Potential implications for Class 701 5 year leasing arrangements

[Nogoohwell]

Does a five year lease suggest that the DfT think Labour will get kicked out at the next election and the tories will privatise the railway again?
Perhaps GBR should refrain from introducing a country wide livery for now.

 

[Goldfish62]

Does a five year lease suggest that the DfT think Labour will get kicked out at the next election and the tories will privatise the railway again?
Perhaps GBR should refrain from introducing a country wide livery for now.

GBR doesn't exist yet and in any case I should imagine the last thing on the minds of those involved in drawing up the legislation for GBR is a livery.

SWR will be leasing the 701s under the new 5-year lease. SWR is undoubtedly not expected to be around in 5 years time as the by-then established GBR will have taken on track and train and the individual TOCs will have disappeared.

 

[MotCO]

Does a five year lease suggest that the DfT think Labour will get kicked out at the next election and the tories will privatise the railway again?

The reverse would surely be true: Labour would want to leave as many bear-traps as possible, so would go for a 10 year lease.

 

[Meerkat]

So what’s DfT’s expectation for 5 years time?
Waterloo suburban services will have disappeared
Reeves has got interest rates so low that they can replace the trains at a far lower cost
701s still won’t have been introduced
Or is there some other reason they think they won’t need the 701s in five years time?

 

[Goldfish62]

So what’s DfT’s expectation for 5 years time?
Waterloo suburban services will have disappeared
Reeves has got interest rates so low that they can replace the trains at a far lower cost
701s still won’t have been introduced
Or is there some other reason they think they won’t need the 701s in five years time?

See post above

 

[Meerkat]

The end of SWR doesn’t make a lot of difference - everything just gets novated to GBR.

 

[Goldfish62]

The end of SWR doesn’t make a lot of difference - everything just gets novated to GBR.

Fair enough.

Let's wait to see some informed opinion from industry commentators as none of us on here have the foggiest idea about it.

 

[The_Train]

Does a five year lease suggest that the DfT think Labour will get kicked out at the next election and the tories will privatise the railway again?
Perhaps GBR should refrain from introducing a country wide livery for now.

Surely we cannot be in a situation where something as big as the railways being private or nationalised is changed every 5 years based on who wins the election. That would be utter insanity - although insanity is what politics is based on these days

 

[Snow1964]

See post above

Doesn't really explain it, because if an organisation is taken over, then normally commercial leases get novated. It's not like a private lease on your car where user can only take whatever conditions LeaseCo offer.

As others have said, unless expecting a different or cheaper fleet in 5 years time (in year 2030, which is about year after next general election is due) what advantage does 5 years have over say 8 years when annual price might have been lower.

 

[Goldfish62]

Surely we cannot be in a situation where something as big as the railways being private or nationalised is changed every 5 years based on who wins the election. That would be utter insanity - although insanity is what politics is based on these days

Not quite as insane as the suggestion that Labour has deliberately taken out a 5 year lease to make life easier for an incoming Tory / Reform government.

 

[Benjwri]

It could of course just be that little to no discount was offered for a longer lease by the ROSCO, or even they refused to offer one at all. They likely know that a leave signed now will not reflect the trains true value, and in 5 years they will likely be able to have a higher asking price …

 

[MotCO]

It could of course just be that little to no discount was offered for a longer lease by the ROSCO, or even they refused to offer one at all. They likely know that a leave signed now will not reflect the trains true value, and in 5 years they will likely be able to have a higher asking price …

Or maybe in 5 years' time the trains will be 25 years old and therefore of little value. (ok, slight exageration)

 

[43096]

It could of course just be that little to no discount was offered for a longer lease by the ROSCO, or even they refused to offer one at all. They likely know that a leave signed now will not reflect the trains true value, and in 5 years they will likely be able to have a higher asking price …

Unlikely. What the ROSCOs want - particularly for trains such as the 701s that are start of life - is to have them signed up on long-term leases. That is why longer leases are better value.

 

[3141]

Unless GBR is a very serious failure, I should expect the Conservatives to realise that proposing to re-privatise the railways in the 2029 election campaign would be a waste of time and possibly turn off potential supporters. There are likely to be several other issues that are much more important than that one.

 

[MotCO]

Unless GBR is a very serious failure, I should expect the Conservatives to realise that proposing to re-privatise the railways in the 2029 election campaign would be a waste of time and possibly turn off potential supporters. There are likely to be several other issues that are much more important than that one.

Deleted

 

[Benjwri]

Unlikely. What the ROSCOs want - particularly for trains such as the 701s that are start of life - is to have them signed up on long-term leases. That is why longer leases are better value.

For any normal train yes. But when it’s in the state it is and you’re negotiating at that point, the value is likely to go up once it’s fixed. We don’t know it was cheaper in this case.

 

[Peter Sarf]

For any normal train yes. But when it’s in the state it is and you’re negotiating at that point, the value is likely to go up once it’s fixed. We don’t know it was cheaper in this case.

And, unlike those doing the negotiating on both sides we hardly know what the perceived reality of the issues are that they are working with.

 

[Meerkat]

Unless GBR is a very serious failure, I should expect the Conservatives to realise that proposing to re-privatise the railways in the 2029 election campaign would be a waste of time and possibly turn off potential supporters. There are likely to be several other issues that are much more important than that one.

I would guess they would add more OA on the express routes, and maybe franchise out anything that could still be separated out quickly (C2C?)

For any normal train yes. But when it’s in the state it is and you’re negotiating at that point, the value is likely to go up once it’s fixed. We don’t know it was cheaper in this case.

If we don’t know it was cheaper where did the £50m a year more expensive come from?

 

[LNW-GW Joint]

Surely we cannot be in a situation where something as big as the railways being private or nationalised is changed every 5 years based on who wins the election. That would be utter insanity - although insanity is what politics is based on these days

Railways are not high on the current agenda for any party, given the need to rethink wider trade and defence policy thanks to Trump.
Just as Labour kept the structure set by the Tories in 1996, a putative future Tory government would surely keep the Labour GBR structure assuming it had been legislated for by then, and all the current DfT TOCs transferred to the DfTO fold.
In the future we are perhaps more likely to see a GBR plc, similar to the once-preferred privatisation option of BR before the break-up into TOCs/Railtrack.
GBR of course has to prove itself and demomstrate benefits to both customers and government.

The opposition parties currently have far more to worry about than the railways - the Tories are more worried about survival first, against the Reform surge.
Steel was the industry which bounced to and fro between public and private ownership in the post-war timeframe, to nobody's benefit.
The issues, as always, are subsidy and global competitiveness.

.

 

[Peter Wilde]

Unless GBR is a very serious failure, I should expect the Conservatives to realise that proposing to re-privatise the railways in the 2029 election campaign would be a waste of time and possibly turn off potential supporters. There are likely to be several other issues that are much more important than that one.

A rational mind would surely agree with that.

However this is politics. Tories will also be thinking “Do some of our big donors want to make money from re-privatisation? We won’t be re-elected this early, so should we now promise to re-privatise to keep them sweet?”. And “What rail policies are Reform likely to be arguing for, and how can we do something different to upstage them?” And “Who are we most likely to need to be in coalition with?".

All very unpredictable ...

 

[Meerkat]

A rational mind would surely agree with that.

However this is politics. Tories will also be thinking “Do some of our big donors want to make money from re-privatisation? We won’t be re-elected this early, so should we now promise to re-privatise to keep them sweet?”. And “What rail policies are Reform likely to be arguing for, and how can we do something different to upstage them?” And “Who are we most likely to need to be in coalition with?".

All very unpredictable ...

Ah yes..the usual allegation that privatisation is just about cronies making money! Rather than nationalisation being better only used in desperation, the dead hand of government rarely improving things.
The five year lease stuff is pure CS process over performance rather than political interference.

 

[Peter Sarf]

I think we have to be realistic.

Are the railways really that important in the grand scheme of things ?.
Even if you ignore world events (Trump and Covid) just within the UK most people will not be particularly bothered by a mode of transport they seldom use or feel affected by.

What will put the railways further up more and more peoples agenda will be the amount of state funding the railways absorb.

 

[Russel]

Given how slow the introduction has been, in 5 years, they may have only been in service 2-3 years!