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Thursday 28 March 2013

Franchise Gravy Train Restarts – Possibly

Earlier this month, legal action was begun by four transport companies – Arriva, FirstGroup, National Express and Stagecoach – over the aborted bidding exercise for the Great Western rail franchise. These players sought to have their estimated £40 million bill refunded, given the Government pulled the exercise without apparent cause. But now the case is being dropped.

No change until 2016 at the earliest

This is despite all concerned believing there was a good case for reimbursement. So why should that be? Ah well. All four are also involved in existing rail franchises, and stand to gain considerably from the Government’s “Fresh start for franchising” announced earlier this week. Because franchising is not having a fresh, or any other kind of start, just yet. I will explain.

After the Department for Transport (DfT) collected the Team Shambles award for messing up their figures on the award of the InterCity West Coast (ICWC) franchise last year, Virgin Trains (VT) were given an extension to their tenure while the whole process was re-thought. Great Western was pulled as well, in an effective admission that the DfT was not fit for this particular purpose.

But several other franchises were approaching renewal date. What to do? Simples. Almost all of them are being extended, so that renewals form an orderly queue, starting next year. That means more and bigger paycheques for Existing Operators Personally Now. Arriva don’t get any longer on their Wales operation, but this is compensated by three and a half years extra on Cross Country.

National Express, despite having previously handed back the keys for East Coast, gets another year on Essex Thameside (aka c2c). Abellio gets more than two years on Greater Anglia. FirstGroup gets another year on Thameslink and almost three years more on Great Western. And Stagecoach gets two more years on South West Trains and two and a half years on East Midlands Trains.

It gets worse – or, for the operators, potentially more lucrative – when the revised franchising schedule is studied. Starting in 2016 – that this is after the next General Election is not a coincidence – three franchise renewals a year are scheduled for two years, then two for each of the two years after that. With Whitehall cutbacks, and last year’s shambles, the prospects for further extensions are looking good.

After all, the DfT has to keep tabs on the InterCity Express Programme new train fleet and all the stock movements as new trains are delivered and electrification proceeds. This is bad news for anyone hoping to enter the franchise market, but the makings of a very cosy stitch-up for the New Railway Establishment, with the added pretence that the private sector is somehow driving the process.

As Private Eye might have put it, trebles all round!


john b said...

True, although worth noting that "people hoping to enter the franchise market" and "people who exist" can be represented by the following Venn diagram: o o

Anonymous said...

Greater Anglia claims to be Abellio (Nederlandse Spoorwegen), not National Express.

ViceMarshal said...

Tut, tut. Greater Anglia is operated by Abellio, not National Express

Tim Fenton said...

Post amended to include Abellio!