[Update] FirstGroup WCML franchise Award revoked

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

Virgin Rail has lost its bid to continue running the West Coast Mainline and will be replaced by the UK's largest rail operator, FirstGroup.

First West Coast says it will return £5.5bn at net present value to the government over the franchise term.
That is believed to have been much higher than the amount offered by Virgin Rail, which is 49%-owned by another transport company, Stagecoach.
In a statement, Stagecoach said the reason it had failed to secure the new franchise was because FirstGroup had contracted to pay "significantly higher premium payments" to the Department for Transport.

But there are concerns that First Group may have bid too much for the franchise.
"There have been many examples… where there have been very aggressive bids which the government has awarded and then quite soon afterwards, the people have handed back the keys and walked away from the contract without any real penalty," said Stephen Glaister, Professor of Transport and Infrastructure at Imperial College London.

Let's hope that FirstGroup can deliver.Rail transport certainly needs improvement.

Faster, more numerous, increased capacity and £1 billion more with tickets costing 15% less? All from First Group who are one of the more frequently complained about providers....

Not holding my breath.

[denphone]

Originally Posted by Maggy J

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







Let's hope that FirstGroup can deliver.Rail transport certainly needs improvement.

Don't expect that Maggy as we have the FirstGroup running the franchise down here and to put it mildly they are a load of rubbish.

Originally Posted by Damien

Faster, more numerous, increased capacity and £1 billion more with tickets costing 15% less? All from First Group who are one of the more frequently complained about providers....

Not holding my breath.

I was trying not to prejudge..but then I don't use the West Coast train line so I cannot say how bad or good it is with Virgin.

Originally Posted by Maggy J

I was trying not to prejudge..but then I don't use the West Coast train line so I cannot say how bad or good it is with Virgin.

It's alright. I've done it a two or three times from Euston to Manchester (and I think it's the same line to Birmingham which I have also used). As I was saying in the other thread it isn't too expensive if you book in advance. The trains are nice and were always on time albeit it's hard to judge it's dependability after three trips. They were one of the few operators to actually invest in better trains.

I don't buy that's it's possible to bid an extra £1 billion, cut fares by 15%, as well as increase the capacity and frequency of the trains. How inefficient were Virgin being if this is possible? You would think the Government looked the business plan and finances and concluded it was possible but this wouldn't be the first time a franchise operator failed to deliver on their promises.

Hopefully the £1 billion extra is being used for National Rail improvements.

[BenMcr]

Unfortunately I have feeling they'll do what Arriva did to the CrossCountry trains - ditch the shop for more seats and have a trolley. It's bad enough on the smaller trains the CrossCountry routes have - but some of the West Coast trains are now 11 cars long.

It'll be interesting to see whether they will get away with getting rid of the First Class kitchen too

[mertle]

branson called it insanity

http://www.guardian.co.uk/business/2...ainline-insane

from his blog

"We also did not want to risk letting everybody down with almost certain bankruptcy at some time during the franchise as happened to GNER and National Express who overbid on the east coast mainline. Sadly the government has chosen to take that risk with FirstGroup and we only hope they will continue to drive dramatic improvements on this line for years to come without letting everybody down."Insanity is doing the same thing over and over again and expecting different results. When will the Department for Transport learn?"

Would not be shocked to see another national coaches fiasco around corner. Seems the general concensus is they overstretched to get the franchise.

http://www.fool.co.uk/news/investing...oofolrf0010002

what I find strange why there shares bumped 20% over the month leading up to the bid anouncement when they sealed unknown. Sounds strange since bid anounced win there shares fallen 4% likely Probably at the costs bid maybe these ambitious growth forcasts.

FirstGroup's revenue assumptions do seem rather heroic, as they are expecting a 10.4% compound annual growth rate in revenue, compared to 8.5% projected by Virgin Trains. The franchise is already generating annual revenues of around £900m.
Some of the key improvements promised are 11 new six-car trains for the Birmingham to Scotland route, a reduced 15-minute journey time between Glasgow and London, new direct services from London to Blackpool, Telford, Shrewsbury and Bolton, plus a 15% reduction in Standard Anytime fares.

As for side note dont know how this thing works but what happens to virgin investment. Does first pay them back or they lose out financially now they lost franchise.

Another why are governemt contracts in other sectors not run the same way. Seems strange why we pay companies like ATosers, g4sawol when train companies have to bid for contracts pay government.

[MovedGoalPosts]

I'm an infrequent rail traveller, but have in the last few years experienced main line services run on the East Coast Line, West Coast Line, and most recently towards Cardiff. By far the best services were those by Virgin Trains.

Virgin Trains, with it's Pendolino stock is at the forefront of mainline services. Of course they have been able to take advantage of the upgrades and investment in the west coast line to introduce that stock. I'd also suspect that there were incentives in the franchise to develop the Pendolino trains.

It would seem unfair that Virgin Trains do a lot of the groundwork in uplifting services, only to loose out to another operator, who will no doubt inherit the modern stock and reap the rewards for potentially less development effort.

It should be noted that many of the new franchise services improvements to come, are also only possible because of already announced improvements to some of the rail infrastructure, such as electrification of the line to Blackpool from Preston.

[denphone]

Originally Posted by heero_yuy

That's what my mother reckoned when she travelled to and fro to Penzance from here in Worthing. She said the Virgin Trains were much cleaner and nicer than the First Western ones.

Paying more money to the government to secure the franchise robs it of investment.

Yes l can only go by my experiences as yes Virgin Trains when we had them down here were far superior in most aspects to anything First has ever done and in my humble opinion we will be the worse if we lose the Virgin group from our railways but that is likely to be the case it seems as they have no franchises left now.

[Arthurgray50@blu]

Sadly, l find this ending up in court as Sir Richard has already said that he will go to court over this decision.

What is the whole point of a company getting everything ready for the future and it gets taken over by a company that is well liked by the government.

What the point of changing something when its improving to go to a company that will rip it to pieces.

I can see a lot of trouble over this with strikes - yes this forum doesn't like the word strikes, but this has been brewing for a few weeks, when it was in the air.

[danielf]

Originally Posted by Rob

Virgin Trains, with it's Pendolino stock is at the forefront of mainline services. Of course they have been able to take advantage of the upgrades and investment in the west coast line to introduce that stock. I'd also suspect that there were incentives in the franchise to develop the Pendolino trains.

I spent 4 hours round trip on a Pendolino last week, and found the seats very uncomfortable. I had a window seat, and I just couldn't figure out where to keep my window-side arm. The seat itself was quite narrow (and I'm not a big lad), so wasn't comfortable with a arm by my side, but couldn't quite put it on the ledge either. I just spent 2 hours each way trying to get comfortable, but didn't quite manage.

[Pierre]

Originally Posted by Arthurgray50@blu

Sadly, l find this ending up in court as Sir Richard has already said that he will go to court over this decision.

I don't think he will. Even if he did the decision would not be overturned.

What is the whole point of a company getting everything ready for the future and it gets taken over by a company that is well liked by the government.

What the point of changing something when its improving to go to a company that will rip it to pieces.

I can see a lot of trouble over this with strikes - yes this forum doesn't like the word strikes, but this has been brewing for a few weeks, when it was in the air.

We as I, or you, have not seen the content of both bids any comment would be purely speculative.

[Stephen]

First Group are awful, they already run most of the UK Bus and train services and are expensive and don't deliever a good service at all.

I have use the glagow to London Virgin train service and even the 1st Class service and have never had any issues and will be gutted once they stop.

[mertle]

Bob Crow threatens first already.

http://www.bbc.co.uk/news/business-19265985

Actually see where he coming from.

I did not like the 2 clowns in studio I thought beeb was impartial but his valid concerns going by first track record was belittled. It was almost if they was spokesperson for first let first defend themselves not 2 beeb presenters.

Look way she nods in agreement when the bloke reads first plans is she shareholder first by any chance.

I dont know who the cow and the bloke was but surely he had valid concerns.

I know bob crow bit nutter but in this case he has valid reasons about future where the train service going in the area.

Nodding is encouraging them to continue, not agreeing - standard interview technique.

Nice attempted slur on her impartiality with the "shareholder" comment.