Avanti WC down the pan again

[tomoufc]

Just read the following article via the RMT Twitter feed - see link below.

https://novaramedia.com/2024/01/15/...-about-making-money-at-the-taxpayers-expense/

A little taster

Extraordinary. It’s rare to see such candour. Some of these people have been playing this game for years. One of the reasons why renationalising the TOCs is imperative, even if it doesn’t necessarily solve all the problems.

 

[james_the_xv]

1R17 overshot MKC this morning. Extra stop at WFJ to let passengers turn back.

 

[12LDA28C]

Extraordinary. It’s rare to see such candour. Some of these people have been playing this game for years. One of the reasons why renationalising the TOCs is imperative, even if it doesn’t necessarily solve all the problems.

And what would be the benefit of that? You'd still have the trains themselves owned by the ROSCOs and leased at huge cost so effectively a half-arsed renationaliation.

 

[Bletchleyite]

Hopefully, the semi fasts will get more used as people cotton on to them. I'm certainly fed up of defending 'short forms' or capacity reduction as some see it when most hours still have 8 cars, just split back to the higher frequency

Replied here: https://www.railforums.co.uk/threads/lnr-liverpool-service-4-vs-8-cars-and-730-introduction.261188/

And what would be the benefit of that? You'd still have the trains themselves owned by the ROSCOs and leased at huge cost so effectively a half-arsed renationaliation.

TBH I'd do it just to slap them for such breathtaking arrogance!

 

[12LDA28C]

TBH I'd do it just to slap them for such breathtaking arrogance!

Well, it's hard to disagree with that..

 

[sprunt]

You'd still have the trains themselves owned by the ROSCOs and leased at huge cost so effectively a half-arsed renationaliation.

You don't have to do that for ever though - new trains could be kept in the ownership of Great British Rail or whatever eventually emerges, and the middlemen eliminated over time.

 

[Bletchleyite]

You don't have to do that for ever though - new trains could be kept in the ownership of Great British Rail or whatever eventually emerges, and the middlemen eliminated over time.

It's already started, with Merseyrail's 777s not having been purchased via a ROSCO.

While leasing may well make sense anyway, the ROSCOs were more about ensuring a TOC couldn't take its ball home if it ceased to operate a given route, something that does happen in Germany to the great delight of a few companies that spot-hire old locomotives and rolling stock (imagine something a bit like West Coast Railway Company but without the charter operations).

 

[tomoufc]

And what would be the benefit of that? You'd still have the trains themselves owned by the ROSCOs and leased at huge cost so effectively a half-arsed renationaliation.

To prevent the leakage of cash from the system, and to have management in place more interested in running a good public service than finding ways to scam the public of tax money. And there's no good reason why trains can't be manufactured and owned by the state on a not-for-profit basis. Indeed, the impending demise of train factories may even provide an opportunity to do this without having to entirely start again.

 

[12LDA28C]

You don't have to do that for ever though - new trains could be kept in the ownership of Great British Rail or whatever eventually emerges, and the middlemen eliminated over time.

Which would be hugely expensive if the upfront cost of manufacture of new trains (plus maintenance contracts) has to be paid for by Government.

To prevent the leakage of cash from the system, and to have management in place more interested in running a good public service than finding ways to scam the public of tax money.

But it wouldn't be full nationalisation which is the point. And even if it were, we've seen what the Government attitude towards the Railway is in recent years. Do we really want a return to British Rail? That would probably mean even more cost-cutting and a managed decline of the railway system.

And there's no good reason why trains can't be manufactured and owned by the state on a not-for-profit basis. Indeed, the impending demise of train factories may even provide an opportunity to do this without having to entirely start again.

Apart from the huge cost you mean? You can't order a bog roll for the railway these days without the DfT signing it off. You think the Government will cough up tens of billions for new trains? Good luck with that.

 

[sprunt]

What is the effective interest rate of trains being leased from ROSCOs? Is leasing them from ROSCOs cheaper over the life of the train than borrowing the money over the same period?

 

[whoosh]

Just read the following article via the RMT Twitter feed - see link below.

https://novaramedia.com/2024/01/15/...-about-making-money-at-the-taxpayers-expense/

A little taster

I took it with a pinch of salt at first, after all, anybody can type anything on PowerPoint and take a photo of it. But Avanti actually admitted it was a real slide!
Staggering.

 

[12LDA28C]

It's already started, with Merseyrail's 777s not having been purchased via a ROSCO.

While leasing may well make sense anyway, the ROSCOs were more about ensuring a TOC couldn't take its ball home if it ceased to operate a given route, something that does happen in Germany to the great delight of a few companies that spot-hire old locomotives and rolling stock (imagine something a bit like West Coast Railway Company but without the charter operations).

Merseyrail however is not a TOC, in the traditional sense of the term.

The ROSCOs were more about giving TOCs the ability to procure new trains without having to stump up the huge cost which would not be recouped during the length of the franchise.

What is the effective interest rate of trains being leased from ROSCOs? Is leasing them from ROSCOs cheaper over the life of the train than borrowing the money over the same period?

But historically TOCs haven't been in existence over the whole life of the train, which may be 30-40 years or more.

 

[JamesT]

Merseyrail however is not a TOC, in the traditional sense of the term.

The ROSCOs were more about giving TOCs the ability to procure new trains without having to stump up the huge cost which would not be recouped during the length of the franchise.



But historically TOCs haven't been in existence over the whole life of the train, which may be 30-40 years or more.

Merseyrail still has operations run by a private company, who lease the rolling stock from the owner. It's just the owner in this case is Merseytravel rather than a traditional ROSCO. The 'franchise' was from 2003 for up to 25 years, so rolling stock lifetime being unaligned from the operator is still a thing for them.

 

[Peter Mugridge]

What is the effective interest rate of trains being leased from ROSCOs? Is leasing them from ROSCOs cheaper over the life of the train than borrowing the money over the same period?

I suspect not otherwise the business model for the ROSCOs would not stand up would it? They have to make a profit themselves.

The basic idea behind a ROSCO is that it avoids the TOC having to fund the purchase of the rolling stock up front. That it also means the rolling stock can be offered around whenever a lease is up for renewal is a secondary consideration - albeit one which gives the DfT a lot of scope to mess around with things.

 

[tomoufc]

Which would be hugely expensive if the upfront cost of manufacture of new trains (plus maintenance contracts) has to be paid for by Government.



But it wouldn't be full nationalisation which is the point. And even if it were, we've seen what the Government attitude towards the Railway is in recent years. Do we really want a return to British Rail? That would probably mean even more cost-cutting and a managed decline of the railway system.



Apart from the huge cost you mean? You can't order a bog roll for the railway these days without the DfT signing it off. You think the Government will cough up tens of billions for new trains? Good luck with that.

You're right that high upfront costs of investment would be required. Rail policy has to bite this bullet, or it'll be massively high day to day costs forever.

I suspect not otherwise the business model for the ROSCOs would not stand up would it? They have to make a profit themselves.

The basic idea behind a ROSCO is that it avoids the TOC having to fund the purchase of the rolling stock up front. That it also means the rolling stock can be offered around whenever a lease is up for renewal is a secondary consideration - albeit one which gives the DfT a lot of scope to mess around with things.

Why do they have to make a profit themselves?

What is the effective interest rate of trains being leased from ROSCOs? Is leasing them from ROSCOs cheaper over the life of the train than borrowing the money over the same period?

This is not published information, being hidden Freedom of Information requirements 'commercial confidentiality' clauses. The effective rate of interest for to TOCs for leasing rolling stock is very likely considerably higher than government borrowing costs - the obvious comparison for state owned provision.

 

[Nicholas Lewis]

Extraordinary. It’s rare to see such candour. Some of these people have been playing this game for years. One of the reasons why renationalising the TOCs is imperative, even if it doesn’t necessarily solve all the problems.

Its beyond extraordinary and shows how inept DafT are that they can get away with this. Mind you this was always inevitable with the the folly of collapsing the franchise system. Don't be deluded by OLR thats also a cash cow for the consultancies involved just they are smarter. Personally the only credible way forward now is to handover local services around cities to the mayors and refranchise intercity routes.

 

[tomoufc]

It’s beyond extraordinary and shows how inept DafT are that they can get away with this. Mind you this was always inevitable with the the folly of collapsing the franchise system. Don't be deluded by OLR thats also a cash cow for the consultancies involved just they are smarter. Personally the only credible way forward now is to handover local services around cities to the mayors and refranchise intercity routes.

OLR certainly is limited in this way, but it needn’t be

 

[AndrewE]

Its beyond extraordinary and shows how inept DafT are that they can get away with this. Mind you this was always inevitable with the the folly of collapsing the franchise system. Don't be deluded by OLR thats also a cash cow for the consultancies involved just they are smarter. Personally the only credible way forward now is to handover local services around cities to the mayors and refranchise intercity routes.

but I am rather afraid that they aren't sitting on much in the way of rail development expertise in-house, and would have to go with an open cheque-book to... those consultancies again!

One of the recurring themes in articles about local authority ineptitude is that they have been "hollowed out" to such an extent by decades of under-funding that they have barely enough people who know what to do to keep out of the courts, let alone do what the local people would like them to do!

 

[tomoufc]

but I am rather afraid that they aren't sitting on much in the way of rail developmengt expertise in-house, and would have to go with an open cheque-book to... those consultancies again!

One of the recurring themes in articles about local authority ineptitude is that they have been "hollowed out" to such an extent by decades of under-funding that they have barely enough people who know what to do to keep out of the courts, let alone do what the local people would like them to do!

Correct. Unfortunately undoing this omnicrisis would take a long time.

 

[Nicholas Lewis]

but I am rather afraid that they aren't sitting on much in the way of rail development expertise in-house, and would have to go with an open cheque-book to... those consultancies again!

One of the recurring themes in articles about local authority ineptitude is that they have been "hollowed out" to such an extent by decades of under-funding that they have barely enough people who know what to do to keep out of the courts, let alone do what the local people would like them to do!

Several of them now run Tram systems and one a metro so whilst i don't disagree all im suggesting is the train service not the infrastructure.

 

[HSTEd]

TBH I'd do it just to slap them for such breathtaking arrogance!

The railway industry really is its own worst enemy sometimes.

 

[Clarence Yard]

For me, it’s beyond stupid to state this in writing in a company document. We know (and have discussed this in other threads) that the fee system associated with the NRC’s is virtually free money but, Owning Groups/TOCs, if you want the money to continue flowing to your shareholders, don’t say it is “free”!

 

[12LDA28C]

but I am rather afraid that they aren't sitting on much in the way of rail development expertise in-house, and would have to go with an open cheque-book to... those consultancies again!

Much as how the civil servants at the DfT haven't got a clue how to run a railway or the faintest idea how the industry actually works?

 

[Bletchleyite]

For me, it’s beyond stupid to state this in writing in a company document. We know (and have discussed this in other threads) that the fee system associated with the NRC’s is virtually free money but, Owning Groups/TOCs, if you want the money to continue flowing to your shareholders, don’t say it is “free”!

It was an internal presentation, but I don't think there's any way someone wouldn't have leaked something like that. He could have just said it verbally, if it was quick it'd have been too late to record it.

Crikey, a senior member of LNER staff has leaked an internal slide (you can tell by how scruffy it is) himself! (It doesn't contain anything we don't know, but it's still not "jazzed up" for public consumption).

 

[Adrian1980uk]

Probably not the best thing to put in a PowerPoint but it's also probably the truth that it is free money like if you get a pay out for running trains on time, reality is that you're being paid to do that anyway and if you achieve it then it's free money

 

[185]

Seeing the Avanti Powerpoint news story / whoopsy / fubar being run all over the shop now, Guardian, BBC, Mail, Times, all Reach etc. Ohhh dear

 

[PG]

Seeing the Avanti Powerpoint news story / whoopsy / fubar being run all over the shop now, Guardian, BBC, Mail, Times, all Reach etc. Ohhh dear

Pretty much a textbook case of "shoot yourself in the foot"

 

[tomoufc]

Probably not the best thing to put in a PowerPoint but it's also probably the truth that it is free money like if you get a pay out for running trains on time, reality is that you're being paid to do that anyway and if you achieve it then it's free money

No I think the point they were making is that they get paid regardless of whether they are fulfilling the contract, and get a bonus on top of that when they do happen to fulfil it. I wonder how much of that the rail workers who actually do the work of providing the service see when such instances occur.

 

[PG]

I wonder how much the rail workers who actually do the work of providing the service see when such instances occur.

Not sure if that's a rhetorical question? I imagine that those at the sharp end see precisely 0% of the bonus!

 

[tomoufc]

Not sure if that's a rhetorical question? I imagine that those at the sharp end see precisely 0% of the bonus!

It was