A bluff that the train companies can only lose 4

March 8th, 2013 Christian Says

There is a big game of bluff going on. The fact that all four bidders in the collapsed Great Western franchise have filed a court case to try to reclaim the money lost in the bidding process does not mean they want to go to court. Quite the opposite. They are merely putting pressure on the  Department to cough up.

However, as often is the case with railway companies, they fail to understand the politics. Don’t these companies ever employ experienced Westminster advisers? The government’s case looks watertight. As the BBC’s transport correspondent Richard Westcott points out, bid specification says: ‘Each bidder shall be responsible for all costs, expenses and liabilities incurred by it in connection with the Great Western franchise letting process, whether or not its bid and/or associated negotiations are ultimately successful or the process is subsequently varied in any way or terminated.’ That’s pretty unequivocal.

So are the politics. A word to the companies. Let  me tell you guys, that train operators are not actually top of the hit parade of popularity. You would be mistaken to think  that because  satisfaction ratings are relatively high means that the public will support your action. This action will merely intensify the view that you are just a  money-grabbing short-term bunch of rapacious capitalists – or privateers to use Bob Crow’s favourite expression.

And so the Department will  hold firm knowing that there is no legal or political reason to give in, and because paying back the bid costs means that it will be open season on any future deals.

So why on earth are the train companies going there? Are they all so desperate to recoup a tawdry few million that they are risking their future relationship with teh Department? All that will happen is that  a lot of people including many influential ones will simply wonder whether this daft process of franchising out the whole railway is worth it and ask, yet again, ‘what is franchising for’ So guys, don’t go there. You portray yourselves as businesses ready to take a risk in order to make a profit,but in fact this action just shows that you want easy risk free money. Three out of four of the bids would have been wasted anyway – why on earth should the state reimburse all four!

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  • stimarco

    While you’re on the subject: what *is* franchising for? You keep asking the question, but after roughly 20 years, I’ve never heard anyone give a reasonable answer.

    Are we stuck with it solely because MPs hate admitting fault? Have we suffered a generation of error because our politicians aren’t big enough to say they’re sorry? To admit that, yes, they’re only human after all and they can, and do, make mistakes – just like the rest of us? Because we already know that. An endless parade of scandals and issues of Private Eye magazine have given us ample evidence of it.

    For the life of me, I cannot understand why we haven’t simply replaced the entire system wholesale with one based on the Italian, French or German models. John Major’s administration was fine with tearing out the entirety of British Rail. It was a mistake to replace it with the overcomplicated mess his team imposed, but at least he had the gonads to actually *do* it. Since then, we’ve had Blair, Brown and “Cameron-Clegg”, none of whom have done a damned thing to fix the underlying interface design issues.

  • Jerry Alderson

    This is one of the best written and most succinct comment pieces I have read in a long while. As a business consultant it is exactly the advice I would have given to my clients. The only point you did not make is that by all train groups acting together it looks like a cartel, and shows that the one thing that privatisation is supposed to bring – competition – does not really exist.

  • Stephen Lawrence

    “Three out of four of the bids would have been wasted anyway” – point well made! I still think they *are * spending too much money on these bids…..perhaps, like political campaigns, there should be a limit…?

  • montmorency

    What actually was wrong with British Rail (at least, what was wrong, that a bit more serious investment wouldn’t have put right)?

    And is the German system that much better? Germans tell me it was better under the old fully nationalised DB than under the present arrangements. And from my own limited observation when in Germany, it’s no longer possible to buy a walk-on walk-off ticket at a reasonable price, for non-trivial journeys; you have to book in advance and lose flexibility to travel at affordable prices (like here); trains are late more often; there are fewer people around to ask for help; dining cars have been withdrawn on some routes.

    To answer my own question: of course it’s still better than here – Germans being Germans would pull out their toenails sooner than put up with our system – it’s just not as good as it was.

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