of page two for instance we discover (click on the image to enjoy)...

Whilst near the bottom of the same page we find (ditto)...


So, in the Age of Austerity, Eye asks 'How much is this costing?'

Plaudits for the Department for Transfer - Shocker

This, unbelievably, from Gordon Gekko...

Time to stop whining about your cockamamie train factory, Limeys!

Don't you realise your Department of Transportation is right there with the zeitgeist.

That smart guy Osborne on the London Telegraph gets it:

The financing element gave Siemens of Germany a big advantage over the three other bidders because of its higher credit rating – one vastly superior to Bombardier's, which is below investment grade.

Siemens' debt is rated A+ by credit rating agency Standard & Poor's – six notches above Bombardier's BB+. The other two bidders, Alstom and Hitachi, are respectively rated BBB and BBB+.

So wise up!

It's about buying finance not goddam trains!

Who cares whether they are made of aluminum, plastic or, given your backward country, wrought iron.

Anyway, I've tipped my good buddy Donald Trump the wink and expect him to announce that he has bought the Derbytown site and plans to convert it into the Royal Derbytownshire Golf Club.

How's about that for a level playing field!

Remember, greed is good.

No surprises as another DafT procurement fails

Regular Eye readers will not be surprised to see that yet another DafT procurement exercise has gone tits-up.

This from the Beeb...

Plans to privatise the search and rescue helicopter service have been suspended amid concerns about the bidding process to find a supplier.

Of course DafT has a fine reputation for running cost effective procurement exercises.

Who can forget the abandoned process to procure 202 DMU vehicles, the continuing saga of the InterCity Express Programme (costs currently running at £27m and without a single vehicle ordered!) or the long drawn out saga of the new Thameslink fleet?

No doubt Petrol-head will address his own department's failings before demanding ever greater efficiencies from pained suppliers?

UPDATE: This from Chionanthus Virginicus...

Can we hope that a decision not to replace Sea King helicopters with foreign ones (Sikorsky) via the aborted search & rescue privatisation, will be followed by a decision to support UK jobs at the last remaining UK helicopter plant - AgustaWestland at Yeovil (Lib-Dem) ?

And will the same principle to protect UK jobs also apply to IEP?

"Chopper" Hammond to the rescue?

DafT invests £27m and buys errr... nothing!

Exciting news from the ever-profligate Department for Transport.

This written answer from Cruella on the 1st February...

John McDonnell (Hayes and Harlington, Labour)

To ask the Secretary of State for Transport which companies his Department has contracted to carry out consultancy work on the Intercity Express Programme; what the total monetary value is of each such contract; and how much each such company has been paid to date.

• Email me when Theresa Villiers speaks
• Most recent appearances
• Numerology
• Full profile ...

Theresa Villiers (Minister of State (Rail and Aviation), Transport; Chipping Barnet, Conservative)

holding answer 18 January 2011

From the start of financial year 2005-06 until approximately 30 April 2010, the amount paid to companies carrying out consultancy work, rail industry advice, legal, financial, business case, technical, project management and procurement advice associated with both the Intercity Express and Great Western Electrification Programmes under the previous administration is as follows. These figures include the time spent by companies in response to Foster Review queries and expenses such as travel and meeting room hire, and exclude VAT and payments to individuals.

	£
Barkers HR Advertising	16,632
Capita Resourcing	431,218
Clifford Chance	1,606
Congress Centre	11,970
Ernst and Young	161,042
First Great Western	149,873
First Class Partnerships	5,913
Freshfields	5,644,844
Jim Standen Associates	10,620
Mott MacDonald	11,827,506
MWB Business Exchange	1,903
Nichols	2,938,071
GNER, NXEC and East Coast Trains	1,233,895
PricewaterhouseCoopers	2,791,582
Reed Employment	51,054
Steer Davies Gleave	1,235,628
Willis Ltd	13,615
Total	26,526,970

For the period from 3 May 2010 until 11 January 2011 the figures are as follows. Most of these costs constitute time spent by companies in response to Foster Review queries, and the continuation of the Great Western Electrification Programme.

	£
Capita Resourcing	7,842
First Great Western	22,261
Freshfields	27,242
Mott MacDonald	79,468
Nichols	178,368
East Coast Trains	46,574
Steer Davies Gleave	82,343
Total	444,098

The Department for Transport currently has live contracts with the following companies. The monetary amounts set out represent the maximum total authorised spend, not the amount remaining for each. As such, much of the work under these contract has already been carried out and invoiced for, and is included within the amounts in the previous tables.

	£
Freshfields	3,600,000
Mott MacDonald	15,000
Nichols	15,000
PricewaterhouseCoopers	25,000
Steer Davies Gleave	45,125
Total	3,700,125

Unbelievable!

How can you spend over £27m of taxpayers money and have nothing to show for it, apart from reams of paper?

If privatisation is such a good idea perhaps time to flog off Great Minster House and pretty damn quick, before it wastes any more of our hard earned cash?

UPDATE: This from the French Taunter...

Eye readers may be wondering why Cruella has bundled the electrification of the Great Western Main Line into a question about the Incredibly Expensive Procurement.

A glance at Rail Amateur reveals the following story posted yesterday:

Bi-mode Hitachi Super Express trains would operate the inter-city service, using pantographs to Bristol and under-floor diesel engines thereafter. Hitachi would build a final assembly plant at Newton Aycliffe in County Durham for the trains. The company says it would create up to 800 jobs.

Evidently the Department now has a cunning plan!

UPDATE: This from several people in the industry who wish to remain anonymous...

"These figures include the time spent by companies in response to Foster Review queries"

Folks get paid to respond to Foster!

Where do we send the invoice?

UPDATE: This from Steve Strong...

Could Cruella explain why GNER / NXEC / EC costs are 10 times those of Great Western, when the costs are supposed to relate to the IEP and GWML Electrification Programme?

UPDATE: This from D1039...

May I draw the bowler hat's attention to the following from PA, under the perhaps misleading heading "Hopes rise for rail electrification"

Welsh Colonial Governess Cheryl Gillan told MPs: "Whatever we are left with when an announcement is made, you can rest assured we have left no stone unturned in making the case for electrification into Wales. I remain optimistic about a good outcome."

If, as Rail Professional reports, wires will stop in CUBA*, how can it be a good outcome for Wales?

Is Wales the new Albania?

*CUBA = the County That Used To Be Avon eg Bristol, or in the case of Parkway, South Gloucestershire

UPDATE: This from Howard Wade...

Surely, the prospect of driving a stake through the heart of the Zombie Train and puncturing the Reality Distorting Bubble enclosing Great Minster House was reward in itself.

That Foster and his two old railway ramrods were seen of with ease by the bi-mode cabal suggests that we might as well have stayed in the office doing something which could be invoiced...

UPDATE: This from The Velopodist...

Eye readers responding to the Rail professional IEP story are all commenting on the basis that the story is accurate.

I'm getting the phone equivalent of blank stares when I ask the people in Great Minster House about this story.

The Midland Main Line electrification looks a particulalry flimsy theory. On top of that, I'm far from sure that the bi-mode cabal have seen off the electric-with-diesel locomotives idea.

These points aside, it looks a super story.

Turkeys vote against Christmas - Shocker!

This gem from Local Transport Today...

The Association for Consultancy and Engineering (ACE) has hit out at the Government’s approach to cutting costs of infrastructure projects.

“Industry wants to deliver high-quality, good value services to its clients, but simply asking suppliers to reduce their prices is no magic bullet,” ACE chief executive Nelson Ogunshakin said.

Just fancy that!

Gold plated stations - Chesterfield

This from the Wicked Weaver...

I wonder if I might share with Eye readers these photographs of the new platform 3 at Chesterfield station.

Observe the miles upon miles of Coucher Memorial Fencing here...


...and here...


The new platform also hosts some exciting new features - perhaps some of your readers can guess what this one is for?


A Zimmer frame bolted to the ground? Obviously the safest way for the infirm to negotiate highly dangerous stations in these safety conscious times.

Of course the piece de resistance is the dedicated fire escape from the end of platform 3 that runs almost the length of the new structure, just in case all that metal, glass and tarmac suddenly bursts into flame...


In these straightened times it is good to see that no expense has been spared to protect the passenger.

Perhaps the only disappointment is that despite the vast expense it's still not in use yet.

UPDATE: This from Geo.Stephenson (Retd), Clay Cross

I fear I must point out, Sir, if no more immediate source has done so yet, that there are reports this new Passenger Wharf was used on 29th July to accommodate trains after a passenger was taken ill and the train he was travelling on detained in platform 2 awaiting paramedics.

Yours, laying tracks faster than the gricers can grice!

UPDATE: This from Chionanthus virginicus...

..and it's only been constructed for use during engineering works !!!

A 'mixed' performance from Network Rail...

Telegrammed by Bulldog Drummond
It started with a lacklustre performance by Iain Coucher on the Today programme at 07:20.

The Network Rail chief exec seemed to allege that ORR were using the 'wrong kind of efficiency measures'.

Then there was the ORR press conference, well described by Nigel Harris on his blog, called to discuss the Regulator's robust and pointed letter on Network Rail's performance last year.

Another self-serving piece of work was Network Rail's Preliminary Financial Results for the year ending 31 Mar 2010.

Although not easy to read the story is depressing.

There is some improvement but it is being bought at too high a price and taking too long and, anyway, ORR is clearly not convinced that many of Network Rail's claims add up.

It is instructive that Coucher only mentions six new projects in the Preliminary Financial Results:

• Airdrie to Bathgate – a new line being built in Scotland, scheduled to open in December 2010
• The programme of work for the London 2012 Olympics continues; this includes new lines, new stations, better facilities and new rolling stock on the North London Line and East London Line in addition to works to support and enable the transport links being developed in the Stratford area
• Construction is well advanced on the Thameslink programme
• Also as part of the transport strategy for London, the Reading project has advanced, as well as key development work now underway for Crossrail
• The Birmingham Gateway project to redevelop New Street has attracted a significant amount of third party investment

Yet half of these are being driven by others.

Rolling stock procurement is nothing to do with Network Rail.

Property investment should not be the main focus of our national infrastructure company.

Highlighting Newport station as a major initiative seems to indicate so little is being achieved that a £22m project, which is partially funded by the Welsh Assembly, gets top billing.

Meanwhile signalling problems on the North London Line and ORR's intervention into Airdrie Bathgate appear to have been glossed over.

The fantasy that Network Rail is a sound and effective business is best left to the words of the hapless Group Finance Director, Patrick Butcher:

"Network Rail is maturing into a company that is strong and sustainable."

Does anyone in their right mind really think this is the case?

He tops this Pooterish statement with the complete nonsense that:

"Our financial performance means we generated operational cash flows 80% greater than required to pay our net financing costs. Our gearing ratio [debt to regulatory asset base] of 64% shows that our debt is at a sustainable level and gives the business a significant buffer to absorb unplanned costs."

This is the world of Micky Mouse accounting.

Interest on debt can only be paid out of net income, not total cashflow.

The RAB is a completely meaningless basis for borrowing, particularly if sufficient income cannot be generated to pay interest and start to reduce the principal outstanding.

The reality is that Network Rail is slipping into a morass of debt and that too little is being bought for the huge sums being borrowed.

The Prudential affair has shown that corporate activism is now much in vogue.

Eye is certain that the Members of Network Rail will make it their primary business to stop this corporate muddle at their AGM next month and direct the Board as to how the business is to be run in future.

Number Crunching...

£6.2bn
Osborne's "age of austerity" spending cuts

£23.83bn
Network Rail's "carry on regardless" debt

UPDATE: Network Rail says £23.8bn debt is sustainable.

Eye understands that NR's Board is also confident it can nail jellies to the ceiling.

UPDATE: This from Ithuriel...

Network Rail's debt is sustainable out to 2020, provided:

a) Network Rail can meet its efficiency targets over the rest of Control Period 4

and

b) Network Rail continues to cut maintenance and operating costs year-on-year in Control Period 5 at the same rate as required in Control Period 4

and

c) The Government is happy for Network Rail's funding requirement to remain at the current £5.3 billion a year throughout Control Period 5.

Readers may note that these requirements are not quite all or nothing.

If there are no enhancements in the High Level Output Specification for Control Period 5 then a combination of a) and b), will allow the number in c) to be reduced.

UPDATE: This from Winnie the Pooh...

Despite being a bear of very limited brains even I can see that none of the above provisos are likely to be met.

Which means that NR's level of debt remains at a completely unsustainable level.

Bump, bump, bump...

King's Place expects a visitor...

This from Bulldog Drummond...

Apparently Sir Alan Budd from the Office of Budget Responsibility is very keen to pay a visit to Network Rail's King's Place HQ.


As Sir Alan takes the Tube from Westminster to King's Cross no doubt the following questions will pass through his mind:

• Need the Government be concerned that the publicly underwritten debt of Network Rail will rise from some £23bn today to in excess of £31bn by April 2014 (equivalent to 35% of Ireland’s present sovereign debt)?

• Are the Government right to back a business model that supports a company that has to roll up interest due every year into borrowings? Although with a keen eye for detail Sir Alan will of course note that in 2013/14 it is projected that a small excess of income will make almost a £400m offset to an interest bill of £1.7bn in that year.

• Is Network Rail’s business model right to assume that after spending record sums on infrastructure over the next five years income will only rise by a projected 15% (from £5.9bn in 2009/10 to £6.7bn 2013/14).

• Is the ORR's reliance on the Regulatory Asset Base (RAB) well placed as a measure for calculating Network Rail’s soundness as a business. Or might it be better to have a system based on balancing current expenditure against future income as a means of assessing whether borrowing is prudent?

• Is it wise that only 25% of Network Rail’s current debt is in conventional UK Sterling bonds, whilst nearly half is index linked and the remainder is denominated in foreign currencies. Happily short term interest payments are low for these classes of debt, but a longer-term deterioration in the UK’s global financial position may hit hard an exclusively Sterling based business with such a borrowing profile.

No doubt upon meeting NR's Board such trifling concerns will be instantly swept away.

Or perhaps not…

UPDATE: This from Ithuriel...

But Network Rail's debt is incurred to pay for enhancements requested by Government.

So you can't blame the company for doing what it's funder specifies.

UPDATE: This from Bulldog Drummond...

Ithuriel, when not flitting around doing jobs for Gabriel in Paradise Lost, doubtless has had time to look at the Companies Act 2006 which requires directors of companies, 'to promote the success of the company for the benefit of its members as a whole.'

It sets out a number of factors which directors must take into account to promote success.

Of particular interest is the need to take into account the likely consequences of any decision in the long term.

To say that 'Network Rail's debt is incurred to pay for enhancements requested by Government' misses the point.

If Network Rail is a company it must have a duty first to its own success and longevity and getting into massive and unrepayable debt doesn't look too smart a strategy.

Unless of course Ithuriel is suggesting that Network Rail isn't really a 'proper' company...