How to negotiate with the Private Sector, No 94

Exciting news on Ministers' determination to get value for money from franchises!

Eye understands that the latest model, a five point plan known as the Pentangle, is both simple and effective and has even been signed off by the Devil .

New Ministerial Five Point Plan as follows:

1. Start off with at least two bidders, or one and a public sector comparator.

2. Stand down all bidders bar one, and immobilise the public sector comparator.

3. Confirm that only one private sector company is in the running. No, really!

4. React in a surprised fashion when the sole bidder bends your department over a table and rogers it senseless.

5. Thank the sole bidder manfully, then stick telephone directory down what is left of trousers before inevitable meeting with Treasury, PAC, NAO, TSC, etc...

Eye kids you not.

Siemens confirms further delay to Thameslink signing

This from Siemens...

THAMESLINK ROLLING STOCK PROJECT UPDATE

Steve Scrimshaw, Managing Director of Siemens Rail, today commented:

“The Thameslink negotiations are ongoing and although we are disappointed that they have taken longer than anticipated, we are making good progress and we remain confident that we will achieve closure of this important deal.”

“Our project team is in detailed negotiations with the Department for Transport and in daily contact with them and other key stakeholders.”

“Depending on progress over the next month or so, we hope to achieve commercial close by Christmas with financial closure in the new year".

"We have been forging ahead with the manufacturing planning of our Desiro City train for Thameslink, the second generation commuter train based on the very successful Desiro UK train. We are already well advanced with our plans for the start of vehicle testing at our dedicated test track later this year.”

"Having already invested well over 50 million Euros – at our own risk - in its development, I look forward to the Desiro City train taking pride of place on the UK rail network."

ENDS 

And in more good news for the beleaguered DfT, additional delays in ordering the Thameslink fleet will mean newly electrified routes in the North will have to be served by diesel trains.

McLoughlin & Rutnam in front of TSC today

This from the Transport Select Committee...

ORAL EVIDENCE – WEST COAST MAIN LINE FRANCHISE 

The Transport Select Committee will call the Secretary of State for Transport, Rt Hon Patrick McLoughlin MP, and the Permanent Secretary at the Department for Transport, Philip Rutnam, to give oral evidence on the cancellation of the competition to run the West Coast Main Line franchise.  

Wednesday 31 October at 2.45 pm

Location:  Grimond Room, Portcullis House

Announcing the session Tranport Committee Chair Louise Ellman MP said:

“It is astonishing that the Government has had to cancel the West Coast Main Line franchise competition and delay other competitions. Just last month the Secretary of State told us that he was content with how the Department for Transport had handled the West Coast Main Line competition and that Virgin’s challenge to the outcome would be defended robustly. 

“I expect the Department’s review of what went wrong to be available by the end of this month and we will want to examine that very carefully. We will also want to know how much this episode has cost the taxpayer, what lessons will be learnt, and what will be the wider implications for franchising. In addition, I expect the Committee to look closely at the Government’s review of franchising when it is published at the end of this year."

ENDS

You can view the session live here.

DfT - the big question post Laidlaw

Now that the DfT is officially broken...

Who will be sent in to fix it?

Anyone have an answer?  

(Apart from FCP and DOR obviously. Ed)

Cautious RfG welcome for NR/DBS depot deal

This from the Rail Freight Group...

Consultation launched over reform of rail freight property

Commenting on the Network Rail / DB Schenker consultation on reform of rail freight property, Maggie Simpson, Executive Director, Rail Freight Group, said: 

“We welcome this consultation setting out the proposals for reform of DB Schenker's land and property interests. The proposed deal offers strategic benefits for the growth of rail freight by separating land ownership from rail haulage, and by encouraging Network Rail to take a proactive role in developing the freight business.”

“However, this is a complex deal, and RFG members and rail freight customers are likely to have legitimate concerns over any impact on their businesses. It is imperative that they respond to this consultation, and that Network Rail and DB Schenker address all concerns in full prior to the conclusion of this deal.” 

ENDS

Network Rail's consultation can be found here.

Philip Hammond - a gift that keeps on giving

This from yesterday's interim Laidlaw report...

And this from Eye favourite Petrol-head Hammond on 19 May 2011...

Amongst other proposed changes, we intend to replace the current “cap and collar” revenue sharing system that has driven perverse behaviour by train operators, with a GDP-based risk-sharing arrangement and a profit-share mechanism which will ensure the taxpayer benefits from any unexpected profits over the term of the franchise.

Because relaxation of full prescription of train services in line with Sir Roy’s recommendations was not signalled in the consultation document that we published on 19 January, I have decided that it is right and proper to consult on these proposals again, starting today, and ending on 17 August.  As a consequence of this decision, Mr Speaker, I can inform the House that the new franchise on the Intercity West Coast will now be awarded in August 2012, after a competitive process involving the four shortlisted train operators, and will commence operations on 9th December 2012.  In making this decision, I have deliberately avoided a change of franchise immediately ahead of or during the Olympic period and have also decided to take advantage of the short delay to complete the integration of the 106 new Pendolino carriages into the fleet prior to the commencement of the new franchise...

Longer franchises and a changed relationship with Network Rail will have a positive impact on the behaviour and appetite for investment and risk taking by train operators.  But I want to send a clear message that the new culture of cooperation in the rail industry, and the focus on cost reduction, is here to stay and it is mandatory, not optional.  So I can today announce that, as a matter of policy for all future franchise competitions, a significant part of the assessment of bidders’ capability at the pre-qualification stage will be evidence of success in collaborative working and driving down costs.

Success in driving down costs? 

With the ICWC debacle costing taxpayers at least £40m without a wheel turning in anger perhaps we can all afford ourselves a hollow little laugh.

Update: This from a Mrs A P Tis...

Perhaps all the DfT's current problems over the WCML can really be tracked back to individual political opportunisim?

Christian Wolmar writing on the 17th September 2010:

"Talking to a well informed source at the Rail awards last night, I learnt that the Department for Transport has become one of the first departments to agree a budget with the Treasury. The transport secretary, Philip Hammond, has not only accepted the Treasury figure, but he has done so quickly because he wanted to jump over the table to sit on the other side of the Star Chamber. So now he will sit alongside Osborne and Alexander pronouncing on the budgets of other departments.
        
"In a way that is hardly surprising. Hammond never wanted to be Transport Secretary. He is a Treasury man through and through, and now, with Osborne about to become the most unpopular man in Britain after Ashley Cole, he must reckon that, having been shafted over the Chief Secretary job because of the deal with the Libdems, he has a chance of the big job in a year or two. By the time the damage he is wreaking in transport starts to become apparent, Hammond will not be in Marsham Street".

Mystic Wolmar indeed!

Official Railway Eye Laidlaw Joke

Welcome to the Official Railway Eye Laidlaw Joke!

And here it is:

Q: How come everyone who knows how to run the railway is either cutting hair, driving a taxi or in a 'matrix'?

A: "Unfortunately, no one can be told what the Matrix is. You have to see it for yourself."

Indeed.

ICWC - Unleash the NAO

This from the National Audit Office...

Work in progress: Cancellation of the competition for the Intercity West Coast franchise

Study outline

The Secretary of State for Transport announced today (29 October 2012) the interim findings of the Laidlaw Inquiry into the reasons for the cancellation of the competition for the Intercity West Coast franchise. The Department has also given the National Audit Office access to many of the documents and other evidence supplied to the Laidlaw Inquiry. On the basis of that examination we can confirm that the information that we have seen supports the initial findings made by the Laidlaw Inquiry on what happened and the contributory factors. 

As the Laidlaw Inquiry has highlighted, there are limitations on the conclusions that we too can draw at this stage.  We are conducting further inquiries and once these are completed, we will report to Parliament to provide assurance including on the extent to which wider issues are raised  and are likely to affect the Department’s other projects and programmes, for example concerning:

• the Department’s approach to developing and quality assuring models and other technical tools which it uses;
• the operation of key committees including the information provided to them and how decisions are recorded;
• the rigour with which the Department follows required processes; and
• the skills and capacity available to run projects and programmes.

Reporting schedule

We aim to publish this report before Christmas 2012.

ENDS

DfT: Statement on Laidlaw Inquiry

This from the Department for Transport...

West Coast Main Line: Laidlaw Inquiry interim findings...    
 
The independent inquiry into the Department for Transport’s handling of the franchise competition to run the West Coast Main Line has submitted an initial findings report to Transport Secretary Patrick McLoughlin.

In the interests of transparency, Mr McLoughlin has today published that report, alongside a covering letter, and this afternoon delivered an update to Parliament about this report and wider progress on ensuring continuity of service on the West Coast Main Line.

Sam Laidlaw, the senior business figure and DfT non-executive director leading this independent review, has asked the DfT to release the following statement on behalf of his inquiry:

    “In the limited time available this is necessarily only a preliminary report. What is clear however is that in seeking to run a complex and novel franchising competition process, an accumulation of significant errors, described in the report, resulted in a flawed process.

    “These errors appear to have been caused by factors including inadequate planning and preparation, a complex organisational structure and a weak governance and quality assurance framework. The full causes and the lessons to be learnt will be addressed in the final report of my independent Inquiry to be published at the end of November.

    “Firm judgments should not be made based upon what are provisional findings or wider conclusions drawn at this stage.”

ENDS

No mention of the "inconsistency in treatment of ICWC bidders" referred to by the SoS in the House.

UPDATE: Interim version of Laidlaw Inquiry report published here.

McLoughlin to issue ICWC statement this afternoon

So. Transport Secretary Patrick McLoughlin is appearing before the House of Commons today to give an update on the InterCity West Coast franchising fiasco.

Interesting that this is taking place two days before he is due to attend the Transport Select Committee with Philip Rutnam, the DfT's Permanent Secretary.

Also interesting that this announcement was not scheduled in Commons' business until 13:00 today (in the slot reserved for 'Ministerial Statements' - probably some time after 16:30).

And finally it is worth noting that this statement is taking place after Sam Laidlaw was due to present the interim results of his Inquiry into the West Coast fiasco last Friday.

With various comings and goings expected at Marsham Street in advance of this afternoon's statement it could all get very interesting.

Eye survey cancelled - Official Statement

Following disclosure of significant failings in Eye's latest survey on IEP costs the following statement has been issued:

IEP cost comparator survey cancelled

The Fact Compiler has today announced that the survey on IEP costs has been cancelled following the discovery of significant technical flaws in the way the process was conducted.

The decision means that Railway Eye readers will no longer be able to vote on comparative costs between IEP and Pendolino vehicle diagrammes in a poll due to expire on the 31st October. It is consequently no longer contesting the judicial review sought by Mr Kipling in the High Court (Is this right!?! Ed).

The flaws uncovered relate to the way the survey process was conducted on Railway Eye. An announcement will be made later today concerning the suspension of staff while an investigation takes place.

Railway Eye is resolving urgently the future arrangements for Eye surveys and will ensure that a normal service of bile and invective continue uninterrupted. The Fact Compiler stressed today that passengers and tax payers will continue to be ill served by the Incredibly Expensive Procurement.

The Fact Compiler has also:

• ordered two independent reviews to be undertaken urgently: the first into what went wrong with the Eye poll and the lessons to be learned (note this will be significantly delayed, if it appears at all), the second into the wider use of surveys on Railway Eye, both overseen by leading business figures...

Cont' for the next 94 months at least...

Things go from bad to worse at DfT?

This from a Mr L J Breeze...

These are increasingly desperate times at the Department for Transport, judging by this picture taken at the Duffield station of the Ecclesbourne Valley Railway yesterday.

If the Secretary of State has taken to consulting the Soi Disant Veteran Observer then we are all doomed.

Perhaps he would have got more sense out of the dog?

UPDATE: This from Chionanthus Virginicus...

In view of the Soi Disant's alleged sideburns (they look like "Wiggo" stick-ons to me) are we to assume he was asking the SoS to ensure the new franchising agreements will include specific requirements for the provision of additional cycle space on trains?

This of course would be part of the "legacy" benefits from the 2012 Olympic success.

UPDATE: This from the Soi Disant Veteran Observer himself...

I have emailed you several times to request that you stop referring to me in these derisory terms.

As I have pointed our before this is neither big nor clever!

Rather than replying to my emails you prefer to publish them, but in truncated form, which you seem to consider funny. 

If you do not desist I will be forced to... (Sadly, owing to pressure of space, we are unable to publish the rest of this email from the Soi Disant Veteran Observer. Ed)

EXPOSED: Thinly capitalised equity profiteer of worst kind!

Shocking news from Eye.

After four years of editing this blog for free The Fact Compiler has decided that it is time to accept advertising!

With well over 10,000 unique visitors a month using Railway Eye to catch up on the latest industry news and gossip you know it makes sense.

So a big favour requested of all readers - please click on the Passenger Transport ad on the right hand menu bar, so that we can continue to provide an unparalleled service of bile and invective to discerning railwaymen and women.

And whilst you're there, why not buy a subscription to Passenger Transport.

Did we mention that Railway Eye's first ad is from Passenger Transport? (Yes. More than once! I hope they're paying for this? Ed)

Remember. Vote early, vote often!

Burns Lite - McLoughlin in jobshare Shocker

This from the blog of the Rt Hon David Lidington MP, with a bowler tip to @PrimlyStable...

So perhaps officials could tell us precisely how many Secretary of States we now have in the DfT?

Eye helps DfT with rolling stock sums

To commemorate Alstom's delivery of the final vehicles for the Extendolino fleet it's time for an exciting new Eye survey!

Ever keen to play a constructive role, Eye is inviting readers to help the numerically challenged Department for Transport with its rolling stock sums.

Remember - value for money is absolutely central to the railway of today!

So using your skill and judgement can you determine the difference between the cost of a diagrammed Pendolino and IEP vehicle?

As ever the poll is on the right hand menu bar - remember vote early, vote often! 

ToT puts RDG tanks on RIA & ATOC lawns

This from the Gruan interview with Tim O'Toole in advance of the Bradshaw Lecture...

Q: The train operators appear to have a bumpy relationship with Network Rail at the best of times. How will the RDG improve that?

A: Once the RDG is formalised, it will force Network Rail and the train operators to make the whole structure of the industry coherent. We do not want separate bodies, all of whom seem to have a separate piece of the industry. We want them organised into a more unified structure under the RDG, so we don't have an uncoordinated industry representing itself to the government and the public.

Eye readers might find the following explanation of RDG and ATOC membership helpful.

And no room of course for the supply chain or indeed the Roscos at the top table of ToT's exclusive new club.

Brown Review - Partnership is key

Eye understands that Richard Brown is busy assembling a team to work on his Review.

According to sources they are likely to be absolutely first class.

Is this perchance now the Review of Last Resort?

UPDATE: This from Our Man at 222 Marylebone Road...

So Richard Brown and DOR are recruiting from the same pool of ex-British Rail retreads.  

Will their gangmaster turn a blind eye to possible moonlighting in this overheating market? 

UPDATE: This from Sir Humphrey Beeching 

Allow me to commend my former DfT colleagues on their Value for Money approach.

I quote… 

As for longer franchises, the best case for them
is if they are to become the vehicles for
investment - not just rolling stock, but the
infrastructure too. Chiltern’s 20-year franchise is
a great example. Without investment the case for
longer franchises is a lot thinner. 

There is also a case for more flexible contracts
for the commercial railway – allowing TOCs to
tailor the timetable more closely with market
requirements. Allowing commercial TOCs to
take the revenue risk is also sensible. Allowing
social TOCs to do so is not so sensible: there the
emphasis should be on service quality and cost
effective delivery 

That’s your report written then Richard. Shall we perhaps retire for luncheon?

UPDATE: This, perhaps surprisingly, from the late Simone Mirman...

I 'ave noticed that the leather petit chapeau noir has been seen across Le Town a domain.

From the oh-so chic ABBey all the way to les tres unfashionable TERminus.

C'est magnifique! Mais ce n'est pas la gare. Non?

UPDATE: This from Aristotle...

If you keep asking the same people the same question do not surprised when you keep getting the same wrong answer.

Is there nobody left from OPRAF days who can approach the question of Franchising from a different direction?

Burns Lite - Don't know, don't care

Burns Lite - an occasional series highlighting the breadth and depth of knowledge held by officials in the Department for Transport.

This from Simon Burns, Minister of Transport, given in the House of Commons yesterday (with a bowler tip to Ithuriel)...

Ian Davidson (Glasgow South West, Labour)
To ask the Secretary of State for Transport what the level of public subsidy was for each year of the West Coast Mainline franchise when operated by Virgin Trains; what the level was of fare box revenue in each year of that franchise when operated by Virgin Trains; and what the at-risk investment was from Virgin Trains for the duration of that franchise.

Simon Burns (Chelmsford, Conservative)
All of this information will be contained in Virgin Rail Group's statutory accounts, which can be obtained from Companies House at: http://www.companieshouse.gov.uk

Once Eye would have castigated DfT for such a shockingly lazy answer.  

Now we assume that either DfT just doesn't know or worse still, doesn't even care.

UPDATE: This from Chartist Bob...

Burns Lite seems a very good title for Eye's new feature.

You may also be interested to know that the Minister of State's academic prowess has already been honoured by the awarding of the sobriquet: 'Third Degree Burns'.

Update: This from the Haywain...

Before I dash off to buy umpteen years of Annual accounts for Virgin Rail Group Limited, I note that the press release put out by Virgin on 28th August clearly states that: "Virgin Trains Limited commences proceedings in respect of West Coast Mainline franchise award".

So which of the two company's accounts are the details in?

Unless of course they are in those for Virgin Rail Group Holdings Ltd?

Idiots About The Line - Soham

Time for an exciting new Eye feature - Idiots About The Line!

Our first entry comes from the Newmarket Journal...

Eye salutes Rosemary Aitchison, chairman of Soham Town Council, Cllr James Palmer, Cllr Peter Moakes, Geoffrey Van Orden MEP and Cllr Tom Hunt for trespassing on the railway, putting their lives at risk and potentially scaring the living b'Jesus out of some poor train driver.

Hopefully the BTP will soon be knocking on various doors to advise the above individuals of the exciting prizes fines that await them...

UPDATE: This from the Wisbech Standard 24...

Red faced councillors including East Cambs District Council leader Peter Moakes apologised to Network Rail for standing beside the track at Soham in Cambridgeshire when they toured the district with MEP Geoffrey Van Orden. 

Very good.

The benefits of privatisation explained - No 94

This from Railnews...

CANCELLATIONS of London Midland services are set to continue until December, the operator has warned. More than 60 trains are set to be cancelled in the Birmingham area today alone, because of an acute shortage of drivers...

London Midland commercial director Richard Brooks apologised for the problems, and added: "The challenge is that it takes over 12 months to recruit and train a driver, yet we will lose drivers after three months if they choose to go elsewhere."

And from Aslef, perhaps unsurprisingly, not a word.