First Group v Virgin Trains

[lanepe]

Virgin have lost the West Coast Mainline to the UK's biggest rail operator, First Group after the latter's bid promised significant higher payments (their bid was £5.5bn over the term) to the Government. The contract lasts until 2026!

http://www.bbc.co.uk/news/business-19264614

I see that First Group are promising an extra 12,000 seats per day (although some of that is achieved by stripping out the catering cars) across the routes, with 11 extra trains and new additional routes.

I see Beardie has said that the decision to award to First Group is "insane" and that they may well go bankrupt in view of the £390m (as opposed to Virgins offer of £160m) per year they will have to pay to the treasury.

I have to say that every time I have travelled with First Group it has been on an old dirty train with rubbish to zero catering. If I have to be stuck on a train travelling for business I’d much prefer to be with Virgin. I see that First Group got many more complaints last year for poor customer service although they do carry many more passengers than Virgin.

Who would you prefer to travel with?

[Adlerhorst]

I use Virgin a lot. Consistently good service.

Purely selfishly I am disappointed by this as I expect service standards to fall (as how do they get the extra money otherwise) although I understand the decision as we massively subsidise trains as it is so whatever the government can get back they should.

[BaldEagle96]

Question? What happens to Virgin's trains? Do they pass them over/sell them to First Group or are they stuck with them and have to sell them elsewhere?

[adrenalin john]

Should have been re-nationalised.

We have a disjointed rail system which is run in a ridiculously in-effecient fashion.

[BERT'S HEAD]

I also use Virgin trains regularly and am impressed with their service, compared to what was there before.

So there will be a direct service to Blackpool...small mercies

[jone-zee]

Originally Posted by BaldEagle96

Question? What happens to Virgin's trains? Do they pass them over/sell them to First Group or are they stuck with them and have to sell them elsewhere?

They pass over to Worst they just said on news. Shame really as I have used Virgin a lot in the past few years and found the trains clean and efficient with friendly staff. 1st Class was excellent and the grub especially breakfasts spot on.

Worst are still using 1980's stuff which are cramped and dirty (well on Great Western services from Paddington to Worcester).

[Adlerhorst]

Originally Posted by adrenalin john

Should have been re-nationalised.

We have a disjointed rail system which is run in a ridiculously in-effecient fashion.

Maybe, but the worst part of it, the most expensive and the most inefficient, is the one part that is not run for profit. Just a thought and all that.

[kolinkins]

Shame

Virgin trains not greatest value for money but were comfortable and given distances were mainly efficient.

Luckily I have not had to treck up and down the country on them for 6 months and long may that continue.

[lanepe]

I hope that the contract includes large penalties if First Group decide its unprofitable and they want to walk away as they have in the past.

http://www.guardian.co.uk/business/2...ine-firstgroup

Stephen Glaister, of the RAC Foundation, said: "The big test here is that this award is going to a company that can deliver on what it promised."

He said the biggest risk was that the forecast growth in traffic would not materialise and the company could end up walking away from the franchise. Previous big bids, including from National Express to run the east coast mainline, ended with the company being unable to see out the term of its contract.

FirstGroup declined to take up the last three years of its contract to run Great Western services, when it would have incurred around £800m in premium payments to the government.

[Il Padrino]

There is talk of a new one in our neck of the woods isnt there?

[Il Padrino]

21-12-2011
The Department for Transport (DfT) has announced the scope for the new Thameslink franchise from September 2013.

The expanded franchise will encompass First Capital Connect, Southeastern and Southern services as follows:

From 2013: all current First Capital Connect services will join the new franchise (therefore King's Lynn, Wimbledon Loop and Northern City Line services plus all other Thameslink and Great Northern route services will remain in the new franchise).
Between April and December 2014: joint FCC-Southeastern services will join the franchise. Some other Southeastern services may also be transferred to enable Thameslink Programme works to be completed.

Between July 2014 and July 2017: all Southern services will join the franchise.

How long will the new franchise be and what will it deliver?

The new franchise will operate for at least seven years, until 2020, with the potential for the Government to extend it for up to two further years. During this time it will deliver the remaining Thameslink Programme infrastructure works, the new generation trains, the new train control systems through central London and the future Thameslink timetable of 2018.

Which stations will be served by the future Thameslink timetable of 2018?

Although the new franchise from 2013 will include the services such as those that operate on the Wimbledon/Sutton loop, the Government has not yet specified which routes will be linked to the future Thameslink timetable that comes into force in 2018 and receive the new Thameslink trains. This will be determined following a period of consultation by the Department for Transport in 2012.

http://www.thameslinkprogramme.co.uk...items/view/129

[lanepe]

Originally Posted by Il Padrino

There is talk of a new one in our neck of the woods isnt there?

Virgin?

[Il Padrino]

Originally Posted by lanepe

Virgin?

train franchise

[mik59]

First have received several Train Operator of the Year awards (for different lines) but think that's an industry backslapping game, whereas a passenger survey published in January put their Capital Connect service 2nd worst (with National Express's eastern line being the worst). Virgin got 89% overall. The nearest First franchise was their Hull line at 88%. Great Western got 83%.

[GreatGonzo]

Originally Posted by adrenalin john

Should have been re-nationalised.

If it was re-nationalised woudl it be a better service? Nationalised industries have been notoriously inefficeint.

This bid says they will pay just over £1m per day to the government!

[Random*]

Been consistently impressed with Virgin service whilst regularly travelling up to Manchester in the past few months. Hope that this does not seriously affect the service after the December hand over.

I understand the need for the government to drive greater efficiency and returns, but with a brief look at the numbers I do wonder if anyone has checked whether First Group's plan is realistic/achievable.

[adrenalin john]

Originally Posted by GreatGonzo

If it was re-nationalised woudl it be a better service? Nationalised industries have been notoriously inefficeint.

This bid says they will pay just over £1m per day to the government!

Well you could do a comparative study with say France or Spain.

My view is that I am not hung up on the politics and am more about efficiency.

Where there can be true competition then in general I think it should be in the hands of the private sector. Thus for example I fully support the privatization of British Airways.


Where it is about monopoly supply and is of vital national/public interest then I find such services being in the hands of private enterprise an anethma. Thames Water being a prime example. They didn't build the system but have a monopoly supply on an essential service.

Re: The trains our service costs about 30% more than most nationalized railways to operate. There is no true competition and the disconnect between track and train results in chaos, waste and massive expense.

[mickiet09]

I was surprised to hear Virgin losing out, going by the woeful service that First Crapital Connect always dish up.

[Random*]

Originally Posted by GreatGonzo

This bid says they will pay just over £1m per day to the government!

Virgin paid £110m to the government last year and ended up with a profit of around £40m off revenue around £750m.

Which makes me wonder where First Group will find the extra £200m per year.

[kolinkins]

They'll probably run the trains without aircon on.