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Author Topic: East Coast to be Nationalised....Again?  (Read 930 times)

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Offline Skyline2uk

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East Coast to be Nationalised....Again?
« 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 won’t 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

Offline Buzzard

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Re: East Coast to be Nationalised....Again?
« Reply #1 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.

Offline woodbury22uk

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Re: East Coast to be Nationalised....Again?
« Reply #2 on: May 16, 2018, 12:45:56 pm »
The government announced this several months ago about the same time as they extended Virgin’s 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 government’s economic forecasts have not been met, both affacting ridership.

The Commons Transport and Finance Commitees have both criticised the Department of Transport’s 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.
Mike

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Wondering how many pedants can dance of the head of a pin.


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Online njee20

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Re: East Coast to be Nationalised....Again?
« Reply #3 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.
« Last Edit: May 16, 2018, 01:13:46 pm by njee20 »

Offline Skyline2uk

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Re: East Coast to be Nationalised....Again?
« Reply #4 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 “flagship”, 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!?

That’s just me being over paranoid, aware that I have views that I don’t wish to betray even if it’s unintentional. I have no problem with the forum rules  :thumbsup:

Skyline2uk

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Re: East Coast to be Nationalised....Again?
« Reply #5 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!

Offline Skyline2uk

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Re: East Coast to be Nationalised....Again?
« Reply #6 on: May 16, 2018, 01:41:32 pm »
Lucrative is an interesting point isn’t 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 can’t change where it goes (easily anyway).

I suppose you can pitch the WCML against the ECML broadly by saying “which ones gets me to Scotland / London quickest / easiest / cheapest”, but that’s incredibly broad brush.

End of the day, it’s 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 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


Offline NeMo

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Re: East Coast to be Nationalised....Again?
« Reply #7 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

Offline Skyline2uk

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Re: East Coast to be Nationalised....Again?
« Reply #8 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 “Top Link” fast non-stop services between what large cities there are on the ECML?

Skyline2uk

Online njee20

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Re: East Coast to be Nationalised....Again?
« Reply #9 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!

Offline daffy

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Re: East Coast to be Nationalised....Again?
« Reply #10 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.
Mike

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Offline themadhippy

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Re: East Coast to be Nationalised....Again?
« Reply #11 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?

Offline crepello

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Re: East Coast to be Nationalised....Again?
« Reply #12 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.

Online njee20

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Re: East Coast to be Nationalised....Again?
« Reply #13 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!

Offline Zwilnik

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Re: East Coast to be Nationalised....Again?
« Reply #14 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?

 

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