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  • Initial Emergency Measures end: September 20, 2020
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Author Topic: Beyond current Emergency Measures - where will we be on 21st September?  (Read 1896 times)
grahame
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« on: August 26, 2020, 09:35:05 am »

From Rail Business UK with the rest of the article hidden ...

Quote
UK: With the current Emergency Measures Agreements with franchised passenger train operating companies set to expire on September 20, industry sources report that some TOCs have been ‘resistant’ to the terms of the successor Emergency Remedial Measures Agreements proposed by the Department for Transport.

But the questions DOES arise - "what will be the operating and financial arrangements in less than 4 weeks from now" and "what are the various parties looking to get from them"
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« Reply #1 on: August 26, 2020, 10:16:17 am »

One thing is for sure, the DfT holds all the cards!
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« Reply #2 on: August 26, 2020, 01:37:41 pm »

One thing is for sure, the DfT holds all the cards!

Problem is the cards are all jokers  Grin
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« Reply #3 on: August 26, 2020, 05:31:50 pm »

From the Institute of Economic affairs (quoting just extracts from a longer article to give members a flavour of the key points):

Quote
Attention is now turning to what the government will do when the current “Emergency Measures Agreements” – hastily put in place to ensure trains kept running when passenger numbers nosedived by 95% as lockdown began – comes to an end in September.

One suggestion is that the government is offering operators deals on such wafer-thin margins that they will struggle to even cover their overheads, in effect forcing private operators off the tracks. The pleas of train companies for government to write into contracts incentives for them to regrow passenger numbers have apparently been rejected. This is utterly perplexing given the DfT is calling for innovation as it appears devoid of any purposeful ideas itself.

Then came the idea that Network Rail (the state-owned infrastructure successor to Railtrack), which looks after 20,000 miles of track, could be put in charge of running the entire system, including letting contracts for passenger services.

Rail executives understandably baulked at the prospect of a company which carries with it a history of profligacy and delays – its upgrade to the Great Western mainline trebling in cost and arriving years late – being put in total charge. Its corporate culture is entirely focused on looking after the track infrastructure, not passengers, but it is the latter that is crucial to the commercial recovery of the sector left reeling from the impact of Covid-19.

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The ability to spot an opportunity, take a risk and reap the rewards will be crucial to the railway’s future. In my own small way I know this only too well having just set up the UK’s first ever multi train timetabled dedicated tourist rail service in North Yorkshire.

In its first week the business – Rail Charter Services Ltd – has received widespread press coverage both at home and abroad. There has been enthusiastic support from councils, MPs, tourism authorities and local businesses. By adopting a true customer centric approach, lateral entrepreneurial thinking – and a strict zero tolerance approach to “jobsworths” and “nae-sayers” – we saw bookings grow 550% in the first week! This is what can be achieved if only ....


Quote
In the coming weeks and months, the DfT will decide what will replace the current short-term contracts it has with train operators and will set out a plan for long-term reform of the railway. While there may be a role for the state in light-touch regulation and considerations of underwriting uneconomic routes for social, political or economic development reasons, I believe that this review should halt the creeping renationalisation of the railway and unleash the market discovery process – which may lead to mergers and vertical integration – if the Conservatives wish to reclaim the mantle as the party of free enterprise.


Adrian Quine is an entrepreneur and former BBC World Service broadcast journalist. He is a director of “Rail Charter Services Ltd” and developed the concept for this service. He was one of the founders of Open Access operator Alliance Rail Holdings Ltd, now owned by Arriva Group PLC. He has written a number of think tank policy papers and briefs and Telegraph op-eds about transport.
« Last Edit: August 26, 2020, 05:38:38 pm by grahame » Logged

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« Reply #4 on: August 26, 2020, 07:25:13 pm »

I think it's certain we will see a temporary reduction in services as it won't be financially viable to keep the current normal service levels running if the custom isn't there. It would certainly be a good time to follow the airline industries example and remove older locomotives from the fleet or place them in long term storage.  It could mean most of the Class 14x's are gone for good.

I do think 2021's price rise should be scrapped, and TOC's should be allowed more flexibility in their ticketing options, be it prices or choices for at least the next 3 years to bring custom back to the railways. 

In terms of the rumors of mass culling of regional railway lines and halving of intercity services, I don't think it will be exactly like that. But I do think the railway as a whole are going to have to be a bit more creative, such as joining up shorter services and making better use of available rolling stock.
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« Reply #5 on: August 29, 2020, 01:34:12 am »

It does feel the pandemic offers an opportunity to redraw so many things - not just trains. Unfortunately I'm not sure the current government gets it and seems wedded to the old way of doing things. The more I read about their wanting office workers to get back to their desks the more it feels a missed opportunity. Yes there is a financial cost but that money not being spent in London, for example, could be spent elsewhere.

Revitalise local high streets, simplify the ticketing system, carnet type tickets, invest in broadband rather than HS2. Move people out of the over crowded south east. Instead all I read from most of the government is an attempt to return to 'before'. My limited knowledge of Network Rail based on people who have worked there is that they really don't understand customers and rail users and are probably the last company to come up with new ideas.

Apart from it being the government's own legal regulations that stop me returning to the office why would I want to go back to travelling on overcrowded and expensive trains in the early hours of the morning.
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grahame
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« Reply #6 on: August 30, 2020, 07:14:59 pm »

From Rail Business UK with the rest of the article hidden ...

Quote
UK: With the current Emergency Measures Agreements with franchised passenger train operating companies set to expire on September 20, industry sources report that some TOCs have been ‘resistant’ to the terms of the successor Emergency Remedial Measures Agreements proposed by the Department for Transport.

But the questions DOES arise - "what will be the operating and financial arrangements in less than 4 weeks from now" and "what are the various parties looking to get from them"


City A.M. has some thoughts and perhaps some information

Quote
The government’s back to work campaign, due to launch this week, could be derailed amid a row brewing with train operators.

In March the coronavirus outbreak prompted ministers to take the UK’s trains under emergency measures for six months to protect them from any losses incurred by the 95 per cent slump in passenger numbers.

Whitehall officials are scrambling to finalise new contracts called Emergency Recovery Measures Agreements (Ermas), according to the Sunday Telegraph.

The government spent around £3.5bn between March and mid-June propping up operators’ finances but ministers are desperate to keep the taxpayers’ bill to a minimum.

The Department for Transport has reportedly earmarked four networks for less favourable terms so as not to have too big an impact on the Treasury. The Sunday Telegraph reported that South Western Railway, Transpennine Express, Greater Anglia and commuter line C2C will be offered wafer-thin profit margins.

Greater Anglia and C2C are said to be particularly aggrieved by the deal which is underpinned by a “flawed” mechanism, linking payments to operate the lines to London employment figures.
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« Reply #7 on: September 01, 2020, 09:07:15 am »

From RailNews

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THE Department for Transport has extended the Emergency Measures Agreement on Great Western Railway from 20 September to at least 26 June next year.

The EMAs protect franchises from the financial impact of the pandemic, because all costs and revenues are handled directly by the DfT, with a management fee paid to the franchise holder.

GWR’s owner FirstGroup also said that the EMA could be extended again. If not, the terms of the franchise until its expiry in March 2023 could be renegotiated with a ‘revenue rebasing’. The expiry date of March 2023 can also be extended by a further 12 months.

FirstGroup chief executive Matthew Gregory said: ‘We welcome the news of the extension of the EMA for GWR. This demonstrates the essential nature of GWR’s services to the communities it serves, and provides important clarity and continuity for our customers, employees and wider stakeholders.’
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« Reply #8 on: September 01, 2020, 09:12:35 am »

And official announcement via https://www.firstgroupplc.com/investors/regulatory-announcements.aspx

from within that:

Quote
Extension of GWR Emergency Measures Agreement
Released : 01.09.2020

FirstGroup plc (‘the Group’)

Statement re extension of Great Western Railway Emergency Measures Agreement

We are pleased to announce that the Department for Transport (‘DfT’) has today exercised its option to extend the Emergency Measures Agreement (‘EMA’) for Great Western Railway (‘GWR’) until at least 26 June 2021.

On 30 March 2020 we announced that we had signed an agreement with the DfT to continue operating GWR until March 2023, with a possible one-year extension.

At that time, we also announced that the franchise would run under EMA terms for at least the first six months in response to the coronavirus outbreak. That time period is now expiring and therefore the DfT has exercised its option for the EMA to continue under the same terms and conditions as previously. Under the EMA, the DfT waive our revenue, cost and contingent capital risk and GWR are paid a fixed management fee with the potential for a small performance-based fee.

Before the end of the EMA period in June 2021, the DfT has an option to further extend the EMA. GWR also has the right to revert to operating with revenue risk but with protection provided though the Forecast Revenue Mechanism until at least 2023. The franchise agreement also makes provision to agree a revenue rebasing which would apply at the end of the EMA term.

The parent company support and performance bond commitments associated with GWR are each £10m, and cash ring-fenced within the train operating company was £266m as at 31 March 2020, out of a First Rail total of £612m.

GWR’s existing EMA was signed on the same day as the new franchise agreement in March, and the DfT’s option to review the EMA formed part of that contract. This process and timing is different from our other three rail franchises which were already on established franchise agreements before adopting EMAs in response to the pandemic. Discussions are underway with the DfT about these franchises which are under EMAs until 20 September 2020. Further updates will be provided to the market as appropriate.

Commenting, Matthew Gregory, Chief Executive said:

“We welcome the news of the extension of the EMA for GWR. This demonstrates the essential nature of GWR’s services to the communities it serves, and provides important clarity and continuity for our customers, employees and wider stakeholders. Across the network we are increasing service levels to provide more capacity as schools recommence and work and leisure facilities reopen, and we are taking all necessary steps to ensure our passengers continue to travel safely. This includes running services with more carriages to allow for distancing, enhanced cleaning and sanitisation of our trains and ensuring more customer-facing employees are readily available. We look forward to delivering further plans that will bring improvements for passengers over the next few months and into the future.”

About GWR

Great Western Railway provides high speed, commuter, regional and branch line train services and help more than 100 million passengers reach their destinations every year - across South Wales, the West Country, the Cotswolds, and large parts of Southern England. The network is currently seeing the biggest investment since Brunel so we can offer more trains, more seats, and shorter, more frequent journeys and continue the network’s heritage of helping connect more businesses to new markets. Through a series of initiatives, we aim to be a good neighbour to the communities we serve and are committed to making a positive social impact in those regions.

Since 2015, GWR has delivered new fleets of modern intercity and local trains and successfully introduced the largest timetable change in decades in December 2019. Building on these improvements, GWR recently took delivery of the UK’s first tri-mode train able to run on overhead and third-rail electric lines, as well as under its own diesel power, which will enter service next year. The franchise is also due to introduce new more flexible tickets for customers who do not commute every day, such as discounted part-time season tickets and the extension of paperless pay-as-you-go schemes.
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« Reply #9 on: September 01, 2020, 11:43:55 am »

And the GWR "take" to Stakeholders ...

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Dear Graham
 
You may have seen media reports following FirstGroup’s announcement of an extension of GWR’s Emergency Measures Agreement.  In case you haven’t I have included a link to the report in the Evening Standard below.   
 
We are pleased that the Government has taken this decision. It ensures that we can continue to operate during the current situation, providing services that are essential to restarting the economy.   Our responsibility is to run a service that our customers and our partners can rely on, and we have taken sensible measures to make sure customers can travel by train with confidence. This means we can continue to run this key part of the nation’s railway in a safe and sustainable way as the country takes the next steps in responding to the situation.
 
Importantly, it also means we can look to the future and continue to develop and deliver our plans for improvements for our customers and communities. We look forward to working with you on this and we are grateful for the support and encouragement that you have given to our teams as they have worked to keep services running throughout the last six months.
 
Best wishes
 
Matthew
 
Matthew Golton | Interim Managing Director | Great Western Railway
Milford House | 1 Milford Street | Swindon | SN1 1HL
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« Reply #10 on: September 01, 2020, 03:40:38 pm »

And the views from the RMT

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Senior Assistant General Secretary Mick Lynch said;

"It's vital that the Government continue to finance our railways as the broken privatised system has shown it simply cannot withstand a crisis. With Ministers pushing their back to work drive we need stability and long-term assurance and planning rather than ad-hoc short-term emergency measures. The private, franchise system is not able to deliver that as the current de-facto nationalisation of the railways has shown as clear as day.

"What is completely unacceptable though is these bailouts all taking place behind closed doors with zero transparency and zero accountability to the taxpayer.

"Also if these bailouts are done on an individual operator by operator basis it will entrench the fragmentation of our railways when what we need is a publicly owned railway funded in the national interest not those of privatised shareholders."
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« Reply #11 on: September 11, 2020, 02:03:22 pm »

And the views from the RMT

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Senior Assistant General Secretary Mick Lynch said;

"It's vital that the Government continue to finance our railways as the broken privatised system has shown it simply cannot withstand a crisis. With Ministers pushing their back to work drive we need stability and long-term assurance and planning rather than ad-hoc short-term emergency measures. The private, franchise system is not able to deliver that as the current de-facto nationalisation of the railways has shown as clear as day.

"What is completely unacceptable though is these bailouts all taking place behind closed doors with zero transparency and zero accountability to the taxpayer.

"Also if these bailouts are done on an individual operator by operator basis it will entrench the fragmentation of our railways when what we need is a publicly owned railway funded in the national interest not those of privatised shareholders."

Although these are no bailout's are they, such a stupid mantra from the RMT. The last railway bailout was WW2, if the government didn't provide this emergency funding all the TOC's would just hand back the franchises and the government's emergency operator would be running them.

Hopefully this new deal will put GWR on a level footing and by next year should be back on it's feet again. I find it interesting why only GWR have got this extension and no others have, as of yet anyway.
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« Reply #12 on: September 11, 2020, 02:15:19 pm »

I find it interesting why only GWR have got this extension and no others have, as of yet anyway.

Simplicity basically.  The DA3 (Direct Award 3) deal was signed pretty much as the Emergency Measures Agreement was being enforced, so comparatively easy to arrange a deal.
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« Reply #13 on: September 17, 2020, 06:11:18 pm »

And from the TSSA

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TSSA Slams Government Over Rail Shareholders Covid Payouts 
17 September 2020

TSSA General Secretary, Manuel Cortes, has attacked the Government over the "national scandal" of rail franchise shareholders receiving millions in profits under the Coronavirus Emergency Measures Agreements (EMA's).

The EMA?s - which are due to end on Sunday (20th September) - saw all franchises in England bailed out, removing the commercial risk for train operating companies, while continuing to guarantee management fees. 

Today Labour?s Shadow Transport Secretary, Jim McMahon, told MPs - ??100m has been paid out to shareholders, many of which are foreign governments?. He also criticised Transport Secretary, Grant Shapps, for failing to update Parliament about plans for the railways once EMA arrangements expire. 

GWR carries on until next spring in EMA ... but have we any other announcements yet?
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« Reply #14 on: September 18, 2020, 10:18:49 am »

Up the creek without a paddle.
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