Virgin Loses WCML franchaise

[dazzharvey]

Woke up this morning and heard this on the news :( Sad day for Virgin Trains

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

[Kali]

Sad day for anyone who uses the WCML too. I've used the GWML my entire life, well acquainted with Firstgroup's idea of rail operation. Their busses are better than Stagecoach down here, they just seem to think trains are large busses... and I don't for one minute believe they're gong to make the franchise payments for this, so *all* their operations are going to suffer.

Then again Virgin have had their own problems.

[Bananarama]

With rising costs and an unstable future in the world economy, I believe their decision to cut Virgin out of the scene will come back to haunt them in just a few years time.

[dazzharvey]

I'm wondering if it will go belly up in a couple of years like the National Express/GNER deal did.

[Kali]

I think that's everyone's thoughts - what does that mean for FGW/FTPE and Scotrail? I'm more concerned they're going to try and prop up WC with those to meet the ridiculous payments, fail, and then kill transport for half the country.

Not that I'd complain if DOR took over the GW franchise...

[Merlin75]

Could be the goverments way to try and restart BR on the sly. They have EC and if WC go's the same way then the goverment has two of the main lines. But knowing what First are like other companies within the group could end up paying for this.

[dazzharvey]

Bring back BR has a big following these days, they even had a small protest in the last couple of days with the fare prices going up by yet another ridiculous amount. Just remembered that was on the news last night :)

[Kali]

About time the National Audit office stuck their nose in rail franchising, the subsidy is absurd given how low operating profits are and how high the fares are. Someone's syphoning huge amounts out of here, and ... guess who owns the ROSCOs?

[dazzharvey]

I know Lloyds are a part of it and we own Lloyds :)

[thebigroyboyski]

I was reading about this today. First group gets the franchise after Virgin had to do all the hard work years ago.
The killer for First group is that they will be fined £200 odd million if they leave the franchise early. Someone must think investing billions is a good idea as Brandson didn't and he seems pretty clued up about making money.

[Kali]

Hand over £200m, the keys and walk away free, vs owing £4b ( Virgin reckoned £1.5b was a sensible figure to hand back for a year? ) and wrecking your other operations to try and cover it? hardly much of a choice there.

[dazzharvey]

If First group get into trouble while taking this risky strategy then if they lose and go under then is it the 1st step to re-nationlization of the rail network?

[BlueLight]

Correct me if I am wrong here, British Railroad are government subsidize, like Amtrak here in the States. Amtrak has been a money pit ever since it was created.

[Kali]

The premium is £5.5bn over the franchise lifetime, which is a little less than I wrote before(!) but still way more than anyone else was prepared to try. Dazz, EC is up for bidding soon so no more renationalised services after that for a while. I'm not sure the EU even allows it anymore. On the other hand at the rate we're going First and Stagecoach are going to run all the public transport in GB anyway... I suspect First are in with a chance of winning EC too. That would leave Arriva with Wales & XC and Chiltern at arms length, Abellio with East Anglia which is getting a large chunk torn off and stuck into Thameslink - and they're apparently already making a few noises about wanting out, and Govia with the Southern/SE ( integrating those too I think ) and London Midland. And TfL who I suspect might end up with Thameslink and if Boris has his way, maybe c2c when NX finally get thrown out of the rail industry. That would give First almost the entire north!

Passenger rail services are subsidised by the Govt in the UK, yes. In real terms it's now something like 5 times as much as just before privatisation, and as usual seems like a money-laundering operation; Govt gives National Rail some cash ( they are a not-for-profit company who own the infrastructure ), who give it to the train operating companies, who pay rental on the rolling stock - which is owned by banks mostly - so they can run a service which is decided by the government in fairly great detail.

[thebigroyboyski]

I really wish the passenger services would go back to the BR days. My local Ayrshire coast trains are good and pretty much always on time but the last couple of long trips I've made have been terrible. The last one made me give up on long distance rail travel all together. Sitting in Euston on the last pendilino to Glasgow of the day the service was cancelled because the power was down in the Rugby area. I had 15mins to get to Kings Cross in rush hour with luggage to get the last east coast service to Glasgow. I had to stand as far as York where this service was then cancelled because of more power problems. We were told an HST was following us and would take over the service. After an hour of it not appearing I gave up. There was already 2 full trains worth of people on the platform so I got a hotel for the night and made it home a day late.
I remember power problems when it was BR days too, much more fun, you would sit for half an hour, feel a shunt and then look out the window to see what loco had been hijacked to haul you clear
With all the private companies running everything they just blame each other for the problems.
Sorry for the slightly off topic rant