The Empire strikes back, sort of!

This from Ithuriel...

In an article in the Sunday Express, Stagecoach CEO, Martin Griffiths, launched his Chairmanship of the RDG (What that? Ed) with a fighting article headed: 'Railways are still on track'.

No, it wasn't a  riposte to busway conversions, but a paen to the newly nationalised railway (Shurely 'triumph of Privatisation'? Ed)

Martin showed his Finance Director background with this statistical claim:

"Train companies last year switched from being net recipients of Government support to net contributors. Overall industry subsidy per journey is lower than or the same as in six of the 12 years leading up to privatisation."

Good news indeed!

But what's this?

Note that Mr Griffiths is comparing 'now' (after 20 years of privatisation) with 12 years then, conveniently ignoring the post Railtrack years when subsidy was indeed four to five times BR at its best (Where is this going? Ed).  

Griffith's comparison is also based on passenger journeys not passenger kilometers. 

Since Clapham Junction to Waterloo and Kings Cross to Aberdeen are both 'journeys', the average cost measure is meaningless (Got you! Ed). 

So what about comparing cost per passenger kilometre?

In 1982, before the revival of BR's fortunes under Sir Bob Reid, the subsidy per passenger kilometre at today's prices was 8.1p. 

In 2006-07, when subsidy peaked at £6.3 billion - three times BR's 1982 subsidy, this equated to 15.8 p per passenger km!

Nice try.  But sadly, no cigar!

Update: This from The Horn of Plenty...

Shurely it was Sir Robert Reid who revived BR's fortunes, paving the way for Shell's Sir Bob later?

On a more serious point, do we honestly think that we were at a sustainable level of spend in 1982, the era before Clapham, Hidden, Hatfield, DDA, Interoperability, Climate Change Levy, Pension Protection Levy, TPWS, GSMR, etc...?

Hopefully we are now where Sir Robert may have wished us to be, with the Government treating:

"... the network according to its importance to the nation rather than its financial value..."

Where "...safety must be 'top of the agenda': the only answer [is] high standards, efficient systems and constant vigilance."

Does anyone on today's railway really believe that our old nationalised industry could have delivered this?

DfT - a lesson in being careful what you wish for

This from Ithuriel...
 
The Invitations to Tender for the new replacement franchises, sees bidders get brownie points for quality improvements. 

One good way to improve quality is to promise new trains, which generates points and, of course, points mean prizes!

But, new trains cost more money.

And the word on the tracks is that DfT is facing the prospect of all the bids for Thameslink Southern Great Northern being of such high quality that they are all unaffordable.

First for telling it like it is.

This from Ithuriel...

Speaking to analysts following the award of the Intercity West Coast franchise, first Group CEO Tim O'Toole said
 

"The opportunity is ripe because the capacity (on Intercity West Coast) has not been exploited with only a 35% seat occupancy rate and particularly low marketing spend in recent years. That fact, by the way, is understandable since the incumbent has been in revenue support - a condition that discourages any investment to stimulate growth since every pound must generate a return of at least five times."

 
Mr O'Toole knows whereof he speaks.  First Great Western has been in revenue support since April 2008 and First Capital Connect since April 2009.
 

Candour personified.

ATOC levels the Euro playing field?

This from Ithuriel...


Is this a cunning plan by ATOC to apply the McNulty apporach to mainland European railways, inflating their costs to UK levels thus closing the efficiency gap?

GW OJEU exposes passenger mileage collapse!

This from Ithuriel...

According to the Great Western franchise OJEU Notice issued by DfT on 19 December:

In the last year of BR, Intercity Great Western - which then didn't include Thames Trains and other later accretions - generated 14 million passenger journeys and 1,218 million passenger miles.

So in the 'bad old days' the average length of journey was 87 miles. Today it is apparently 199 feet 6 inches.

Another triumph of numeracy from those wonderful people who still haven't brought you the IEP.

UPDATE: This from the Blue Lamp...

I think Ithuriel is being a little unfair to Marsham Street.

Whilst this OJEU may have been issued in a hurry, this hasn't prevented the Department from planning ahead.

On page 26 DfT confirms that First will retain the franchise as it expects to sign an agreement with the Aberdeen based bus bandits on 22nd November 2012

That's forward planning for you!

UPDATE: This also from Ithuriel...

According to the same consultation document

"In the last financial year, franchise revenues were £694m, while a premium of £250 million was paid to the Department for Transport".

No mention of the fact that the franchise is in Revenue Support to the maximum level and costing the Taxpayer and FGW shareholders shedloads of money.

Derbygate - Cold Comfort from LibDems

This from Ithuriel...

According to Nick Clegg:

"Do remember there are going to be lots of other rail contracts and I very much hope Bombardier will bid for them"

Care to list them, Mr Clegg?

Perhaps Bombardier should ask if they can borrow NR's Rapid Rebuttal Unit to kick this sort of misleading spin out of court?

DfT procurement priorities laid bare

This from Ithuriel...

This illuminating written answer given in the House yesterday...

John McDonnell (Hayes and Harlington, Labour)
To ask the Secretary of State for Transport which external consultants were contracted to advise his Department on the (a) design, (b) tendering and (c) award of preferred bidder status for the Thameslink rolling stock contract; and what the cost to the public purse was of each such contract.

Theresa Villiers (Minister of State (Rail and Aviation), Transport; Chipping Barnet, Conservative)
The cost of each contract against the categories requested up to June 2011 is as follows:

£ million
Vendor	(a) Design	(b) Tendering (1)	(c) Award of preferred bidder status
Arup	2.53	2.86	0.14
Booz and Company	0.22	0.49	0.09
Freshfields	2.44	5.31	0.18
Interfleet	0.16	1.49	0.02
PWC	0.77	2.26	0.26
Total	6.12	12.4	0.69
Total	19.2
(1 )Tendering relates to evaluation. Note: These figures exclude VAT.

Eye Readers will doubtless note that even in the Design phase for a technical project, engineering consultants Interfleet were paid less than half the fees of lawyers Freshfields.

Is this because:

a) engineers are as cheap, as lawyers are expensive ?
b) making sure you can get your money back if the train doesn't work is more important than making sure it does work?
c) Interfleet missed a zero from their invoice?

Answers on a postcard please to Great Minster House.

UPDATE: This from Captain Deltic...

Can I point out that this table corrects the inaccurate information in a previous written answer from Theresa Villiers in July this year.

Villiers said then that the cost of Thameslink consultancy was £13.1 million of which £5.3 million had been spent since May 2010.

Since Lord Adonis had put the figure at £13 million a year earlier it was obvious some civil servant was going for the Jammie Dodger Embarrassment Trophy.

Naturally, in publishing the correction the Minister apologised for misleading the House (actually, I made that last bit up)

Might I take this opportunity to point out that this blindingly obvious error was exposed in my Informed Sources column in Modern... (No. Ed)

Sleepy Derbyshire wakes up!

Telegrammed by Ithuriel
Good grief, Margaret Becket has finally realised that there is a train factory in her constituency under threat from the Axis.

This written answer given by Cruella on the 16 May 2011...

Margaret Beckett (Derby South, Labour):
To ask the Secretary of State for Transport when he expects to announce the successful bidder for the Thameslink rolling stock order.

Theresa Villiers (Minister of State (Rail and Aviation), Transport; Chipping Barnet, Conservative)
My officials are continuing to evaluate the bids from the two remaining bidders in the competition to build the new trains for Thameslink. We are planning to announce the preferred bidder shortly.

Perhaps all will all become clear on Friday?

Villiers vignettes - On plucking figures out of thin air!

Telegrammed by Ithuriel
According to St Theresa, in a written answer.

"Introducing the bi-mode option for the Intercity Express Programme is estimated to save around £200 million (net present value) as compared to introducing a fleet of all-electric trains to be coupled to a diesel locomotive beyond the electrified sections of the railway."

Can it be that her advisors have failed to tell her that the original specification for an ultra-lightweight IEP has turned into a Voyager DEMU clone?

And that a five car EMU ought to have a capital and whole life maintenance cost a darn sight less than the same train with three diesel engines underneath?

Eye suspects that DfT civil servants are even now wondering how to tell their boss that she somehow transposed their NPV and omitted the sentence explaining that:

"Whilst a bi-mode would cost more, it provides valuable insurance against the UK nuclear power programme - and with it electritifcation - being delayed."

Perhaps we will never know. Unless one of Eye's Parliamentary readers feels like asking the question...

UPDATE: This from an Eye reader in the supply chain who wishes to remain anonymous...

Amazing that Villiers can have such an accurate NPV saving for bi-mode against EMU+Diesel when suppliers of modern diesel locos (Builders and Lessors) were not even consulted on relative costs both capital and whole-life.

McNulty report deeply flawed - Official

Telegrammed by Ithuriel
Here is a table from the interim submission of Sir Roy McNulty's Rail Value for Money study.


Older readers who passed the 11 Plus and younger readers with an A* in Advanced Maths may care to check the right hand column.

Eye wonders whether it is safe to trust Sir Roy and his team with the industry's finances?

UPDATE: This from Martin...

It's more serious than you realise...

Never mind the fact that the percentages don't add up to 100 (which could be explained by a further, hidden category).

I'm more interested in the way that if you use the net cost of each category together with it's percentage to calculate the overall total, each category suggests wildly different figures...

UPDATE: This from The Economist...

It's not clear what the final column actually refers to.

I think it is saying that long distance franchises cover 75% of their costs and government covers the remaining 25% while for regional franchises they only cover 39% of their costs. - hence the col should not add up to 100%

It is certainly not the proportion of Govt spending that goes to each of the three groups.

UPDATE: This from The Archer...

What’s more worrying than the 105% total is that none of the figures in the final column bear any relation to the supposedly related figures in the £m column.

The 61% should for example read 56% so the ‘inescapable conclusion’ in paragraph 6.3.3 is not correct, although what the actual conclusion should be escapes me.

Hitachiballs - the lobbying continues

Telegrammed by Ithuriel
This from the Newcastle Journal...

BUILDING a fleet of new Intercity trains in the North East will save the country more than £100m rather than buying them from abroad, a new report argued yesterday.

Analysis by the Northern TUC shows that taxpayers would save substantial sums if ministers finally give the go-ahead for a train assembly plant in Newton Aycliffe, County Durham.

The report comes as Transport Secretary Phillip Hammond prepares to announce in the New Year whether the proposals, put forward by Hitachi, will get the go-ahead.

There are also fears among some campaigners that ministers may decide to buy trains from overseas, despite that option not creating a single British job.

The research by the Northern TUC shows that more than £106m a year would be generated through the creation of 800 direct jobs at the County Durham plant along with 7,500 supply chain jobs.

And for every £27,000 salaried job created, the taxpayer gains by £13,000 as a result of reduced benefit payments and the increased taxes paid by people in work.

The Northern TUC is now urging the Government to take into account the full benefits of creating new manufacturing jobs in the North East when making its final decision about the Intercity Express Programme (IEP).

Where to start in demolishing this farrago of nonsense.

Well, first, the trains would be 'bought from abroad' and simply assembled in the UK.

So the 800 direct jobs is out by at least a factor of four.

And, if the factory was to have a future beyond IEP Hitachi would have to win Crossrail, so the creation of flat pack assembly jobs in the North East might have to be offset against the loss of skilled engineering and train building jobs at Derby.

And if the alternative to IEP is a conventional EMU the suppliers would be, in alphabetical order Alstom - up to 30% UK content including traction equipment, Bombardier - trains built at Derby
or Siemens.

Odd, while this sort of lobbying is going on that the European train builders keep schtumm.

Perhaps they see the UK market as Hitachi's tar baby?

Or perhaps they are more concerned about the Chinese and Korean threats to their heartland markets?

IEP to be swung by soft loan?

Telegrammed by Ithuriel
Subscribers to RailHub were tantalised with the following this morning...

Philip Hammond is understood to be visiting the site of a potential Intercity Express Programme rolling stock assembly plant at Newton Aycliffe in Co. Durham on Thursday 18 November. There is speculation that a rail-related announcement may be made then.

Meanwhile this from Reuters...

Nov 13 (Reuters) - The Japanese government is considering giving financial support for Hitachi Ltd's (6501.T) bid to win a high-speed railway project order in the UK, the Nikkei reported.

The Japanese government would provide a loan through the Japan Bank for International Cooperation to a railcar-leasing company that Hitachi plans to establish with a leading British general contractor, the daily said.

To be absolutely clear.

A less expensive wrong train is still the wrong train, plus 20 years to rue the wrong decision.

ATOC's response to PAC report on overcrowding

Telegrammed by Ithuriel
What a pusillanimous lot the train operators are.

Here they are responding to today's Public Accounts Committee report on rail overcrowding.

The delay in tackling capacity has coincided with the growing involvement of civil servants in buying new trains. The best way to get value for money and ensure extra capacity is delivered when and where it is needed would be to return to a situation where train operators take a greater role in ordering new rolling stock. In the early days of privatisation, train operators successfully ordered nearly £5 billion of new trains.

Who can forget Michael Roberts' impassioned conference speeches denouncing DfT's malign influence over train procurement, the ATOC paper standing up for the role of the ROSCOs against the 'Linnard Terror' and the clinical dissection of the technical weaknesses in the Intercity Express Programme.

Meanwhile, back in the reality based community...

Eye recalls a near total silence from the organisation which, like its members, will only now deliver a kicking to DfT Rail after it has been brought down and hogtied by the new Secretary of State for Transport.

On the plus side - there shall be more joy in heaven over one sinner that repents...

UPDATE: This from Ithuriel...

How perverse that the Public Accounts Committee should be economically illiterate.

In its report on train overcrowding it says that there is no incentive for the rail industry to supply extra capacity without additional public subsidy.

Then the report adds 'The Department should in future franchises require operators to take measures themselves to avoid overcrowding and to meet the costs of doing so.'

But as Bowker's Law points out, there are only two sources of money for the railway: the taxpayer and the fare payer.

So is the PAC now calling for higher fares?

UPDATE: This from Leo Pink...

Perhaps the PAC is suggesting that royalties from Sir Moir's lovely book might pay the lease rental on the odd Pacer?

UPDATE: This from Routemaster...

Or perhaps, more seriously, cross subsidy from Stagecoach's lucrative bus business?

UPDATE: This from a Mr Robert Wright of the Pink 'un...

Railway Eye might want to direct readers towards the one newspaper report that made the point about how it wouldn't be economic for franchises to have an obligation to meet an overcrowding target. It's here.

I should warn readers of a nervous disposition, however, that the DfT doesn't approve of the piece's reference to 1,300 new carriages (they're additional, not all new), nor to our claim that "barely any" has been ordered.

They claim that orders have been placed for around a quarter and that's not barely any. Otherwise, it may prove edifying reading, however.

IEP to be steamrollered as Foster rebuffed

Telegrammed by Ithuriel
Didn't DfT Rail promise that they would evaluate the Intercity Express Programme...

...alongside the credible alternatives recommended by Sir Andrew Foster?

Here is Petrol-head in the Commons yesterday:

"I said at the beginning of my statement, but perhaps I was being obtuse, that other major rail projects are under consideration, and I hope to be able to make an announcement to the House in the next few weeks.

"The Intercity Express programme is one of those under consideration. As the hon. Gentleman will know, it is an extremely complex package of projects, and the new bid that we have received from Agility Trains requires careful analysis at a technical, financial and legal level. That work is ongoing, and once we have completed it, I will be in a position to make an announcement."

No mention of credible alternatives.

Since DfT Rail's IEP team believe that there are no credible alternatives, it is clear that there is no point in considering them.

What a waste of Sir Andrew's time and our money.

And if the 'new bid' requires 'technical and financial' analysis then the 'legal' is essential as Alstom, Bombardier and Siemens will surely protest.

UPDATE: This from The Archer...

Based on recent events Alstom will be protesting whether the ‘new bid’ is a New Bid or not.

Incidentally, if Agility Trains do go ahead with their North East investment plans any chance we could rename the project 'Whey-aye EP'?

Exciting new design for the IEP?

Telegrammed by Ithuriel
According to everyone's favourite railway fortnightly this is the new name for the IEP

ボイジャー

Hitachi have made a five car EMU eliminated the power car and increased the number of underfloor 'donkey engines' to give enough power to match IC125 performance away from the wires.

That sounds like a diesel engine under the middle three cars with the electrical gubbins under the driving cars.

A design that appears to have much in common with the 子午線.

Great minds thinking alike or the Japanese perfecting yet another European design?

Hammond - all talk and no trousers

Telegrammed by Ithuriel
To recap on Bonusgate...

According to the Guardian report on the Network Rail AGM, . 'There were 37 votes in favour of the pay report, 31 against and nine active abstentions, including the Department for Transport's single vote'.

Oh yes, DfT is indeed a member.

And Mr Hammond has been writing to Ricky Haystacks asking him to go easy on the Iain Coucher Classic Car fund payments.

Not only that but the Prime Minister's spokeswoman said that Mr Cameron was 'disappointed'.at the news of the vote in favour of moolah-all-round.

So come on Phil - why did DfT abstain?

Another bloody nose for DfT Rail.

Telegrammed by Ithuriel
More bad news for the Department for Transport

Having failed to get any money out of the ROSCOs, DfT Rail has now lost its challenge to SWT's cap & collar claim at arbitration.

Still at least they didn't go to court, saving a few millions in legal costs.

How long before someone takes responsibility for these bad judgments and resigns? (Presume this is rhetorical question - Ed)

Thameslink 4000 start date - Shocker

Telegrammed by Ithuriel
Spot the deliberate mistake...

This from Network Rail's resource library:


The next generation of 12-car trains will begin operating in 2012, with a full fleet in service across the Thameslink route by 2015.

Operating in 2012?

Shome mishtake shurely.

Especially since NR doesn't know when London Bridge will be completed.

Rain forest vanishes in DafT photocopier

Telegrammed by Ithuriel
This Written Answer from the Noble Lord given on the 10th March:

In the latest year for which figures are available, the Department for Transport spent £328,471 on photocopier paper.

This figure excludes spend by the Vehicle Operator Services Agency, which could only provide the information at disproportionate cost.

£328,471!

On photocopier paper!!

And how much of that was down to the late and unlamented IEP?

Underground musings...

Telegrammed by Ithuriel
With Tube Lines over-time on resignalling and way-over the PPP Arbiter's budgetary allowance can it be before the Government calls in its project doctors of choice?

Jubilee Line Extension running late and over budget threatening the opening of the Dome - boot out inefficient old London Underground managers and bring in Bechtel.

West Coast Route Modernisation running late and over-budget - boot out inefficient old Railtrack managers and bring in Bechtel.

How long before the inefficient old Tube Line managers are also booted out and Bechtel are called in to fix the mess?

(Shome mishtake shurley Ed)