Virgin hits the buffers Rail Professional opinion
Katie Silvester, Editor T
he next West Coast franchise has been awarded to FirstGroup, effectively putting Virgin out of the rail industry. Virgin boss Richard Branson has said that it’s unlikely that the company will bid for any more
rail franchises. The colourful Virgin Trains brand will be much
missed – it has been a popular operator of services. At one time, Virgin, which is a joint venture between the Virgin group and Stagecoach, had two franchises, but lost CrossCountry to Arriva.
Branson has been very vocal about the failings of the franchising process, which has seen it lose out on the East Coast franchise twice in the past. The first time Virgin lost out to GNER, then to National Express, both of which put in higher bids than Virgin and then had to back out of the franchise early because they had promised premiums they could not meet. This time it has lost out to First, which had also put in a higher bid than
Virgin. Branson believes that he had again put in a realistic bid to retain the West Coast and that First’s winning bid was too high and may not be sustainable.
Has First been as reckless as National Express and GNER with its bid that promises £5.5bn over the life of the 13-15 year franchise? FirstGroup is a very experienced operator and it has had to put up a £45m performance bond, which it would lose if it pulled out early. It will need to see ticket revenues rise by 10 per cent each year in order to meet its premium payments. Some would say that’s very ambitious. There would be other financial penalties as well if it ditched the West Coast early. Having handled several different types of franchise now, First has done better on some than others. First Capital Connect and ScotRail generally tick all the boxes, in terms of meeting franchise commitments, but there were problems on Thameslink for a while when a shortage of drivers led to a lot of cancellations. As an owning group, First is not known for going the extra mile to reach out to passengers. But it is quite financially astute. First’s obsession with putting ticket barriers into every station possible, for example, is not particularly popular with passengers, but it is popular with the DfT – and it is the department that makes the decisions. First Great Western has had its issues, of course. Performance was awful for a while and it’s well-known for overcrowding. But the overcrowding has improved and remaining problems are more to do with lack of capacity on the Great Western Main Line than any mismanagement on First’s part (see Mark Hopwood interview pages 12-17). What impact could the West Coast outcome have for other franchise competitions?
Before this disappointment, Virgin was rumoured to be interested in bidding to run the trains on HS2, when that opens. Its experience of running Pendolinos would have helped with this. Keolis, too, is apparently to be interested in the HS2 franchise, in whatever form it takes. Keolis had also been shortlisted for the West Coast franchise. As the international wing of SNCF, it certainly has experience of running high-speed trains – trains that make Pendolinos look like Thomas the Tank Engine by comparison. But winning the West Coast would have helped Keolis too. Next year will see the Great Western franchise awarded. If First manages to hang on to this, it will run a substantial chunk of the UK’s rail network. With West Coast under its belt, the transport group would be in a strong position to try for East Coast and HS2 – but would the DfT award both the East Coast and West Coast franchises to the same operator? That remains to be seen.
PAGE 4 SEPTEMBER 2012
News in brief
ORR consults on formalising RDG The voluntary basis of the Rail Delivery Group is unsustainable, the ORR has decided. It is inviting views on formalising the group by creating a company limited by guarantee, and on licence conditions needed to enable the change. The Rail Delivery Group was convened as a result of the McNulty report, to bring industry leaders together to provide leadership.
Angel invests in 317 trials Angel Trains has signed a contract with Bombardier Transportation for the re-traction of a Class 317 unit to develop the fleet as a viable, reliable, economic and long-term alternative to new trains. A £7m investment in the re-traction and refurbishment of a pre-series unit focuses on continued service operation, reducing costs and improving reliability.
Scotland’s performance highly rated Transport Scotland’s Squire (Service Quality Incentive Regime) monitoring system has shown improvements in a range of key areas for ScotRail. Over the last year, ticket offices, station shelters, graffiti removal, train and station staff, train cleanliness and onboard ticket inspection were all recognised as areas where standards were consistently high.
Nottingham gets £100m new start
A complete redesign of tracks and signals, six miles of re-laid track and more than 140 new signals, plus new and refurbished station buildings, all form part of a £100m Network Rail scheme for Nottingham, which will be completed in December 2013. Work began in July.
Cleaner finds missing Olympic tickets
Greater Anglia train cleaner Gaspare Giarracco saved the day when a mother and son’s mislaid Olympic tickets were found in a bin at Liverpool Street station. The pair had accidentally left the prized tickets on a train along with some rubbish when they disembarked at the station.
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