The train operators seem to be sinking into the mire rapidly. Recent reports suggest that Arriva CrossCountry is suffering from a drop in passenger growth and now Stagecoach is clearly trying to get its punches in first in its negotiations with the Department for Transport over its South West franchise. In a belligerent statement issued today, the company confirms that its rail operations could go into the red and that it is in dispute with the Department over when precisely the cap and collar arrangements kick in. It also reveals that there is a further row over whether car park income should be included in the franchise receipts for the purpose of calculating revenue, with the company arguing that it should not.
Clearly the company is used to seeing the Department roll over in the face of such disputes but Lord Adonis, who angered South West Trains by refusing to allow it to close the number of ticket offices is wanted to, may well be made of sterner stuff. A word of warning to Brian Souter and co: threatening to call in m’learned friends and the like may play well in the short term in the city, but the last thing Stagecoach needs is a protracted dispute with the Department which may lead to ministers asking the Wolmar question: ‘What is franchising for?’
Rescue may be at hand in the unlikely form of a virus. If swine flu reaches Britain in epidemic proportions, all the train operators will find themselves in deep financial trouble but the Department would then be able to get itself out of its ‘no negotiation’ position because the force majeure provisions would come into play.
6 Responses
Blimey - that’s a worst case scenario Christian! I’m afraid teh DfT needs to hang some TOCs ‘out to dry’ - you’ve got to laugh - some of them are in revenue growth - just lower growth. Isn’t this a bit like calling int he lawyers if you back the wrong horse at the bookies?
If Arriva XC are getting lower passneger numbers can we put in a plea to stop the ghastly train refurbs that seem designed to make everyone suffer budegt airline style seating space just because at some times of day on some routes trains are not long enough? Great Western’s refurbed Inter City 125s are the worst example of this - absolutly terrible interiors.
Posted on April 29th, 2009 at 9:25 am
[...] a comment » The train companies are finally discovering what we all knew 15 years ago - privatising the damn things was a disaster. But they still have to squeeze money out of them to tide their shareholders over, so they’re [...]
Posted on April 29th, 2009 at 11:31 am
Not just terrible interiors - the seats are lousy as well. I did the 6 hour slog from King’s X to Perth on a refurbed Mark 3 set last weekend and those “ergonomically designed seats” (as GNER callled them) do your back in after just an hour and you end up fidgeting for the whole journey. I do mourn the loss of the original British Rail seats, fixtures and fittings from HST coaches no matter how dated they looked!
Posted on April 29th, 2009 at 2:28 pm
We tend to complain about National Rail Enquiries but I called the NHS Swine Flu helpline today and all I got was Crackling !!!!!
Posted on May 1st, 2009 at 1:45 am
It was interesting reading Stagecoach’s statement as reported in the Times the other day - they way it was worded it sounded as though they were crying home to mummy because they weren’t going to make any money and would shoulder a loss and they wanted the Gvt to provide ithis “profit” for them via subsidies and renegotiated terms.
Well sorry Mr Souter, you are a PRIVATE company after all, and the principle of privatisation is that companies take the rough with the smooth. No private enterprise is entitled to make a profit is it? Any more than no private individual is entitled to an income without working for it.
So if they want to be bailed out at the slightest hint of going into the red, then why doesn’t the Government just run the flaming service itself?? The Wolmar Question indeed.
Posted on May 1st, 2009 at 9:18 am
For god sake will this damned government wake up to these profit ripping companys!! Get this bloody industry re-nationlised instead of messing around with this money squeezing franchises.
Posted on May 2nd, 2009 at 5:39 am
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