N Gauge Forum

General Category => Real Railway Discussion => Topic started by: Skyline2uk on May 16, 2018, 12:23:58 pm

Title: East Coast to be Nationalised....Again?
Post by: Skyline2uk on May 16, 2018, 12:23:58 pm
I am being very careful to stick to forum Rules, there is to be no political comments made here and I wonít post copywrite material.

However, my news App has just popped up with a story (an exclusive for The Telegraph apparently) suggesting the Government is about to pull the East Coast line back into public ownership again.

Given that this is the second time since 2009, it has me wondering why that route (a former BR Flagship) seems to struggle to return profits for private owners? I suspect I am massively simplifying things there....

Anyway, an interesting potential development.

Skyline2uk
Title: Re: East Coast to be Nationalised....Again?
Post by: Buzzard on May 16, 2018, 12:41:48 pm
Given that this is the second time since 2009, it has me wondering why that route (a former BR Flagship) seems to struggle to return profits for private owners?

This from The Economist sheds some light, hopefully whilst staying within Forum rules

"On February 5th Chris Grayling, the transport secretary, announced that Virgin East Coast, the franchisee that operates trains on the line for the government, is near collapse. Passenger numbers and revenues have undershot forecasts since the eight-year contract began in 2015. As a result, the firm is running out of money. Virgin East Coast is not the only franchisee that has faced financial ruin running the line. Previous operators forfeited their contracts in 2007 and 2009 after revenues failed to meet forecasts."

So reading this it's forecasting errors by the franchise owner when they bid and then they realise they cannot make/afford payments to HM Treasury.
Title: Re: East Coast to be Nationalised....Again?
Post by: woodbury22uk on May 16, 2018, 12:45:56 pm
The government announced this several months ago about the same time as they extended Virginís West Cost franchise. It was always on the cards that it would have to be government run until a new franchise can be formulated and let. Virgin/Stagecoach claim that route improvements have not been completed (some not even started) and the governmentís economic forecasts have not been met, both affacting ridership.

The Commons Transport and Finance Commitees have both criticised the Department of Transportís poor management of the franchising process.

East Coast does not attract the predicted traffic volumes time after time, which suggests to me that the someone somewhere does not understand the demographics.
Title: Re: East Coast to be Nationalised....Again?
Post by: njee20 on May 16, 2018, 01:06:38 pm
East Coast does not attract the predicted traffic volumes time after time, which suggests to me that the someone somewhere does not understand the demographics.


This, many times this! It's the same failing each time. I'm not sure if the passenger volumes have been flat or are growing, just not at the predicted rate, but why have successive franchisees made the same error. I get that it's the 'flagship route', although I'm not sure why, but quite why the projections are consistently off I don't understand!

As an aside isn't a slightly strange state of affairs when people worry they can't post on a railway forum about a railway topic without breaching forum rules!?

Edit: it's on the BBC now. (http://www.bbc.co.uk/news/business-44142258)
Title: Re: East Coast to be Nationalised....Again?
Post by: Skyline2uk on May 16, 2018, 01:19:39 pm
Quote
I get that it's the 'flagship route', although I'm not sure why

When I say ďflagshipĒ, I personally recall the days of Deltics hammering up and down the route, the HSTs and then 91s for BR. BR seemed to put the new stuff on this route in preference to the West Coast, possibly influenced by the mighty A3s and A4s that went before? Just my view that.

Quote
As an aside isn't a slightly strange state of affairs when people worry they can't post on a railway forum about a railway topic without breaching forum rules!?

Thatís just me being over paranoid, aware that I have views that I donít wish to betray even if itís unintentional. I have no problem with the forum rules  :thumbsup:

Skyline2uk
Title: Re: East Coast to be Nationalised....Again?
Post by: njee20 on May 16, 2018, 01:25:30 pm
Yes, I didn't mean your comment, it's commonly referred to as the flagship franchise, I can't see it being the most lucrative (WCML?) or busy (SWML?) so whether this just harks back to those halcyon days of the named expresses charging up and down behind the best stock we had. You're certainly right that it seems to have consistently received preferential treatment as far as rolling stock goes for 100 years or so!
Title: Re: East Coast to be Nationalised....Again?
Post by: Skyline2uk on May 16, 2018, 01:41:32 pm
Lucrative is an interesting point isnít it?

I mean surely a railway has an inherent limitation in that, it makes its money by taking people where they want to go, but canít change where it goes (easily anyway).

I suppose you can pitch the WCML against the ECML broadly by saying ďwhich ones gets me to Scotland / London quickest / easiest / cheapestĒ, but thatís incredibly broad brush.

End of the day, itís a service. It gets people from one place to another and normally back again. Becoming lucrative at this means getting the service right to get passengers and max profits by lowering outgoings (also very very top level description that).

I suppose it all goes back to @woodbury22uk (http://www.ngaugeforum.co.uk/SMFN/index.php?action=profile;u=1599) point, fundamentally getting the number of passengers willing to go A to B via ECML wrong.

Incidentally; how much longer do we think the 91 fleet and MK4s will remain in service? Will they see 40 years like the HSTs  :hmmm:

Skyline2uk

Title: Re: East Coast to be Nationalised....Again?
Post by: NeMo on May 16, 2018, 02:07:35 pm
East Coast does not attract the predicted traffic volumes time after time, which suggests to me that the someone somewhere does not understand the demographics.
This, many times this! It's the same failing each time. I'm not sure if the passenger volumes have been flat or are growing, just not at the predicted rate, but why have successive franchisees made the same error.

Part of the problem is that whereas the WCML connects up lots of really big cities and their satellite communities, the ECML largely does not. Between, say, Peterborough and Doncaster there's a whole bunch of nothing. Then there's York and Newcastle of course, and Durham in between, but not much else until you reach Edinburgh.

Compare that with the WCML, where you've got Milton Keynes, Coventry, Rugby, Birmingham, Wolverhampton -- and that's just the Midlands section of the route. From Crewe onwards there's the Manchester and Liverpool area with all their busy satellite towns, and it doesn't really become bleak until you get north of Lancaster.

In short, I think that the WCML has a lot more potential for shorter-haul intercity services compared with the ECML.

Cheers, NeMo

Cheers, NeMo
Title: Re: East Coast to be Nationalised....Again?
Post by: Skyline2uk on May 16, 2018, 02:14:29 pm
Quote
Part of the problem is that whereas the WCML connects up lots of really big cities and their satellite communities, the ECML largely does not. Between, say, Peterborough and Doncaster there's a whole bunch of nothing. Then there's York and Newcastle of course, and Durham in between, but not much else until you reach Edinburgh.

Hence past investment in ďTop LinkĒ fast non-stop services between what large cities there are on the ECML?

Skyline2uk
Title: Re: East Coast to be Nationalised....Again?
Post by: njee20 on May 16, 2018, 02:16:36 pm
I agree, hence my saying I expect the WCML is more lucrative too. If you look at the top 10 cities in the UK by population (ignoring London), 4, including the top 3 are on the WCML, whilst one 2 are served by the ECML.

There are a lot of 'romantic' destinations on the ECML, and the route itself is more picturesque than the WCML, but there are a lot of empty bits, yet successive franchisees seem to assume exponential growth in passenger numbers!
Title: Re: East Coast to be Nationalised....Again?
Post by: daffy on May 16, 2018, 02:34:45 pm
We old folks in the 'empty bits' can't afford trains! Well, not full size ones anyway.  :D
Not to mention the paucity of rail lines - and lack of fast roads for that matter - east of the A1 and ECML. Travel in my location is slow paced and rather unlikely to be anything close to lucrative for any company.
Title: Re: East Coast to be Nationalised....Again?
Post by: themadhippy on May 16, 2018, 02:36:15 pm
so erm the road network cost the tax payer money and dosnt make a profit,so why should the railways or for that matter any form of public transport?
Title: Re: East Coast to be Nationalised....Again?
Post by: crepello on May 16, 2018, 02:54:11 pm
I know this is nothing to do with the subject of this thread, but just to clarify--the government gets VAT on road fuel, (plus duty) and vehicle sales as well as road tax, but passenger fares on road and rail are zero-rated for VAT.
Title: Re: East Coast to be Nationalised....Again?
Post by: njee20 on May 16, 2018, 03:09:16 pm
Don't say that too loud, they'll add VAT to rail fares, it already costs me £105 a week to get to work!
Title: Re: East Coast to be Nationalised....Again?
Post by: Zwilnik on May 16, 2018, 03:25:04 pm
so erm the road network cost the tax payer money and dosnt make a profit,so why should the railways or for that matter any form of public transport?

Actually, last time the ECML was 'temporarily' nationalised, didn't it make a profit?
Title: Re: East Coast to be Nationalised....Again?
Post by: Nick on May 16, 2018, 05:03:39 pm
East Coast does not attract the predicted traffic volumes time after time, which suggests to me that the someone somewhere does not understand the demographics.

This, many times this! It's the same failing each time. I'm not sure if the passenger volumes have been flat or are growing, just not at the predicted rate, but why have successive franchisees made the same error.
This is just bizarre isn't it? The contract only started in March 2015, so presumably would have been based on traffic numbers up to then. We're only in 2018 now, so those numbers are at most three or four years old.

Is the East Coast economy folding that fast? Or are these franchises run on such tight margins that errors in growth forecasts can wipe them out in a handful of years? It was an eight year contract for Pete's sake. You should plan to have to ride out a few overs and unders in eight years.
Title: Re: East Coast to be Nationalised....Again?
Post by: NeMo on May 16, 2018, 05:23:49 pm
Actually, last time the ECML was 'temporarily' nationalised, didn't it make a profit?

It was indeed very well run and successful.

It's never been clear to me why successive governments have been extremely hostile to the idea of a state-owned train operating company. Or more specifically, a British state-owned train operating company. They are absolutely fine with French, German and Dutch state-owned companies running trains in the UK.

Cheers, Neale
Title: Re: East Coast to be Nationalised....Again?
Post by: Papyrus on May 16, 2018, 05:54:29 pm
According to BBC News, they are going to rebrand it 'LNER'!!

At this rate, they'll be bringing back A4s, Scotsman, Tornado et al.  :D

Cheers,

Chris
Title: Re: East Coast to be Nationalised....Again?
Post by: Nick on May 16, 2018, 05:55:02 pm
The Guardian is reporting that the ECML will be rebranded as, wait for it... The London and North East Railway!

So we will now have a Great Western and an LNER. Anyone for the LMS?  :D

Ah, what goes around, comes around!
Title: Re: East Coast to be Nationalised....Again?
Post by: The Q on May 16, 2018, 06:56:28 pm
According to BBC News, they are going to rebrand it 'LNER'!!

At this rate, they'll be bringing back A4s, Scotsman, Tornado et al.  :D

Cheers,

Chris
The government have owned the LNER name since 1947, save more expense paying for a new one..
According to the BBC tv news the ecml goes from London to.... Glasgow, said twice !!!

The railways were screwed by the UK governments in WW1 and WW2 not paying for the costs of the wars to the railways. The political interference trying to recover the situation by forcing the big 4, meant the big four were forced to take in lines that never had a chance of making a profit.

Roads are paid for by general taxation ( including road/ fuel) taxes
Railways have to pay rates on their land.
Title: Re: East Coast to be Nationalised....Again?
Post by: njee20 on May 16, 2018, 07:25:31 pm
None of those franchises have folded though, just natural turnover. What have we had on the ECML: GNER, NXEC, East Coast, VTEC and now LNER. Where GNER, NXEC and VTEC have all failed and East Coast was operated by the government.

I must say I also donít get the reluctance to leave it under public control.
Title: Re: East Coast to be Nationalised....Again?
Post by: PLD on May 16, 2018, 07:28:32 pm
According to the BBC tv news the ecml goes from London to.... Glasgow, said twice !!!
It does indeed... 1 train about every 2-3 hours is extended from Edinburgh to Glasgow Central.  :confused2:
Title: Re: East Coast to be Nationalised....Again?
Post by: xm607 on May 16, 2018, 07:39:29 pm
91,s and DVT'S in blue and coaches in teak anyone?
Steve.
Title: Re: East Coast to be Nationalised....Again?
Post by: voltan on May 16, 2018, 08:06:48 pm
Actually, last time the ECML was 'temporarily' nationalised, didn't it make a profit?

Yes, but I'm guessing they didn't have to pay out to the treasury for the franchise before trying to make a profit. So the actual amount of money that came to the government might be less than the payments from the franchise holder.
Title: Re: East Coast to be Nationalised....Again?
Post by: captainelectra on May 16, 2018, 08:25:04 pm
Things have obviously been happening in the background...

http://www.lnerailway.co.uk/ (http://www.lnerailway.co.uk/)

At least they are sticking with red, so no need to mess about with the 91s and HSTs in their last years...
Title: Re: East Coast to be Nationalised....Again?
Post by: Mito on May 16, 2018, 09:49:00 pm
Having lived in Spain for the past 30 years I'm not up to date with rail happenings in Britain. But I have always thought that the franchising of the railway network was a considerable step backwards. I have yet to read or hear any good user comments about the system. Here the railways are still nationalised. I don't travel much but I can go from Valencia to Barcelona on and electric equivalent of a 125 for around 70Ä return, a 400km journey. Added to that the journey from my local station, a 50 minute journey is free. The trains are well patronized clean and on time. Whilst private companies need profits, they now seem to put those before clients.
Just an observation.
Title: Re: East Coast to be Nationalised....Again?
Post by: Bramshot on May 16, 2018, 09:52:23 pm
My daughter sometimes finds it cheaper to fly from London to Newcastle than to get the train. That includes the cost of travel to Heathrow from central London. Maybe this has something to do with the lack of profitability-ridiculous fares.
Title: Re: East Coast to be Nationalised....Again?
Post by: Hailstone on May 16, 2018, 10:30:23 pm
I recently travelled to Edinburgh with Mrs Hailstone to visit friends for a few days, Mrs Hailstone got us cheap tickets in advance for £38 return each! the route? EUSTON to EDINBURGH on a VIRGIN Pendolino!
it would seem to me that virgin were shooting themselves in the foot by trying to serve Edinburgh from 2 London termini
As for comfort, IMHO Pendolino seats are not fit for a six hour journey, I have to say MK1 seats were better.

regards,

Alex
Title: Re: East Coast to be Nationalised....Again?
Post by: woodbury22uk on May 16, 2018, 11:40:47 pm
I know this is nothing to do with the subject of this thread, but just to clarify--the government gets VAT on road fuel, (plus duty) and vehicle sales as well as road tax, but passenger fares on road and rail are zero-rated for VAT.

So all the costs of materials and services bought in by the train operating companies (including VAT) have to be factored into passenger fares and cannot otherwise be recovered from users. Government has only missed out on the final added value in the fare as all that VAT has been paid already.
Title: Re: East Coast to be Nationalised....Again?
Post by: njee20 on May 17, 2018, 09:20:45 am
I recently travelled to Edinburgh with Mrs Hailstone to visit friends for a few days, Mrs Hailstone got us cheap tickets in advance for £38 return each! the route? EUSTON to EDINBURGH on a VIRGIN Pendolino!
it would seem to me that virgin were shooting themselves in the foot by trying to serve Edinburgh from 2 London termini
As for comfort, IMHO Pendolino seats are not fit for a six hour journey, I have to say MK1 seats were better.

VTEC is 90% Stagecoach and 10% Virgin, VTWC is 51% Virgin and 49% Stagecoach, don't let the branding fool you. A minority of WCML trains go to Edinburgh anyway, the far more obvious route is on the East Coast.

It really does seem to be an overestimation of the passenger numbers. Again. Which is crazy.
Title: Re: East Coast to be Nationalised....Again?
Post by: twinklekev on May 18, 2018, 03:01:15 pm
I was listening to this on Radio 2 yesterday afternoon. According to some notable (arguably knowledgable) people, the only reason the franchise was let again in 2015 was ideology. Nothing else; the idea that private ownership was better than public ownership.

And here we are again, 3 years later back in public ownership. My only worry now is that Chris Grayling will appoint a bunch of numpties who no nothing about running a railway just to prove that private is better than public unlike last time when those who ran the ECML under public ownership actually knew what they were doing.

But that's my opinion. Go for it moderators.
Title: Re: East Coast to be Nationalised....Again?
Post by: Chris Morris on May 18, 2018, 04:14:49 pm
Just  to be clear, the ECML has been in public ownership (or nationalised and run by an arms length organisation if you prefer) for many years. The government merely rents out the right to companies to run trains along it. In the case of the ECML the winning train operating companies offered to pay the government more than was wise for the right to run their trains along our publicly owned track.

All of the track, land, signals and stations of our national network are already in national ownership. Its only the running of trains (including advertising selling tickets and leasing trains) that is carried out by private companies.
Title: Re: East Coast to be Nationalised....Again?
Post by: njee20 on May 18, 2018, 08:30:44 pm
I donít think anyone was really in doubt of that, thatís just really pedantic!