Wednesday, 12 June 2013

ORR goes in for mystic accounting?

This from Alecto...

What a marvelous piece of fiddle factor in ORRs determination of Network Rail's net revenue requirement (p 29):

  • "We then look at financial indicators and adjust the level of amortisation so that Network Rail‟s financial sustainability is not unduly affected by this approach (hence the term "financial sustainability adjustment")."
But "financial sustainability adjustment" sounds so much more professional. 

As in: "Here you go guv', including parts, labour and err... financial sustainability adjustment
that'll cost you £37.9bn."

ORR back-tracks on Biomass charging

This from the Rail Freight Group...

Rail Freight Group (RFG) today welcomed the ORR’s decisions on freight charges announced as part of the Draft Determination of the Periodic Review 2013.

As part of a package of reforms, ORR have concluded that;

  • Biomass will not be subject to a new freight specific charge in control period 5.
  • Increases in the variable access charges for freight will be capped at an average 10% compared to the 23% previously announced.  This is likely to reduce charges for intermodal traffic, and limits the impact of rises in the bulk markets such as aggregates and steel.
  • The proposed 400% increase to the capacity charge for freight will not be implemented and a revised approach will be developed.
  • The previously announced caps on the freight specific charge for ESI coal, iron ore and spent nuclear fuel will be reduced.  For ESI Coal, for example, the cap will reduce from £4.04 to £1.04 per kgtm.
Maggie Simpson, RFG Executive Director said today "We are pleased that ORR has listened to the concerns of the industry and has taken a balanced decision that is affordable and fair.  This will be a great relief to rail freight operators, customers and those seeking to invest in the sector who can now develop their business plans with confidence."

A good result!

RfG showing how lobbying should be done.

UPDATE: This from Steve Strong...

Bit of an embarrassing climb down from ORR then?

Presumably no one bothered to salute this when they ran it up the flag pole?

Burns Lite - Seeing the light on DOR

Has Simon Burns had a Damescene conversion?

Regular readers of Eye will recall that Third Degree Burns recently described nationalised East Coast as having 'plateaued', and compared it unfavourably with the triumph of private sector innovation that is Beardie Rail.

So what are we to make of these saccharine words from Mr Toad, made during the 5th June Westminster Hall debate on the East Coast Main Line...

"...after an extended and successful period of public ownership..."

"East Coast has delivered a great deal in the past three-and-a-half years of public ownership..."

"The operation of train services by DOR is an essential part of the privatised franchising model."

Words that will no doubt do something to restore the battered morale of his own people holed up in One Kemble Street.

And perhaps more to the point ensuring that DOR has at least some chance of recruiting the skilled people needed to run future franchises, such as errr.. Great Western, for instance!

UPDATE: This from Ithuriel...

It is interesting to note how the civil servants have been desperately trying to re-chip Simon Burns as they realise that rubbishing East Coast and, by implication operator of last resort Directly Operated Railways, reduces the effectiveness of their deterrent against the rapacious bus bandits when it comes to negotiating  franchise extensions.

All this is rather akin to the Defence Secretary saying, "Frankly old boy, our missiles are so rubbish that even if they launched we'd be lucky to hit Russia let alone Moscow and anyway, the warheads can't be guaranteed to go off if it's raining"...

But we suspect the new tone is a wasted effort since even this Government must have worked out  that if they called the bus bandits bluff and installed DOR then Labour would have a political field day over yet another renationalisation.

With a general election less than two years away there is no way DfT can afford to admit that franchising has failed, again.

So fill your boots bus-bandits, because Burns has all but conceded that DOR is now a paper tiger!

ORR Draft Determination exposes inflation - Shocker!

This from Captain Deltic...

The Office of Rail Regulation's Draft Determination under Periodic Review 13  (PR13) published today occupies a staggering 813 pages.

The PR08 Draft Determination required just 372 pages.

So that is an 118% increase in five years.

The draft conclusions for the PR03 interim review required a mere 211 pages - and that in the aftermath of  the collapse of Railtrack.

So Richard Price, running a well established process for a relatively stable industry, needs four times the space of Tom Winsor whose interim review was written at a time of near anarchy when the government maintained radio silence on its requirements.

As Flanders and Swann nearly wrote:  "It all makes work for the Regulatory man to do".

Perhaps time for an efficiency review of ORR?

Great Western franchise - DOR activated

This from The Brothers...

RAIL UNION RMT revealed today that it has been officially notified of a rescue plan to bring in the publicly owned Directly Operated Railways to run the major Great Western franchise between London, Wales and the South West, fuelling speculation that talks on a contract extension with First Group, due to be announced in the next few weeks, are in trouble.

RMT has received the following notification from DOR:

“GW Railway Ltd, a wholly owned subsidiary of Directly Operated Railways, has today submitted applications to the Office of Rail Regulation (ORR) for a Safety Certificate (Part A and Part B) and Safety Authorisation in respect of undertaking train and station operations on the Great Western Franchise (i.e. the line of route currently operated by First Greater Western), should current negotiations between the Department for Transport and First Group, on a short term extension to the franchise commencing in October 2013, fail to reach a satisfactory conclusion.“


UPDATE: This from First Group...

Our negotiations with the DfT in respect of an extension to the First Great Western franchise are, contrary to claims by the RMT, progressing well.  Our proposal is not due to be submitted to the DfT until next month.

The step taken by DOR to register a safety certificate is usual practice and reflects the fact that the process to achieve a safety certificate takes sixteen weeks.  This process is expected to take place in respect of all potential single tender agreement awards for franchises.

First Great Western has also registered for a safety certificate in respect of an extension to the franchise.

UPDATE: This delightful non-sequitur from Maria the Eagle..

David Cameron and his Ministers must come clean if they are preparing to take over Great Western rail services. Passengers deserve to know the truth about the future of the rail services on which they depend.

The plan to extend existing franchises is collapsing into chaos. This is a direct consequence of the misguided decision by Ministers to prioritise a costly and unnecessary privatisation of rail services on the East Coast ahead of getting the rest of the rail network back on track. 

The Government should accept it has got this wrong and allow East Coast services to continue to be run on a not for private profit basis. It will be a scandal if even more taxpayers’ money is wasted, adding to the £55 million that has already gone down the drain thanks to the franchising fiasco for which David Cameron and his Ministers were responsible.

UPDATE: This from a source close to DOR...

You know of course that DOR went through exactly the same process during the negotiations to extend both the West Coast and Essex Thameside (C2C) franchise?

Still, not like the RMT to let the facts get in the way of a good story...