When the railways were privatised in the 1990s (1994-97), there is a general consensus that this was a privatisation too far and/or a complete hash was made of the process.
The industry was privatised in three "slices", the rail infrastructure was privatised as one company (which, thanks to a range of problems is back in public ownership), the rolling stock would be owned by other companies (ROSCOs) and the rail services themselves would be run by Train Operating Companies (TOCs).
The TOCs would rent their rolling stock from the ROSCOs and "bandwidth" on the network. This would allow competition to develop on individual routes, improve the infrastructure and rolling stock and significantly lower costs for the government and provide better value for rail users. The reality has been quite different, companies have made generous profits, the government has ended up paying for most, if not all the improvements, a lack of track capacity has prevented competition on individual routes and the costs for the end users has spiraled out of control.
A key part of the privatisation was the sale of franchises to allow TOCs to operate services in and area. The idea was that a range of companies would bid for the franchise and the once which offered the best value (almost always the one that promised to pay the most back to the government over the period of the franchise) would get to run the service. One of the flaws of this was that the length of the franchise (10+ years depending on the route) means that by necessity the return for the government is based on forecast passenger numbers which have proved in many cases to be ridiculously optimistic.
Virgin Trains (owned by Sir Richard Branson) has had the franchise to operate the West Coast Mainline since 1997. Virgin have faced a number of challenges during this period, not least the hugely over-running engineering works to electrify the West Coast Mainline. In 2011-12 there was a competition for a second franchise and after a lengthy bidding process, FirstGroup (the muppets that run the service I use to get to London) won. Virgin complained about problems with the bidding process and as a result the process was scrapped and Virgin was allowed to continue to operate the line on a not for profit basis.
http://ift.tt/1lBx2mU
Virgin have just been awarded the franchise in a process which excluded competition altogether. While I'm not necessarily unhappy about the result (my experience of Virgin trains, though limited, has been universally positive), does this signify the end of the franchise bidding process or is it just a pragmatic solution to a specific problem ?
http://ift.tt/1lHjwbB
The industry was privatised in three "slices", the rail infrastructure was privatised as one company (which, thanks to a range of problems is back in public ownership), the rolling stock would be owned by other companies (ROSCOs) and the rail services themselves would be run by Train Operating Companies (TOCs).
The TOCs would rent their rolling stock from the ROSCOs and "bandwidth" on the network. This would allow competition to develop on individual routes, improve the infrastructure and rolling stock and significantly lower costs for the government and provide better value for rail users. The reality has been quite different, companies have made generous profits, the government has ended up paying for most, if not all the improvements, a lack of track capacity has prevented competition on individual routes and the costs for the end users has spiraled out of control.
A key part of the privatisation was the sale of franchises to allow TOCs to operate services in and area. The idea was that a range of companies would bid for the franchise and the once which offered the best value (almost always the one that promised to pay the most back to the government over the period of the franchise) would get to run the service. One of the flaws of this was that the length of the franchise (10+ years depending on the route) means that by necessity the return for the government is based on forecast passenger numbers which have proved in many cases to be ridiculously optimistic.
Virgin Trains (owned by Sir Richard Branson) has had the franchise to operate the West Coast Mainline since 1997. Virgin have faced a number of challenges during this period, not least the hugely over-running engineering works to electrify the West Coast Mainline. In 2011-12 there was a competition for a second franchise and after a lengthy bidding process, FirstGroup (the muppets that run the service I use to get to London) won. Virgin complained about problems with the bidding process and as a result the process was scrapped and Virgin was allowed to continue to operate the line on a not for profit basis.
http://ift.tt/1lBx2mU
Virgin have just been awarded the franchise in a process which excluded competition altogether. While I'm not necessarily unhappy about the result (my experience of Virgin trains, though limited, has been universally positive), does this signify the end of the franchise bidding process or is it just a pragmatic solution to a specific problem ?
http://ift.tt/1lHjwbB
via JREF Forum http://ift.tt/1oJpgcY
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