The Silence of the LMs

Herr Professor Erwin Schroedinger writes…

In co-operation with the Britisch Department sum Transport we began an exciting new experiment to validate a more advanced version of mein 'Uncertainty Prinziple'.

The award of the West Midlands replacement franchise to Abellio, JR East and Mitsui was announced on 10th August, but not signed and then surrounded mit ein wall of silence.

With no one knowing what has happened in the following weeks, we have the situation where the franchise award may be in the bureaucratic process, still under negotiation, or deferred.

Railway Eye's science correspondent Prof Fred Bunsen-Berner notes that this triple uncertainty paradox could mark a step forward in our understanding of nuclear physics.

Whether it could be applied to our understanding of franchise procurement is perhaps less certain.

DfT issues ITTs for LTS and Thameslink 3000

This from the DfT... 

The first invitation to tenders have been published by DfT since launch of a new rail franchising schedule.

The government has today (26 September 2013) published 2 invitations to tender (ITT) for the Essex Thameside and Thameslink, Southern and Great Northern (TSGN) rail franchise competitions. 

These are the first to be issued to bidders since the Department for Transport launched its new rail franchising schedule in March.

They have been shaped by the recommendations made by the independent Brown review into rail franchising. 

ITTs ask bidders to set out detailed proposals of what they will deliver should they win the franchise competition.

Rail Minister Simon Burns said:

"Rail franchising has been a force for good on our railways and the department has been working hard to roll out its new franchising schedule. 

"These are the first invitations to tender to be issued since the independent Brown review into rail franchising, which endorsed the government’s approach to the railways.

"We are now looking for innovative bids that provide value for money for taxpayers and put passengers right back at the heart of our railways." 

It is anticipated the successful bids will be announced in May next year. The Essex Thameside contract will begin in September 2014 and run for 15 years.

The Thameslink and Great Northern elements of the TSGN franchise will start in September 2014 with the Southern element being phased in by July 2015. The franchise will run for 7 years. 

ENDS

Franchising process explained!

Good to see that the DfT is making the franchising process as simple as possible!

Hope that's clear then.

Richard Brown's remit - some thoughts

This from Sir Charles Trevelyan... 

Given the lack of a published remit for Richard Brown might I volunteer the following?

Eye readers will no doubt have their own thoughts which they may wish to add? 

Brown Review Remit

Review the rail franchising programme, and determine the changes which are necessary to ensure that;

•  Government’s value for money is secured;
• The appropriate balance of financial risk transfer to the private sector is achieved;
• Innovation, efficiency, modal shift and growth is promoted;
• The competitive market for bidding is enhanced, with a particular focus on encouraging new entrants and smaller players;
• The best outcome for customers is secured 

In particular, the review should consider;

• How the bidding process can be simplified and shortened to reduce costs;
• The balance between detailed specification of outputs, efficiency, and risk
• Whether alternative models have a role in some, or all, franchise areas.  This should include, although not be limited to;

-   Operating concessions, where funders retain revenue risk and control of specified outputs

-   Devolution to local and sub national consortia – noting that this could operate on a franchise or concession basis

-   Longer operating licences for commercial franchise propositions, based around an annual fee or tariff

-   An extension of the DOR concept

In conducting the review, cognisance should be taken of the previous work on franchise reform, and in the McNulty study.  The wider rail industry should be given the opportunity to contribute its ideas to the work.

The report should be submitted to Ministers by 31 December 2012. 

Further contributions welcome.

UPDATE: This forthright suggestion from Sinoda...

If soon to be Baron Brown of the Broom Cupboard is short of suggestions, perhaps the question oft-posed by 'The World's Greatest Living Transport Correspondant' could be addressed as follows?

"What is franchising for?"

Better known as the 'Wolmar Question'.

Greening to meet the railway she runs?

Eye's man with the soothing bedside manner has been in contact.

Apparently Cruella will be spending more time than expected under doctor's orders, following her recent bicycle contretemps.

Eye of course joins the rest of the railway in wishing Theresa a speedy recovery.

However, every cloud and all that.

With the department one minister down it will fall to the Captain of Netball to sell the government's exciting new franchising policy to a frankly sceptical industry.

No doubt there is growing panic in Marsham Street that Ms Greening might actually start meeting people who run real trains?

Secret of Albino's 'winning' GA bid explained!

Much chitter-chatter in the industry over who might have won the Greater Anglia franchise.

Despite the announcement not being due for another two weeks The Grauniad felt confident enough on Tuesday to predict:

Continental Europe's grip on the UK rail industry is likely to extend to the Greater Anglia rail franchise after the Dutch national rail operator emerged as the frontrunner for one of the routes connecting to the 2012 Olympics.

Good news indeed for Abellio!

However, Eye has been struggling to understand how the DfT, normally so careful about water-tight franchise bid processes, had allowed market sensitive information to apparently seep out from Marsham Street.

Happily, Eye can exclusively reveal that this was not the case!

As became clear today via the BBC...

Dutch National Railways is introducing emergency plastic bags for passengers to urinate in as part of its first-aid provision on some commuter trains.

Spokesman Jeroen von Geusau told the BBC "When you have to wait three or four hours on a train, then it is quite logical you have some people aboard who need to go to a restroom," he said.

Given recent performance on the Anglia Route only a sadist would think of awarding the franchise to another bidder.

Villiers vignettes - Customer focused franchises

This from Cruella...

Written answers and statements, 18 May 2011

Jonathan Edwards (Carmarthen East and Dinefwr, Plaid Cymru)

To ask the Secretary of State for Transport what plans he has for the Great Western franchise beyond 2013.

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

The specification for the new franchise, to commence in 2013, will be developed over the next year in consultation with the railway industry and stakeholders.

No mention of listening to actual passengers then?

First instructs DafT to 'Assume the position!'

Eye salutes the financial genii at the Department for Transport!

These fiscal titans accepted First's heavily backloaded 2006 bid for the Great Western franchise under which the company promised to pay the Treasury £1.13bn over the life of the franchise.

But of course to be on the safe side First also insisted on a break point in the contract, at the point when premia payback became really chunky.

Needless to say First has now exercised this option which leaves the Marsham Street gnomes shy of a cool £826m which First should have paid in the final three years of the franchise.

Regular observers of the railway scene will of course recollect that this is the same franchise whose original service specification was also ballsed up by the Marsham Street Mandarins.

So badly in fact that after a year the DfT, which "doesn't renegotiate franchises" was forced to errr... renegotiate the franchise - begging First to run more trains. In return for saving the departments bacon grateful Civil Serpents brought Cap and Collar arrangements on the franchise forward by two years.

No doubt the resulting shortfall in the Department's budget has already been picked up by the poor bloody taxpayer!

No matter.

In happier news - Theresa's new, exciting and improved Franchising Policy goes from strength to strength.

Why only this Tuesday DafT failed to issue the InterCity West Coast ITT.

With Lin Homer admitting to the Public Accounts Committee on Monday afternoon that there is still no Franchising Policy this one looks like it will run and run (or not).

Perhaps it would be easier, and cheaper, for all concerned if DafT just gave the West Coast franchise to its latest favourite, along with a very large blank cheque?

UPDATE: This from a Concerned Berks and Hants Traveller...

Will DafT now insist on a de-naming ceremony for FGW HST Sir Moir Lockhead OBE before 2013?


Perhaps this sad occasion might be the final opportunity to obtain a remaindered copy of Sir Moir's Lovely Book?

Sadly Eye understands that Slugger O'Toole doesn't go in for such vapid PR stunts.

UPDATE: This from Sir Humphrey Beeching...

Over an agreeable luncheon at Raoul's today an erstwhile colleague and I discussed the apparent delay in the publication of the Invitation to Tender for the InterCity West Coast franchise.

Over several glasses of a rather spicey white Burgundy we both agreed that the new Permanent Secretary in my former department is well and truly master of her brief.

Having commissioned Sir Roy McNulty to review industy costs it would be precipitous to announce a Franchising Policy before his findings are published next week.

As my First Division chum quipped "Why have a dog and then bark yourself?".

Chiltern goes from strength to strength!

More exciting news from DB owned Chiltern Railways.

According to the DfT...

The Department has today begun consulting Chiltern Railway Company Limited, and relevant rail industry bodies, on a proposal to impose a Penalty of £500,000 on the company for a series of contraventions of the terms of their franchise agreement.

Chiltern accept that they have breached the terms of their franchise in relation to the late delivery of two station improvement schemes, and to two breaches of requirements in relation to timetable changes. These specific breaches have since been remedied.

A copy of the Department’s letter to Chiltern advising them of the Penalty and setting out the details of their contraventions has been published today on the Department’s website.

Villiers' franchise reform proposals, based on the 'success' of the Chiltern model, keep getting more and more credible.

UPDATE: This from Chiltern...

In reaction to the DfT’s intention to impose a penalty notice on Chiltern Railways.

We accept that, in 2009, there were four technical breaches of the franchise agreement; none of which had significant consequence for our passengers or incurred cost to the taxpayer. The most serious breaches were a 16-week delay in commissioning new lifts at a single station, and a four-week delay in installing a new shelter on a platform that already had one.

Since that time, we have successfully delivered £7.25m of investment in station improvements and car park expansions, started work on the largest privately funded passenger infrastructure project since before world war two and continued to meet all the requirements of our franchise on punctuality and service quality. Next month, we will be introducing brand new commuter trains at a cost of £1.2m per carriage.

The Chiltern Railways franchise has always been focused on delivering what our passengers tell us they want. It would be a cause for enormous regret if £0.5m were diverted from investment in improvement for passengers as a result of low impact franchise breaches.

UPDATE: This from Steve Strong...

Strange.

DfT have been spurned into action over a 16 week delay in commissioning lifts at a single station but remain silent about a 16 month absence of WiFi from the entire Arriva Cross Country network.

I suppose this is a start.

Perchance DfT is not dead but sleepeth?

UPDATE: This from Jumbo...

WSMR appears to be a gift that just keeps on giving to Chiltern's German owners.

Judging by the DfT snotogram WSMR is at the heart of this fine.

Hilariously, it would appear that the DfT only found out about Chiltern's sharp timetabling practice from a WSMR press release!

Let's just add that to WSMR's tab shall we - a cool £14m and counting!

UPDATE: This from 31154...

I notice there is a "Wifi on Trains Conference" in London on 8-9 June,

According to the blurb:

"Among the companies presenting at Train Communications Systems 2011 will be...

• Russian Railways
• Nuovo Trasporto Viaggiatori (Italian high-speed train operator)
• WestBahn (Austrian Train Company)
• Amtrak
• Ferrocarrils de la Generalitat de Catalunya
• BWCS
• Department for Transport, UK
• National Express
• China Railways
• Bay Area Rapid Transit
• SJ Trains
• VR Trains
• NS Trains
• Thalys International
• Globalfone (USA)
• Icomera
• 21Net
• Nomad
• GBS (USA)

How strange, no mention of DB/Arriva/Cross Country!

No doubt the DafT presentation will reveal how successfully they've enforced their franchise commitments though?

Rail Barbie's empire to expand?

This from Virginia Water...

I see in yesterday's Observer that First Group are considering handing back the keys on the Great Western franchise in 2013, rather than 2016.

Given the DfT's already packed reletting agenda, does this raise the prospect of Directly Operated Railways taking on its second InterCity operation?

And why not!

After all Rail Barbie's first franchise has been highly successful in reducing costs, raising performance and improving the timetable. (shurely shome mishtake? Ed)

The future's bright, the future's dull grey and purple...

UPDATE: This from the late Adam Smith...

This is wonderful news.

If First Group elects not to continue with its franchise beyond 2013 this will provide the most marvelous opportunity to test Villier's exciting ideas about residualising investment beyond franchise length.

What with First Group owning 12 power cars and numerous trailers upon which the Great Western franchise is utterly dependent if it is to deliver the DfT specified timetable.

Villiers vignettes: On empowering TOCs

Oh dear!

The Saviour of the Jammy Dodger's exciting proposals to let TOC's run whole swathes of the network appear to be crashing down around her ears.

Much noise was made by Cruella about the benefits that 'thinly capitalised equity profiteers of the worst kind' could deliver to the railway were they to take on future investment.

And the model for this great leap forward?

Behold Chiltern! Masters of multiple Evergreens... or perhaps not.

The from the Grauniad today:

A £250m upgrade of the Chiltern Line that should cut journey times between London and Birmingham by 20 minutes is beset by cost claims and poor planning, according to a confidential industry report.

Network Rail, the owner of Britain's tracks and stations, is now helping Chiltern Railways complete the project

The ORR Monitor asked a slightly more robust question about the debacle now... ahem... no longer overseen by Deutsche Reichsbahn...

Q: Does NR believe that the Evergreen difficulties raises serious questions over government proposals to "encourage operators to invest in projects that have a financial return over 15 years."

A: No, longer franchises are essential to help re-align the interest of operator and infrastructure owner so a closer, partnership approach to deliver can be achieved. We believe longer franchises will encourage more private sector investment in our railway but it’s clear that large-scale, complex infrastructure projects will need experience and expertise to ensure successful delivery.

As Blazing Saddles might say: NR 'talks prettier than a $20 whore'...

Eye salutes the new spirit of sensitive diplomacy under Huggable's leadership!

Rail privatisation failed - Official

Telegrammed by Leo Pink
The Government's response to the Franchising Consultation appears to mark a clean break with the policies of the discredited Major, Blair and Brown years.

Or so it would appear from this:

• A significant part of revenue growth that has occurred on past franchises has been due to macroeconomic growth rather than solely a result of good management on the part of the operator.

Quite a startling piece of revisionism that.

And then there is this:

• Demand growth is largely outside an operator’s control.

Presumably demand shrink too, so National Express East Coast was a hapless victim of economic forces?

And best of all this:

• The devolution of rail services in Merseyside and London has had an extremely positive effect on patronage.

So state control beats market forces!

Should we read this as an apology from Petrol-head and his Marsham Street minions?

Today's franchises are a Curate's Egg - Official

So. Welcome to the new world of Franchising!

This from the DfT's Reforming Rail Franchising: Government response to consultation and policy statement, published today:

2.4 It was pointed out that the present arrangement of 7-10 year franchises has established a highly competitive market, delivering increasing financial returns to the Government.

3.2 The consultation acknowledged that the “Cap and Collar” mechanism used on many existing franchises has produced perverse outcomes, as well as significant financial liabilities for the Government.

Can both these statements be true?

UPDATE: This from Travelling_Wolf, via Twitter...

Yes.

High returns are consistent with high liabilities.

Ministerial Statement on Franchising

RAIL FRANCHISING

My Department will shortly begin a consultation exercise on the future of rail franchising policy. This consultation will provide industry partners with the opportunity to comment on the Government’s approach to rail franchising and whether bidders for longer franchises would be able to offer investment in improvements to trains and services. It will also allow the industry to set out its proposals for improving the efficiency and value for money of rail franchises, for both taxpayers and fare payers. I will set out further details to the House in due course.

To enable the next Greater Anglia and Essex Thameside franchises - which are currently in the process of being re-let - to fully reflect the changes resulting from this review of policy the competitions for these franchises, which were started in January 2010, are to be cancelled.

It is currently expected that a new competition for the Greater Anglia franchise will be advertised by the end of the year, after the consultation responses have been considered, with the Essex Thameside franchise following in Autumn 2011.

So that's the formerly doomed National Express back in from the cold.

UPDATE: This from Sir Humphrey Beeching...

As with all ministerial statements the important bit is what is omitted.

So no reference to what is planned for nationalised East Coast.

Or for that matter the superfluous additional layer of bureaucracy that is Directly Operated Railways.

My departmental colleagues play a most amusing new game.

It is called 'What is the point of Elaine Holt?'.

Answers on a postcard please to Petrol-head c/o Marsham Street.

UPDATE: This from The Major...

Eye's cut and paste of Villiers' statement on franchising omits the final paragraph which talks about East Coast.

It doesn't say much of course... simply talking about "some consequent changes to the procurement timescales previously published".

I guess that means EC stays in state hands for longer.

First for not putting its head above the parapet

So the government's exciting plans for franchising have gone down like the proverbial turd in a punchbowl amongst ATOC members.

This from the Telegraph...

In a joint reaction to the new guidelines proposed by Transport Secretary Lord Adonis, the companies will express their fears over even more "micro-managing" of the railway by politicians and express their frustration at the Government's failure to listen to their concerns.

Their response is being co-ordinated in a letter from the Association of Train Operating Companies, whose members include the rail subsidiaries of Britain's big five quoted transport groups – Stagecoach, FirstGroup, Arriva, National Express, Go-Ahead – and Virgin.

But what's this?

Despite ATOC claiming unanimity amongst its members there is one significant signature missing from the excoriating letter.

Whose could this be?

Why step forward First Group's very own Sir Moir Lockhead, who clearly knows which side his bread is buttered on.

And a jolly good thing too!

Not least for Dr Mike Mitchell, who can continue referring to Worst Group franchises in the first person plural.