| Non-motoring > West Coast Rail bids | Miscellaneous |
| Thread Author: Lygonos | Replies: 71 |
|
New Wed 3 Oct 12 01:11
West Coast Rail bids - Lygonos
|
|
www.bbc.co.uk/news/business-19809717 Presumably legal bods have advised the Ministry they will be beaten in court, hence the about-face? |
|
New Wed 3 Oct 12 02:18
West Coast Rail bids - devonite
|
| You could almost think that someones "back-hander" has been thwarted! |
|
New Wed 3 Oct 12 05:57
West Coast Rail bids - Harleyman
|
|
The downside being that we'll have to suffer Branson's self-righteous posturing. I concede that he's a good businessman, and allegedly runs a good railway, but for some reason he grates on me. However; as one who maintains an interest in railways I would say that I've considered the current franchise system deeply flawed for many years. It's long due an overhaul; no doubt Labour will be pointing the finger but since they did very little to change anything during their 13 years at the helm it would, like most things they do, be extremely hypocritical. Last edited by: Harleyman on Wed 3 Oct 12 at 06:00
|
|
New Wed 3 Oct 12 07:00
West Coast Rail bids - madf
|
|
Anyone who did a Discounted Cash Flow on the bids would have ruled out the winning bid first stop. And Virgin would have won hands down. Takes all of 10 minutes to do.. I can only assume the Department of Transport is full of financial illiterates. I therefore assume this is a coverup as the Department would have lost heavily in Court and would have had tonnes of egg over their faces. The Permanent Secretary should be fired for gross negligence. Last edited by: madf on Wed 3 Oct 12 at 07:00
|
|
New Wed 3 Oct 12 07:11
West Coast Rail bids - Harleyman
|
|
>> I can only assume the Department of Transport is full of financial illiterates. >> >> I therefore assume this is a coverup as the Department would have lost heavily in >> Court and would have had tonnes of egg over their faces. >> >> The Permanent Secretary should be fired for gross negligence. >> I agree. Inevitably, though, it will be an unfortunate Minister who falls on his or her sword, whilst the civil servants trot off to the dining room for another cup of tea before organisingthe next fiasco. |
|
New Wed 3 Oct 12 08:04
West Coast Rail bids - NortonES2
|
| We have heard that it is the fault of the civil servants involved, and it may be. I'm sure some would like to think that CS are unable to calculate, but I doubt it was an arithmetical error. The CS have access to actuaries for the mechanics of calculation. Extremely unlikely. More likely a meddling from a higher level affecting the process, aka policy. I suspect the High Court review would have revealed more than the department wanted, so they threw in the towel and prepared a few sacrificials. |
|
New Wed 3 Oct 12 08:55
West Coast Rail bids - Harleyman
|
|
>> We have heard that it is the fault of the civil servants involved, and it >> may be. I'm sure some would like to think that CS are unable to calculate, >> but I doubt it was an arithmetical error. The CS have access to actuaries for >> the mechanics of calculation. Extremely unlikely. Which presumably is how they keep their backsides fireproof; but given that the said CS's would, I presume, be responsible vetting the details of all the bids and presenting them to their political frontmen, surely they must take part of the blame? |
|
New Wed 3 Oct 12 09:13
West Coast Rail bids - Lygonos
|
|
>>Which presumably is how they keep their backsides fireproof; but given that the said CS's would, I presume, be responsible vetting the details of all the bids and presenting them to their political frontmen, surely they must take part of the blame? Very likely but the ultimate decision is made by the Minister - who's to say they didn't just go "That's the biggest pile of cash for the treasury - give it to them". It took minutes before independent economists were raising eyebrows at the decision making process - I doubt such a potential cok-up will be entirely in the process. No doubt someone else's position will be made untenable, and it will all be forgotten about shrouded in an industiral tribunal or two. |
|
New Wed 3 Oct 12 09:23
West Coast Rail bids - Harleyman
|
|
>> Very likely but the ultimate decision is made by the Minister - who's to say >> they didn't just go "That's the biggest pile of cash for the treasury - give >> it to them". >> Whilst I certainly don't subscribe to the popular view that all CS's are by definition "Sir Humphreys" who manipulate their elected puppets at will, they would not either be daft enough to submit to such political naivety. Had this indeed been the case I'm willing to bet that the media would have been well leaked to in advance. |
|
New Wed 3 Oct 12 09:24
West Coast Rail bids - NortonES2
|
| As I said initially, it might be incompetence. It might be that the CS omitted to test the assumptions behind the bids. Was it cost-cutting or direction from above not to critically examine the bidding process? More likely that there was a direction from above to achieve an outcome by a due date, and not get involved in the detail. Until the imminence of public examination the DfT maintained that the process was robust, and FG (who made the calculations of revenue , capital needs and growth!) argued they had followed the DfT rules. As for fireproofing: do private companies employ accountants to keep the IR away? Not just that: they also need their expertise. |
|
New Wed 3 Oct 12 08:36
West Coast Rail bids - madf
|
|
>> >> >> I agree. Inevitably, though, it will be an unfortunate Minister who falls on his or >> her sword, whilst the civil servants trot off to the dining room for another cup >> of tea before organisingthe next fiasco. >> Choice of: T he Lord Adonis 5 June 2009 11 May 2010 Labour Philip Hammond 12 May 2010[1] 14 October 2011 Conservative Justine Greening 14 October 2011 4 September 2012 Conservative Patrick McLoughlin 4 September 2012 Incumbent Conservative A new Minister every year! |
|
New Wed 3 Oct 12 09:30
West Coast Rail bids - Zero
|
|
Several points here. Firstly, the franchise system is fundamentally quite good. The principle of profit oriented train operating companies (ToC) operating over a nationally owned and controlled infrastructure (Network Rail) is near ideal. The franchise areas are about right, but the franchise term is too short to provide a good return on investment (should be 12 years - with removal for poor compliance / performance with franchise terms) It all falls apart when the bid is made on "who wil pay the most for it" Complete disaster, the huge cost of buying the franchise cripples (and has crippled many) the ToC, and pushes the cost onto the fares. Its quite simple really. The costs of Network Rail should be worked out by a "cost per passenger mile" (on a national basis - that provides a leveller (subsidy if you like) with high use lines subsidising low use lines). This cost would include actual costs, plus future improvement / expansion, paid annually by ToC in advance. Each Franchise now has an annual base cost per passenger mile, and the ToC can bid on passenger prices / service quality / routes offered. The more fare paying passengers the ToC gets on top of those its paid for is a bonus in addition to the profit its made on its bid passenger miles. If it looses real passengers its now in the mire because its below the contracted price, and they fall by the wayside, the franchise taken on by another, Now back to the case in point. Branson is a spoilt whining child, the way Virigin Airlines (a tiny operator) whines about BA (and only BA) is pathetic. He came out with a load of tantrums about the West Coast franchise because he is making a packet out of it, and they assumed the new bid was in the bag as incumbent. The first group is not some fly by night outfit who dont know what they are doing, they already run a large franchise well. I am glad he got a shock, wish it was my boot that kicked him up the ass. |
|
New Wed 3 Oct 12 09:48
West Coast Rail bids - madf
|
|
Watched Transport Minister Patrick McLoughlin on Sky this am. Several franchise bids underway : it was discovered that the information given to different bidders for the same contract differed! In the complex calculations of inflation and passenger numbers and economic growth used to review the West Coast Mainline bids, there were a number of "major errors". A number of civil servants have been suspended today. This strikes me as either gross managerial incompetence or a deliberate attempt to scupper some bids... |
|
New Wed 3 Oct 12 14:36
West Coast Rail bids - Roger.
|
|
>> This strikes me as either gross managerial incompetence or a deliberate attempt to scupper some >> bids... Sealed brown envelopes, anyone? |
|
New Wed 3 Oct 12 09:51
West Coast Rail bids - madf
|
|
Now back to the case in point. Branson is a spoilt whining child, the way Virigin Airlines (a tiny operator) whines about BA (and only BA) is pathetic. He came out with a load of tantrums about the West Coast franchise because he is making a packet out of it, and they assumed the new bid was in the bag as incumbent. The first group is not some fly by night outfit who dont know what they are doing, they already run a large franchise well. As usual, a load of biased and baseless comments.. "British Airways has ended one of the most bitter and protracted libel actions in aviation history in a humiliating climb-down. At the High Court Christopher Clarke QC, counsel for BA, apologised "unreservedly" for an alleged "dirty tricks" campaign against Virgin Atlantic. BA also agreed to pay damages of £500,000 to Virgin boss Richard Branson and £110,000 to his airline, as well as incurring legal costs of up to £3m." tinyurl.com/2r4yg6 Still don't let facts stop you.. they have never before :-) |
|
New Wed 3 Oct 12 10:05
West Coast Rail bids - Zero
|
|
So painting slogans on your planes insulting other operators consolidation plans is not childish and spolit? And before you get carried away about how wonderful Virgin Airlines were lets not mention the fines they carried (and those they got away with by grassing up other airlines when they knew they would be caught) for operating an illegal cartel? Get YOUR facts right MADF. Last edited by: Zero on Wed 3 Oct 12 at 10:06
|
|
New Wed 3 Oct 12 10:15
West Coast Rail bids - NortonES2
|
|
.******* In Great Britain, passenger train services are operated by a number of companies, referred to as Train Operating Companies or TOCs, normally on the basis of regional franchises awarded by the Department for Transport Rail Group. Until 2005 this role was performed by the Strategic Rail Authority. The infrastructure of the railways in England, Scotland, and Wales – including tracks, signalling, and stations – is owned and operated not by the train companies but by Network Rail, which took over responsibility from Railtrack in 2002. Most passenger trains are owned by a small number of Rolling Stock Companies (ROSCOs) and are leased to the individual TOCs. However, a handful of TOCs own and maintain some of their own rolling stock. All passenger TOCs in Great Britain are privately owned. The majority of these hold franchises to operate rail services on specific parts of the railway and come under the auspices of the National Rail brand. In addition, companies are able to bid for "paths" (specific parts of the overall National Rail timetable) to operate their own services, which the franchises do not operate – these operators are classed as open-access operators and are not franchise holders. Currently in Great Britain, there are two open-access operators: Hull Trains, which runs services between London and Hull, and Grand Central, which operates between London and Sunderland and between London and Bradford. A third, Wrexham & Shropshire, with services between London and Wrexham, no longer exists. In addition, there are operators that fall outside the purview of National Rail, which operate specific services which are recent additions to Britain's railways. The main examples are Eurostar, which operates to the continent via the Channel Tunnel, and Heathrow Express, which runs fast services from London to Heathrow Airport. A number of metropolitan railways on the network are operated by the local franchise holder in conjunction with the passenger transport executive or other civic body responsible for administering public transport. One of these bodies, the Merseyside Passenger Transport Executive, is responsible for one of three National Rail franchises not awarded by central government, namely the Merseyrail franchise, while certain National Rail services in North London came under the control of Transport for London in November 2007 as London Overground. Two other franchises, the Scottish domestic franchise, currently operated by First ScotRail, and the Welsh domestic franchise, operated by Arriva Trains Wales, are awarded by the devolved executives of the two constituent nations. And this stew of interfaces has to be managed. Or more accurately, given first aid to let it limp along. |
|
New Wed 3 Oct 12 10:18
West Coast Rail bids - Zero
|
|
I'd like to know what got censored there. Fundamentally you just described the system the same way I did.
Last edited by: Zero on Wed 3 Oct 12 at 10:20
|
|
New Wed 3 Oct 12 10:22
West Coast Rail bids - NortonES2
|
|
I put in a rude word aka as micturating to describe my view of the arrangements:) And my attempt to ascribe the factual stuff to Wiki got scrapped when I tried to edit.
Last edited by: NIL on Wed 3 Oct 12 at 10:23
|
|
New Wed 3 Oct 12 10:25
West Coast Rail bids - Zero
|
|
>> I put in a rude word aka as micturating to describe my view of the >> arrangements:) And my attempt to ascribe the factual stuff to Wiki got scrapped when I >> tried to edit. So if you would be so kind to describe a way to promote a non nationalised railway system? Not like the one we got rid of please, we couldn't afford it cost or its crap service. |
|
New Wed 3 Oct 12 10:35
West Coast Rail bids - NortonES2
|
| A state owned private company for the backbone of the system. Regional TO services open to tender including the state company. Aim being to have a simplified operating network with a vertically integrated lead function. |
|
New Wed 3 Oct 12 10:25
West Coast Rail bids - Harleyman
|
|
>> And this stew of interfaces has to be managed. Or more accurately, given first aid >> to let it limp along. >> Good point. It's no wonder that the ticketing system's in an even bigger mess, which TOC's cannot help but exploit. |
|
New Wed 3 Oct 12 11:44
West Coast Rail bids - Bigtee
|
| Bring back BR. |
|
New Wed 3 Oct 12 11:51
West Coast Rail bids - Dutchie
|
| That will never happen Bigtee.How many different franchises are there in the UK.And.. different railfare structures.? |
|
New Wed 3 Oct 12 13:46
West Coast Rail bids - movilogo
|
|
I can't afford riding trains in UK. The franchise system is flawed. They were awarded few years and TOCs try to maximize their profit by charging as much as possible. Net result, sky high rail fare. |
|
New Wed 3 Oct 12 14:28
West Coast Rail bids - madf
|
|
You are all missing the point. Most TOCs pay the Government to run railways. The UK Government has scaled down the Armed Forces, sold off most of its (badly run) assets to avoid investment costs and is busy cutting all costs. Meanwhile the Country's Benefits Bill keeps rising year after year. It's clear to anyone who looks at teh trends it is impossible to continue as we are . The rapid ageing of the population will exacerbate the crisis. We really need to make the NHS an insurance based system - so customers do not expect an unlimited free purse - and curb universal benefits and cut back teh absolute levels of benefits.... before we can afford to have lower rail fares. As no-one in the country even accepts we have a crisis bad enough to do anything serious about it.. the Rail System is going to continue to be very expensive. And for those who rant about Overseas Aid : yes it is wasteful and should be cut - but it makes no difference to the bigger picture. The largest problem is Diabetes on which the NHS spends approx 10% of its budget - and all the other social costs - and yet this is an illness largely caused through self harming (obesity - fatties).. And then alcoholism. When you can maltreat your body and get free treatment - often better than those who work and pay taxes - the system has priorities wrong. No self help = no State help would cut down illness and spending dramatcially. Well that is not going to happen.. so by 2025 expect to see the system in crises which makes Greece look like a tea party. |
|
New Wed 3 Oct 12 14:44
West Coast Rail bids - Alanovich
|
|
madf, if I remember correctly, around 4 years ago when the current economic woes beagn to surface, you were arguing that this country would go to the dogs within 4 or 5 years. We would all be eating bin scraps at council refuse dumps and the country would look like a scene from Mad Max. Now it's not going to happen until 2025. The truth of the matter is that yes, apocalyptic scenarios are possible, but vanishingly rare in this country, as we are pretty good at averting it, and pretty pragmatic in general. Whilst accepting that things aren't ideal and in all likelihood never will be, I don't think the Greek scenario is going to unfold here. |
|
New Wed 3 Oct 12 15:03
West Coast Rail bids - Manatee
|
|
A number of things are conspiring to make fecklessness of all kinds a lifestyle choice. Welfare is one. It goes hard for me to say this, and it's an economic point not a political one; but you can't expect to set a decent standard of living as a basis for welfare payments and not expect people to "opt" for it or be reluctant to leave it. It's not a new problem. Even the workhouse had its advantages for the customers. Pasted from Wiki - "... by the early 1830s the established system of poor relief was proving to be unsustainable. The New Poor Law of 1834 attempted to reverse the economic trend by discouraging the provision of relief to anyone who refused to enter a workhouse... Life in a workhouse was intended to be harsh, to deter the able-bodied poor and to ensure that only the truly destitute would apply. But in areas such as the provision of free medical care and education for children, neither of which was available to the poor in England living outside workhouses until the early 20th century, workhouse inmates were advantaged over the general population, a dilemma that the Poor Law authorities never managed to reconcile." Pensions are another - it's now not worth many people even trying to provide themselves with a pension. Pensions would have been a problem anyway; but robbing pension funds by taxing their income while diverting the money to the 'client state' who will vote for the party that maintains and increases benefits made both problems worse. There will never be a propitious time to deal with this unfortunately - now is worse than usual, given our leaden economic performance at the front end. |
|
New Wed 3 Oct 12 16:30
West Coast Rail bids - Lygonos
|
|
I've said it before and I'll say it again - monstrous amounts of this nation's wealth, income and productivity is wasted by paying too much for the roof over our heads. Tying up 30+% of a family's income simply to live somewhere when a fair chunk of that could be otherwise spent on goods/services/education must be inefficient? Rather than trams for Edinburgh perhaps deflating the silly house prices by building more or new communities might be an option? Too many vested interests involved in keeping house prices up I guess. |
|
New Wed 3 Oct 12 17:26
West Coast Rail bids - Manatee
|
|
Unfortunately falling house prices are seen as a problem by anybody with a mortgage. One of my occasional themes is that in some ways family life was better in the 60s, when the 'standard' household had one parent at home looking after the children. Now there are more one parent families than households like that, and more still where both parents work. But does having two earners improve people's lives, when all the extra money appears to have gone into pushing up house prices, abetted by lenders upping the earnings multiples for mortgages? It's now just not possible for a middling earner to contemplate being the sole breadwinner with a family. Only slightly off topic ;-) |
|
New Wed 3 Oct 12 23:34
West Coast Rail bids - Bromptonaut
|
|
>> I've said it before and I'll say it again - monstrous amounts of this nation's >> wealth, income and productivity is wasted by paying too much for the roof over our >> heads. I've just got in from a leaving do for one of our Research Assistants. Top level Law Graduate in her first degree with Masters and foreign law quals as well. Two or three other attendees were from similar posts and backgrounds. They're all reconciled to paying £600+ pcm for rooms in shared flats/houses. They are on salaries of £25k+ (albeit with aspirations for the bar or solicitor professions. How do folks in ordinary jobs manage? |
|
New Thu 4 Oct 12 08:53
West Coast Rail bids - Zero
|
|
In my last job, just before I retired, I was earning in excess of twice the national average pay. I could not have afforded, to have started on the housing ladder in the area in which I now live. But then looking back, when I did start on the housing ladder, it was nearly as bad. Mortgage rates varied around the 8% mark (always variable - no fixed rate deals in those days - a hike in the rates could cripple you), 3 times joint was the max you could get, scrimp and save for a deposit. So you start off buying in areas you wouldn't want to live, buying a shed and doing it up as you live in it, giving up on holidays, treats and goodies, in effect you work for it. I suspect few of our current 20 somethings are prepared to give up the gigs, the nights out, the ipad, the iphone and most of the ones I see have this strange desire to want to live in areas where there is stuff going on. Fine, but you cant afford to buy there. |
|
New Thu 4 Oct 12 10:16
West Coast Rail bids - Bromptonaut
|
|
Back to the OP subject there's a lot of analysis in this month's Modern Railways though obviously it was in print before yesterday's bombshell. Covers both specifics of WCML and some more historic analysis of franchising back to the early examples - C2C etc. Not absorbed it all yet but the crux seems to be around differing predictions of ridership and farebox take towrds end of franchise. Could today's figures have been accurately predicted in 2000? Guardian suggests there might also be an anti Branson culture in rail division of DfT. Basically goes back to deal he cut for Virgin after the WCML 140mph upgrade went t*ts up. |
|
New Thu 4 Oct 12 10:27
West Coast Rail bids - Zero
|
|
>> Guardian suggests there might also be an anti Branson culture in rail division of DfT. >> Basically goes back to deal he cut for Virgin after the WCML 140mph upgrade went >> t*ts up. There were never any firm promise to up the line speed to 140mph certainly no plans to install cab signalling (required for 125mph+ HST) nor was the promise included in the franchise. Virgin assumed they would be allowed to run faster using the Pendolinos and not implement cab signalling. Wrongly as it happened. |
|
New Thu 4 Oct 12 11:13
West Coast Rail bids - Bromptonaut
|
|
>> There were never any firm promise to up the line speed to 140mph certainly no >> plans to install cab signalling (required for 125mph+ HST) nor was the promise included in >> the franchise. Virgin assumed they would be allowed to run faster using the Pendolinos and >> not implement cab signalling. Wrongly as it happened. My understanding is that there were agreements between Railtrack and West Coast Trians to have 140mph running by 2005. They failed to deliver that. The backround was escalating costs, lack of resolution on moving block (or other in cab) signalling and above all the problems of finessing 140mph running with the needs of other operators, particularly Silverlink at the Euston end and with freight. As a result of the failure and acceptance of 125 as max speed Virgin got a variety of advantages in cash, operating the line on a cost plus profit %age for several years and moderation of competiton. The latter meant they were protected from the sort of inroads made by Hull trains et al on the ECML. It also jiggerd the Wrexham and Shropshire project as that outfit was prevented competing for Brum trafic. Last edited by: Bromptonaut on Thu 4 Oct 12 at 11:17
|
|
New Thu 4 Oct 12 11:45
West Coast Rail bids - Zero
|
| There was never any agreement for cab signalling on the west coast mainline written into the tender document. After the high speed tests on the ECML in 1991 it was decreed by Her Majesties Railway Inspectorate that only cab signalling would allow speeds in excess of 125, and this rule has never been rescinded. Branson was warned of this but proceeded to buy the pendolinos hoping to blackmail the Gov of the day into back peddling on this. It worked cash wise. The West Coast mainline for most of its route, is totally unsuited for high speed running for lots of fundamental reasons. Nothing will change this - Hence the need for HS2. |
|
New Thu 4 Oct 12 11:55
West Coast Rail bids - smokie
|
|
Not read it all, but pay bigger peanuts is GODs take on it... www.bbc.co.uk/news/uk-19827178 |
|
New Thu 4 Oct 12 12:09
West Coast Rail bids - Zero
|
|
Hes complaining their pay is limited because they cant get paid more than the PM. What more proof do you need that he thinks he is running the country. |
|
New Thu 4 Oct 12 12:11
West Coast Rail bids - Bromptonaut
|
|
>> Not read it all, but pay bigger peanuts is GODs take on it... >> >> www.bbc.co.uk/news/uk-19827178 There is a real problem in attracting people with particular skills under present arrangements. Procurement and project management are particular examples I've seen quoted as risks to work in progress. Not about giving the same monkeys bigger peanuts but about what's needed to recruit, motivate and retain folks with the right skills. No help either if Ministers are going to publicly dump on their staff when stuff goes wrong. The spirit of Sir Thomas Dugdale and Peter Carrington is long dead. The other GOD point, that using the PM's (arguably inadequate) salary as a benchmark for reasonable pay is pretty unhelpful, also holds. |
|
New Thu 4 Oct 12 12:15
West Coast Rail bids - Zero
|
|
>> The other GOD point, that using the PM's (arguably inadequate) salary as a benchmark for >> reasonable pay is pretty unhelpful, also holds. Thats a completely indefensible statement that could only be uttered by a civil servant Last edited by: Zero on Thu 4 Oct 12 at 12:15
|
|
New Thu 4 Oct 12 12:31
West Coast Rail bids - Bromptonaut
|
|
>> Thats a completely indefensible statement that could only be uttered by a civil servant What on earth is indefensible about a qualified statement that some public sector specialists might command more than c£140k pa? And before you trot out the pension, these are not, on the whole, going to be people who serve long enough for anything worthwhile to accrue |
|
New Thu 4 Oct 12 13:03
West Coast Rail bids - Zero
|
|
>> >> Thats a completely indefensible statement that could only be uttered by a civil servant >> >> >> What on earth is indefensible about a qualified statement that some public sector specialists might >> command more than c£140k pa? I cant believe you think that level of salary is defensible for a civil servant. |
|
New Thu 4 Oct 12 13:19
West Coast Rail bids - madf
|
|
The trouble with the Civil Service is that the management just adore salary creep as it means they get paid more. Do they deliver more and better results as a result? They would be better hiring peopel on a temporary absis as consultants.. Oops they do that already.. What we are talking here is NOT rocket science. It's basic inflation and volumes and then checking . Neither of which were done. On that basis the people involved were grossly overpaid. Last edited by: madf on Thu 4 Oct 12 at 13:19
|
|
New Thu 4 Oct 12 14:06
West Coast Rail bids - Manatee
|
|
You must have seen some information I missed madf - surely they haven't just compared nominal cash flows? Not even a civil servant on less than £140,000 a year can be that stupid ;-) I agree the DCF is a simple calculation once you've picked the real discount rate and got a table of payments, but Shirley the hard bit is deciding what cash flows to use? If the taxpayer is taking the risk on the revenue assumptions you can't lob the bidder's projections in. Even if that risk stays with the bidder, you then have somehow to price the risk of them getting it wrong and defaulting and chuck that in as well. Then the comparison between bidders will also change when you flex the economic assumptions like inflation and interest rates. I agree it's not rocket science, but in some respects it's harder than that, because it's forecasting. There's some real expertise involved, or should be, and one thing you can be sure of with a forecast is that it will be wrong - by a bit, or a lot. Not that I'm defending it, the fact that everybody responsible now seems to agree it was a cock up rather suggests it was done badly. And I don't agree by the way that the minister is off the hook just because they take advice. They should be bright enough to interrogate the advice, or to find somebody who can. Only when they've done that properly have they discharged their responsibilities. Accountable is accountable, or they might as well not be there at all. |
|
New Thu 4 Oct 12 14:11
West Coast Rail bids - Zero
|
|
Economic and financial forecasting, specially in the treasury, is the one thing the civil service should be expert in, its fundamental to the job. If they cant do that right their whole competence to administer government is called into question.
Last edited by: Zero on Thu 4 Oct 12 at 14:11
|
|
New Thu 4 Oct 12 14:21
West Coast Rail bids - Manatee
|
| I agree, I'd expect them to use the Treasury forecasts for interest rates, inflation, growth etc. rather than inventing their own. |
|
New Thu 4 Oct 12 14:27
West Coast Rail bids - madf
|
|
And I don't agree by the way that the minister is off the hook just because they take advice. They should be bright enough to interrogate the advice, or to find somebody who can. Only when they've done that properly have they discharged their responsibilities. Accountable is accountable, or they might as well not be there at all. First port of call for responsibility before the Minister has to be the Permanent Secretary. He/she is the link: who should have investigated and made sure that it was done properly. Then when the questions started flowing, he/she should have investigated thoroughly. It would appear neither was done.. A department which has a revolving minister - 3 in 2.5 years under this Government and 10 in 13 under the prior one - has to have a COMPETENT Permanent Secretary... |
|
New Thu 4 Oct 12 14:31
West Coast Rail bids - Manatee
|
|
Fair point. And a good reason not to change the responsible minister every verse end. Did you have some detailed information, or were you just assuming they did it with a list of cash flows and ballsed up the arithmetic? |
|
New Thu 4 Oct 12 15:49
West Coast Rail bids - madf
|
|
>> Fair point. And a good reason not to change the responsible minister every verse end. >> >> Did you have some detailed information, or were you just assuming they did it with >> a list of cash flows and ballsed up the arithmetic? >> No.. I just did a quick DCF based on the available numbers., That showed the two quotes were about the same.. Now I know that risks are not equivalent to discounted cashflows.. but I fail to see how any sensible and logical review of the proposals - in financial terms - could have come up with First Group being better financially than Virgin.. Greening - Minister at the time - is an accountant.. She MUST have known that.. I suspect there is more than we have been told about the failures ... |
|
New Thu 4 Oct 12 14:30
West Coast Rail bids - Bromptonaut
|
|
>> I cant believe you think that level of salary is defensible for a civil servant. >> Salaries at that level, and I'm talking here about professionals with serious qualifications and track records, are either defensible or they're not. Not a matter of of who's paying. It's naive in the extreme to expect those guys to work for 60% of what they'd command outside for the pleasure of being employed by the state. They needn't be permanent, could be on FTC. I doubt anybody joining now will have the sort of service length of the over fifties in the service now. Last edited by: Bromptonaut on Thu 4 Oct 12 at 14:32
|
|
New Thu 4 Oct 12 14:34
West Coast Rail bids - Manatee
|
| I know a few people in the private sector getting more than £140k that I wouldn't employ to wash my car. |
|
New Thu 4 Oct 12 14:38
West Coast Rail bids - Bromptonaut
|
|
>> I know a few people in the private sector getting more than £140k that I >> wouldn't employ to wash my car. Mirros my experience with interim managers/contractors with charge out rates north of £k/day. The odd one or two were very good indeed but others were frankly charlatans. |
|
New Thu 4 Oct 12 15:40
West Coast Rail bids - movilogo
|
| I would rather blame them who agreed to pay them that much :-) |
|
New Thu 4 Oct 12 15:45
West Coast Rail bids - John H
|
|
>> I know a few people in the private sector getting more than £140k that I >> wouldn't employ to wash my car. >> Of course not! You would get someone working in the black economy at under minimum wage rate. :) p.s. Why aren't you the one of those getting more than £140k? ( I hope that does not come across as rude to Focus or others). Last edited by: John H on Thu 4 Oct 12 at 15:46
|
|
New Thu 4 Oct 12 16:03
West Coast Rail bids - Focusless
|
|
>> ( I hope that does not come across as rude to Focus or others). There are no insults, so I don't see why you think it would. |
|
New Thu 4 Oct 12 16:18
West Coast Rail bids - John H
|
|
>> There are no insults, so I don't see why you think it would. >> Glad to know that. I was being cautious just in case one is seen where none exists, and was not intended if it did. ;-) Last edited by: John H on Thu 4 Oct 12 at 16:19
|
|
New Tue 9 Oct 12 10:38
West Coast Rail bids - madf
|
|
Just reading Peston's Blog on the abortive shambles.. "But what the Department for Transport discovered in the last few days is that the capital protection being offered was far too little. That was not FirstGroup's fault. It was because of assumptions in the department's own model about what would happen to inflation and passenger numbers - which in turn meant that the ready reckoner given to bidders was wrong. In fact, the department's mistakes meant that all the bids were offering far too little protection to taxpayers against the possibility of a franchise holder being unable to hold the franchise for the full 15 years." www.bbc.co.uk/news/business-19881240 So the Department of Transport built a model on which they based everything.. and did not audit it properly before they used it? The Permanent Secretary.. is to blame. Period. Gross incompetence. Last edited by: madf on Tue 9 Oct 12 at 10:38
|
|
New Tue 9 Oct 12 11:43
West Coast Rail bids - Dutchie
|
| A diabolical cock up and over 100 million wasted.We are all in this together.We have to tighten our belts according to Osborne.The permanent secretary is on holiday basking in the sun.>:) |
|
New Tue 9 Oct 12 12:10
West Coast Rail bids - NortonES2
|
| I'm not sure that Pestons argument about projected passenger numbers etc is the ful story. The bidders tender figures differed, to the extent that FG built in an advantage based on rather optimistic returns in the latter years. According to Virgin, on which argument the whole process was halted. As for modelling, that would be carried out by consultants. DfT is apparently heavily dependent on outside agencies: that is certainly a Government policy. |
|
New Tue 9 Oct 12 19:46
West Coast Rail bids - Bromptonaut
|
|
>> So the Department of Transport built a model on which they based everything.. and did >> not audit it properly before they used it? >> >> The Permanent Secretary.. is to blame. Period. >> >> Gross incompetence. >> Or maybe it's the Minister who's to blame: www.standard.co.uk/business/markets/anthony-hilton-tracking-down-the-real-rail-culprits-8203849.html The civil servants suck their teeth and say 15yr franchises Minister? Well here are the reasons it might not work. Minister says JFDI (and this lot are not keen on evidence based policy). As predicted it goes mams up and Govt blame the staff. |
|
New Wed 10 Oct 12 08:29
West Coast Rail bids - madf
|
|
Having read Hilton's article , as usual it is full of carp. For example near the start : "George Osborne has demonstrated time and again that he cannot accurately predict Government finances six months ahead" No-one can predict the economy accurately. No-one claims to do so.The ONS can't even tell what the past is accurately. It continuously revises the last quarter GDP. So to suggest anyone cannot forecast the next 6 months accurately is a sign of lack of competence is either mendacious or ignorant. But hey it's The Independent... |
|
New Wed 10 Oct 12 09:22
West Coast Rail bids - NortonES2
|
| +1 madf. It is widely believed by non-economists that the financial status symbols of our time are a given. Consider how for example GDP figures are calculated. By thousands of samples from various elements of legitimate businesses, government and consumer activities. Obviously, the highly variableunderground markets (10% -20% of GDP are excluded!) The results are revised frequently, but are not really accurate for about 2 years, IIRC. Not to mention fundamental concerns such as calculation of GDP in US dollar: subject to inflation/deflation value changes for external currencies. It's all rather vague, which makes 15 year franchises a bit rash. Not for the TOC of course. |
|
New Wed 10 Oct 12 10:11
West Coast Rail bids - Bromptonaut
|
|
Is Hilton questioning the Chancellor's competence? I read it as illustrating the impossibilty of forecasting over a short timescale never mind the 15years of a rail franchise. |
|
New Wed 10 Oct 12 15:26
West Coast Rail bids - NortonES2
|
| I don't think Hilton is getting at Osborne, since no Chancellor can be sure how the economy will perform in the next 6 months, now I re-read his article. I retract my +1 and make it +0.5:) |
|
New Thu 11 Oct 12 14:33
West Coast Rail bids - madf
|
|
Back on topic. I read in today's DT that the workings underlying the bid process and the outout from the model is missing and the results reached cannot be replicated.. tinyurl.com/9lbvkwp Which sounds to me like a deliberate attempt to conceal evidence -or gross incompetence in process.. Now surely the internal reviews commissioned after Branson complained but before the Court case.. would have found that to be the case? Of course, I assume the internal review was properly carried out. Curiouser and curiouser as Alice said. I cannot understand how the Permanent Secretary can survive this. |
|
New Thu 11 Oct 12 14:34
West Coast Rail bids - movilogo
|
|
Nearly all businesses (both large and small) need to forecast/estimate their revenue/profit for next one year at least (often they have forecast for next 3 years). So if country's finance minister can't reasonably predict government's revenue and outgoings, that is indeed sign of incompetency. |
|
New Thu 11 Oct 12 15:02
West Coast Rail bids - Bromptonaut
|
|
>> Nearly all businesses (both large and small) need to forecast/estimate their revenue/profit for next one >> year at least (often they have forecast for next 3 years). >> >> So if country's finance minister can't reasonably predict government's revenue and outgoings, that is indeed >> sign of incompetency. In normal times that may be so though even then profit warnings are not uncommon. There are plenty more in recent less stable times not least in retail. |
|
New Thu 11 Oct 12 15:11
West Coast Rail bids - NortonES2
|
|
The Chancellor, whatever the party, can only forecast within the margin of error for GDP predictions. Proxy data derived from 3rd parties has to be collected from the not very willing. Obviously it's not collected at all from some significant segments. It's not a welcomed job to help the Government! Some commentators rank countries GDP numbers by margin of error bands. "A" is +/– 9% "D" is +/- 30%. China is a special case. +/- 50% For a single firm, where there is a chain of command, real data is collected, and there is a strong incentive, the margin is small. National figures are orders of magnitude more difficult to collect in the time available. The authorities do not really want to discuss the accuracy of GDP numbers, and as the attached article points out the ONS are strangely vague. tinyurl.com/8kccka3 |
|
New Mon 15 Oct 12 10:13
West Coast Rail bids - VxFan
|
|
Virgin Trains will be asked to continue to run services on the West Coast Mainline for at least another nine months after the latest decision on the route franchise was scrapped. www.bbc.co.uk/news/uk-19944782# |
|
New Mon 15 Oct 12 10:18
West Coast Rail bids - madf
|
|
Real problem for the Government: If Virgin lose their franchise, the rail side will close as no other business. So even less competition.. (I bet the Last edited by: madf on Mon 15 Oct 12 at 10:19
|
|
New Mon 15 Oct 12 11:23
West Coast Rail bids - Zero
|
|
>> Real problem for the Government: >> >> If Virgin lose their franchise, the rail side will close as no other business. So >> even less competition.. >> >> (I bet the The Virgin name is just a front, they are in partnership with other rail transport companies. Its not as tho all the drivers, guards, schedulers, planners, disappear down a black hole. In most cases all that changes between franchisers is the logos on the trains. |
|
New Mon 15 Oct 12 10:20
West Coast Rail bids - Bromptonaut
|
|
Report on Today suggested this extension would be followed by a competed Franchise for two years. Only after that would the longer 13-15 year franchise as won by First be offered. That suggests to me that Tony Hilton's analysis (see upthread), ultra long franchises too risky without govt underwrite, was not too far out. Further analysis, modelling and reasoned thinking needed. Last edited by: Bromptonaut on Mon 15 Oct 12 at 10:21
|
Forum Version 3.0 - By Khoosys
Car4play Forum
