Scotland effectively went down the route of long term leases as TfL have done for LO. In both TfL and TS cases the the main party (bank) in the leasing company is SMBCThey won't disappear unless the government decides to buy them out, which will effectively mean striking a deal to put a price on all the rolling stock they own. I can't see the government spending money on that right now, despite DfT's past objections to ROSCOs. When the Competition Commission looked into that they found most of the problems were due to the franchising system, so maybe will disappear with that being abolished.
The government could decided to buy rolling stock itself rather than leasing, as Scotland has sort of done, so that the ROSCOs' roles gradually diminished as older fleets were withdrawn. But they'd still be with us for several decades.
It would cost billions to transfer fleet ownership to the goverment, and for what reason ?
I strongly suggest Roscos will remain as is, but their customers will change
In the last decade the only government involvement in purchase (rather than via a TOC) for innovation reasons (IET - but now ROSCOs are doing follow on orders of family products 802 / 805 / 807 / 810 etc) or big orders that were thought to be too big for ROSCOs (Thameslink, Crossrail and IET) - all are effectively leased. There won't be anything similar again till HS2 and there is a good chance they will manage to set something up there leasing wise nearer the time (sale and lease back after having actually go the delivery of the first train to de-risk things).Agreed that we won't see the current fleets transferred to governments, but I fully expect that they'll continue to exist for new fleets as well. I think the optics of spending £hundreds of millions of government money (even if, as discussed in a previous thread on this topic, it's cheaper in the long run because of the better borrowing rates) on a new train fleet isn't something a government would want. "£1 billion for new trains for london commuters? You should have spent that money on are NHS!1!"
How exactly did that work with Pacer units being kept in service for so long?Secondly the ROSCO has an incentive to maintain the value of its investment for future resale, so it has to keep investing in it.
How exactly did that work with Pacer units being kept in service for so long?
Not sure if a "sweet spot" exists between unfettered competition on the one hand, and the risks of a public-private partnership on the other.I am sure the ROSCOs will stay but hopefully now they can work together with the government for a long term traction plan which includes sensible replacement plans, cost effective improvements, reduced micro fleets and good value for UK plc as well as sensible returns for the ROSCOs
Or is common sense and logic too much to ask?
EDIT: Would be nice to have a central strategy for renewal but that then takes it back to government control and that clearly did not work too well under BR.
Not sure if a "sweet spot" exists between unfettered competition on the one hand, and the risks of a public-private partnership on the other.
One man’s coherent cascade plane is another man getting unsuitable cast offs dumped on them.
Would travellers (not enthusiasts!) in East Anglia have rather foregone their shiny new trains and got ECML’s unreliable rejects again?
Wondered how long it would be before the usual stereotype was trotted out....Certainly an exception as they knew there was no possibility of future resale. The incentive they did have was initially receiving them for pennies and rinsing TOC's for millions every year for as long as they possibly could.
I wonder how much the Pacer fleet alone generated in revenue for the ROSCO's since they received them. Surely it's potentially in the billions?
Wondered how long it would be before the usual stereotype was trotted out....
I was reading recently, I think it was Roger Ford, about the recent entrants to the leasing market and their preference for "sticky" leases where the train is effectively bespoke so would be difficult to replace at the end of a franchise term. This presumably also means that the train design can't easily be used other than on its intended route.
Yet the latter part is a perfectly valid question. Have you got an answer or not?
£65k per unit per year for the Class 142 fleet (2006 values, at the time of the Competition Commission enquiry).
£65k per unit per year for the Class 142 fleet (2006 values, at the time of the Competition Commission enquiry).
Wet or dry lease?
Bit rich asking that, really, seeing as I’m not the one making numbers up.Yet the latter part is a perfectly valid question. Have you got an answer or not?
well that would be normal - you depreciate the asset and replace it when it’s knackered.So what's your solution? New trains all round every time something is withdrawn?
In a normal market the ROSCO wouldn’t have made huge profits on the Pacers as they would have paid an appropriate amount for them as part of what they paid the government at privatisation. If they did make an inordinate profit that would be due to the DfT allowing them to be used much longer than predicted and the Labour Party‘s unfulfilled promises of nationalisation reducing privatisation bidding prices.Yet the latter part is a perfectly valid question. Have you got an answer or not?
You are confusing two different things: the book value of the individual asset and the price paid for the entire business (the ROSCO). Ultimately the business is only worth what someone is willing to pay for it, that can be less than, more than or the same as the book value of the assets and liabilities of the company.In a normal market the ROSCO wouldn’t have made huge profits on the Pacers as they would have paid an appropriate amount for them as part of what they paid the government at privatisation. If they did make an inordinate profit that would be due to the DfT allowing them to be used much longer than predicted and the Labour Party‘s unfulfilled promises of nationalisation reducing privatisation bidding prices.
Presumably only the first ROSCO owners made the huge profits out of the Pacers as the later (multiple) sales of the businesses would have paid a much higher price for the right to lease them out.
Doesn’t the book value of the asset reflect the price paid for it as part of the business?You are confusing two different things: the book value of the individual asset and the price paid for the entire business (the ROSCO). Ultimately the business is only worth what someone is willing to pay for it, that can be less than, more than or the same as the book value of the assets and liabilities of the company.