Next Southeastern rail franchise process hits trouble again
Plans to announce the next operator of the Southeastern franchise have hit problems. Apparently none of the bids are “compliant”.
Only three bidders are wanting to run the network, and all are possibly in trouble.
They are:
- GoVia. Current operators of Southeastern and behind the disastrous Thameslink program introduction.
- Stagecoach. They recently handed back the East Coast franchise after problems. Despite the Virgin branding, 90% of the company was owned by Stagecoach.
- Abellio. They are owned by Dutch national rail and operate Greater Anglia. Rumours abound they may walk away having made errors with their franchise bid. Pressure on them in the Netherlands to pull back has been high.
If we roll back a bit we see this is the latest in a long line of delays with the Southeastern franchise. The current franchise was awarded in 2006. It was a bit of a stinker in some ways. The Labour government ruled fares should rise by the RPI measure of inflation (which is always the highest) PLUS 3% on top each year. No plans to substantially upgrade Metro trains were present.
It was due to last six years with a two year possible extension, which the DfT awarded in March 2011 to March 2014.
This short term extension did not specify any real improvement in services or trains.
Unfortunately the DfT then cocked up the West Coast franchise from London to North West England and Scotland and were taken to court (this was before more recent problems on the East Coast line…) which put the next Southeastern franchise on hold. GoVia were then given another extension by the DfT in March 2014 until June 2018. Again, very little in the way of new or refurbished trains.
Nothing gets done
If you’re wondering why you are sitting in boiling trains every day that’s a fundamental reason. New trains or refurbishments only tend to happen when new franchises are awarded, and not with continual short term extensions due to DfT mistakes.
Southeastern do not own the trains. They’re leased, and the owners will not fund refurbishment without a clear future plan for stock in new franchises laid out by the DfT.
Anyway, you may have noticed June 2018 came and went. It was then extended to December 2018.
And then recently extended again to mid 2019.
And now even the announcement of the next franchise operator is delayed. The DfT have struggled to attract bids, and the franchise system is showing creaks nationwide. Still they refuse to permit transfer of Metro routes to TfL.
So what’s wrong now?
With so many recent franchises hitting serious problems the whole system is looking fragile. And because of that it’s believed bidders are reluctant to follow DfT specifications.
Specifications that already underestimated new homes in south east London and Kent by a huge amount. It could be bidders do not want to expand capacity to any great degree which will cause major issues given substantial home building plans by numerous parts of the network.
Ebbsfleet gets much attention but Bexley Council are planning 20,000+ homes alone in the north of the borough.
Lewisham borough are to shortly consult on a 53% increase in annual homes built from 1,385 to 2,117.
Bromley are looking at a big increase from 641 homes a year to 1,424.
It could also be that bidders are reluctant to pay higher fees through new stock via leasing companies or upgrade existing trains.
The new franchise is appearing at just the wrong time. And given it could well run over 10 years, any award that is lacking will have very long term repercussions.
The franchise system is not flexible. The DfT previously awarded “no growth” franchises to Northern and Arriva Trains Wales. Passenger numbers did grow, but franchise commitments and economics were based on no growth so little new stock or services appeared.
All of this raises further questions of the franchise system which appears on life support. Yet Grayling is nothing if not an ideologue and the thought of changing his stance seems impossible.
It doesn’t appear to matter to Teresa May that his record is angering voters in many seats. He could anger many more before the next election.
Imposing a disastrous 10 year (at least) franchise will be remembered by many commuters and passengers.
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Great piece. Just wondering, what’s the story about Abellio and “the pressure on them in the Netherlands to pull back”? Sounds interesting, would love to find out more about this, do you have a source?
Abellio’s civil engineering partner was Carillion and I would imagine that a lot of questions would be asked as to it’s ability to proceed with such a shake-up. That and the fact it would probably be a loss-making project in a country shortly to undergo Brexit may well be causing pressure to withdraw for a safer bet. Pure conjecture but I too would like to know what’s happening there.
“Abellio’s civil engineering partner was Carillion”? Excuse me; says who, when, where?
Please refer to the DfT’s announcement last June when four short-listed bidders were named (Trenitalia later withdrew, apparently to concentrate on their West Coast Partnership bid in a jv with First Rail Holdings Ltd, as well as their existing c2c franchise taken over from National Express).
That DfT announcement last summer mentions “South Eastern Holdings Ltd, a joint venture company that on franchise award will be wholly owned by Abellio Transport Group Ltd and East Japan Railway Company and Mitsui & Co Ltd”. No mention of Carillion there.
And I won’t make a fuss about the apostrophe abuse; not every word in the English language ending in ‘s’ needs one!
http://www.constructionnews.co.uk/companies/contractors/carillion/abellio-ends-5bn-wales-rail-bid-after-carillion-collapse/10028495.article
http://www.railtechnologymagazine.com/Rail-News/abellio-withdraws-from-wales-and-borders-after-carillion-collapse
There are also quite a few references to it in the Telegraph and other paywalled sites but these two are free to read. I’m more than happy to cut and paste parts of the relevant sections if you don’t have a subscription if you promise not to tell anyone
Ok, fair point, however this story is about South Eastern where, if they win the contract this November, Abellio will have the same joint venture partners as they already have in their relatively recently-acquired West Midlands Trains franchise operation.
The only answer is to literally stop paying our fares like a hostage situation until GoVia/DfT/Southeastern/whoever agree to do something. They can’t take us all to court. But it needs everyone on board, one person can’t make a difference.
Great article. As I previously wrote, the TfL wants, demands and to that extend will get the franchises and use the flagship Overground for its routs. The DfT is playing a losing game, because TfL has sized a lot of control of inner M25 already and are powerful. As I wrote on the other article: you can’t have the impressive multi billion Thameslink construction works, with all its modern nowadays technology, to state ‘it has failed’.
TfL has the long term vision to have all inner M25 at own control, for safety reasons and much more. See how areas of current Overground lines have uplifted many areas that were poorly looked after by because it’s not just an operating transport network. The whole regeneration not only including building houses but also needs to have a recognizable image – similar to red buses everywhere and where possible the famous London transport roundel. They want to do it well from scratch!
Yes, I am traveling a lot to Woolwich (Arsenal) myself, I love going to the area and enjoy the maritime kinda vibes. I have spotted the diversity with – thanks to your blog – new interesting facts [by locals]. The Crossrail will be impressive on the long run and of course the local council needs to do their job with green spaces and tackling issues. When the Crossrail gets extended to Ebbsfleet international (it will) it shall be even bigger, with all the new homes going to be build. This now which I wrote related to the rail network, I can’t speak about local issues
It’s not just local residents Grayling is angering, it’s MPs and councillors too, some of them from his own party.
But they aren’t doing anything of substance.
In a recent non-confidence vote in Parliament they sided with him.
“Plans to announce the next operator of the Southeastern franchise have hit problems and are delayed yet further. Apparently none of the bids are “compliant”. An announcement this month is now coming in November.”
This is a re-tread of another recent story, and both are over 8 months out of date. Ever since DfT published the Invitation to Tender, last November, it’s been known to everyone paying attention that the announcement on the new South Eastern franchise would be this November.
OK fair enough but recent issues affecting bidders such as East Coast being handed back and non-compliance of bids wasn’t known.
What actual evidence do you have for “non-compliance of bids”? How can you possibly know about the discussions between the DfT and the three short-listed bidders about their sealed bids?
What matters more than citing East Coast and alleged non-compliant bids is that the South Eastern operation is more dependent on central London employment and commuting than many others, and the recent declines in season ticket purchasing and the predictable revenue stream that provides may well call into question not the bids submitted in March but the DfT’s ITT specification, against which those bids were made, published last November.
I was made redundant last year by Southeastern after 20 years of excellent service. The main reason they gave was because of the fall in passenger numbers. They also went on to say that expected numbers to continue to fall. They also said that others TOC’s had similar issues So I find it strange that they are worried about not be able to accommodate passengers without paying for new expansion programmes etc.
Quote from my ‘Position at Risk’ Letter
we are not seeing the same rate of growth we enjoyed at the start of the Direct Award, in fact now a lot less people are travelling than we expected. What this means for us is that the revenue gap is not sustainable, and we’ve now got a significant
budget hole. It seems we are not atone, we know of other operators who are reporting similar scenarios.
And they’re now running lots of short-formed services due to ‘extra maintenance’. The savings in access charges is merely a coincidence.