East Coast franchise - ongoing discussion, merged topic

[whole diary]

[Andrew1939 from West Oxon]

"Passenger numbers have increased by 3 per cent in the last year (2010/11), and last month DOR posted an operating profit of ^183 million on turnover of more than ^645 million for the year ending 31 March 2011. It has subsequently returned ^177 million this year in service payments to the public purse ^ and East Coast is now one of the best financial performers in the rail industry."


If a government owned company can turn a loss making commercial franchise around like this, why not just let DOR take over the Greater Western franchise in 2013 with a simple remit to do the same?

[ChrisB]

Off to work on bids for National Express. Some hope of them winning anything in the near future....

[JayMac]

Off to work on bids for National Express.

Is there a source for that?

I've found a story with rumours of her next gig. From the PFAS News blog:

There are several rumours floating around the industry with the top two being that she has been poached to take a senior role within ATOC^» (Association of Train Operating Companies See - here) or that FirstGroup^s new CEO^▸ (Chief Executive Officer), Tim O^Toole has said ^get her back at any cost^ and she will become a senior figure within FirstGroup. Of course these rumours are just that, rumours and unconfirmed.

PFAS= Penalty Fare Appeal Support

[ChrisB]

A tweet from Philip Haigh, if I remember correctly.

[JayMac]

Thanks for that ChrisB.

@philatrail (Philip Haigh, Business Editor, RAIL magazine) tweeted:

"Elaine Holt to work for National Express on bids."

Interesting that the company which gave up on the East Coast franchise is now rumoured to be courting Ms Holt....

NXGW^▸ (National Express Great Western - a bidder for 2013 franchise) anyone? 

[Chris from Nailsea]

From The Telegraph:

A senior executive at state-owned rail firm publicly trumpeted the benefits of travelling by train - while clocking up ^1,400 in plane tickets for routes covered by his own franchise.

Peter Williams, commercial director of East Coast, boasted of the advantages of rail journeys in a marketing campaign earlier this year.

But figures showed that he took seven flights between Glasgow and London, even though the route is covered by his own network.

The details emerged after a Freedom of Information request ^ which also revealed thousands of pounds spending by East Coast^s directors on hotels and restaurants.

It is embarrassing for a company whose advertising, featuring impressionist Rory Bremner, highlights the benefits of travelling by rail and enjoying the scenery.

In a press release earlier this year, East Coast claimed it was ^winning the battle^ for custom against the airlines.

Mr Williams was quoted in the release saying: ^We are delighted that so many people are seeing the advantages of the train compared with the plane ^ including city centre to centre travel, the opportunity to work using Wi-Fi throughout the journey, and great value fares.^

But it has now emerged that he claimed for seven British Airways flights between London and Glasgow over a nine-month period last year, costing ^1,422.85.

Ian Mearns, the Labour MP^▸ (Member of Parliament) for Gateshead and member of the all-party parliamentary Rail in the North group, criticised the move. He said: ^The very least I would expect is that senior managers would use their own service. It^s free to them, they could go first class if they wanted to. It is important they can see the same service passengers get.

^I know that East Coast has been suffering from problems in punctuality and performance and that some of this is not their fault, when you look at cable thefts for example, but I would have much more confidence in the management to turn this around if they were not spending money like this.

^What does it say to the travelling public if train line directors are travelling with a rival rather than use their own service?^

A spokesman for East Coast said: ^The very occasional flights for Peter Williams were as a result of business needs requiring him to be in London late at the end of the week and him living in Scotland. As demonstrated by the frequency of such journeys, this is a very infrequent event.^

Expenses claims totalling ^27,845.71 were made by East Coast^s board of 12 directors over 22 months up to August this year, including ^16,045.06 on food, drink and entertainment.

Among the spending was a ^680.01 bill incurred by managing director Karen Boswell for two stays at London^s five-star Renaissance Chancery Court hotel.

Ms Boswell also spent nearly ^1,000 on three meals in the capital ^ two at the Michelin-starred L^Atelier de Joel and one at Smiths of Smithfield.

Other staff spent thousands on several visits to an Italian restaurant in York.

Directors also spent ^2,150.35 on taxis while top-ups for Oyster^▸ (Smartcard system used by passengers on Transport for London services) cards ^ used on public transport in London ^ came to just ^30.

A spokesman for the franchise said: "We consider the value of expenses incurred by the East Coast directors to be comparatively low - and that this demonstrates our commitment to protect the public purse."

Emma Boon, campaign manager at pressure group the Taxpayers' Alliance, called for the franchise to put back into private ownership. She said spending the sums in "bars and restaurants is a bad deal for taxpayers".

The East Coast main line reverted to state control in 2009 after former operator National Express backed out of a contract compelling it to pay ^1.4 billion to run the franchise.

But figures earlier this year showed that since then punctuality had declined alarmingly.

[Btline]

Don't blame him not wanting to travel from Glasgow to London via the ECML^▸ (East Coast Main Line)!

[JayMac]

Indeed.

Although, whilst he would probably have to pay for the privilege of travelling with Virgin on the WCML^▸ (West Coast Main Line), at least he would've got a better 1st Class service on a Virgin Pendolino versus an East Coast 91+MkIV.

That said, ^200 per trip on British Airways compares quite favourably with Virgin's 1st Anytime fare London<->Glasgow.

[grahame]

When I took a job that covered an area from Swindon to Penzance, I moved to Wiltshire.    Now - East Coast's HQ^▸ (Headquarters) is in York, I believe, and I would have hoped that employees and directors based there would have moved to be within a reasonable community distance ... with it being their choice of what is "reasonable" and them travelling to and from York at their own expense to get to and from work.  I'll give rail staff members the extra of being able to commute on the railway if it's part of their contract of employment - a sensible benefit in kind.

If a member of the East Coast team feels that somewhere near Glasgow is a suitable place to live for his job, that's fine by me.  Wherever he has business meetings, it's reasonable for him to have his travel between there and his office paid for / provided - if it's reasonable in all the circumstances for him to use his own rail company, or another, for these journeys then great.  If not, then another reasonable alternative is sensible.

But, surely, the payment for alternative means for an East Coast excutive to travel to his distant home should be his own responsibility, and not that of the shareholders of East Cost who are currently you and me.  If that executive is so good that it's worth paying him enough for his lifestyle, sure - but then the cost of his airline tickets should come from that pay if he's going to travel that way rather than on free rail passes via York.

Views expressed here are purely a personal opinion ...

[inspector_blakey]

I would agree - on the face of it I don't think it's really on for someone to be claiming expenses for travel to and from their workplace (and how many companies would permit this anyway? Almost none I suspect.)

Evidently on the occasions in question he was detained late in meetings in London, but frankly I'd have thought that this comes with the territory for a senior executive position.

[Chris from Nailsea]

From The Telegraph:

'Fat Cat' rail bosses' six-figure salaries revealed by FOI requests

Train company chiefs have been accused of ^fat cat^ behaviour after it was revealed they enjoy six figure salaries as passengers endure misery and ticket price hikes.

Even on the East Coast line, where services are being run in the public sector, as many as eight directors are on salaries of above ^100,000 a year, it has been revealed. The East Coast pay levels were obtained following a request under the Freedom of Information (FOI) Act.

All the other train operating companies were sent FOI requests asking how many of their directors were on six-figure salaries. But all said they were not obliged to reply as the act did not apply to them as they were private companies. In addition, only one company, CrossCountry, was prepared to offer any pay-level details on a non-FOI request basis.

The East Coast information supplied showed that one director ^ almost certainly managing director Karen Boswell ^ was on a salary of between ^161,000 and ^180,000. Two other East Coast directors' salaries came within the ^121,000 to ^140,000 band, while five other directors were on between ^100,000 and ^120,000 a year.

Matthew Sinclair, Chief Executive of the TaxPayers' Alliance, said: "It's astonishing that even now rail bosses continue to rake in such huge salaries funded by taxpayers. Given that commuters are consistently forced to endure delays and misery on the rail network, it's galling that the fat cats in charge are in line for bonuses for performance. With budgets tight the focus should be on improving infrastructure, not executive pay packets."

East Coast's parent company is Directly Operated Railways (DOR), which was set up in 2009 by the then transport secretary to manage any train company operations which return, temporarily, to the public sector. DOR took over East Coast in November 2009 when National Express pulled out of the franchise. Information obtained from DOR via the Department for Transport showed DOR chief executive Michael Holden's salary for the year ending March 2012 was ^156,100.

Information from CrossCountry covered the year 2011. It showed the highest paid director ^ almost certainly managing director Andy Cooper ^ was on ^222,000 including pension contributions. The company said it had 10 registered directors and their aggregate pay, including benefits, was ^795,000.

Pay level details are also available for rail infrastructure company Network Rail (NR^» (Network Rail - home page)), which is currently striving to meet punctuality targets on long-haul routes. In the last few days rail passengers have endured some miserable travelling conditions, with an overhead power line problem in Hertfordshire leading to severe delays on busy commuter routes.

NR's chief executive Sir David Higgins was on an annual basic salary of ^560,000 as of March 31 2012, while finance director Patrick Butcher was on ^382,000. NR's network operations chief Robin Gisby was on ^360,000, as was infrastructure director Simon Kirby. In addition to their salaries, the NR chiefs stand to be paid performance-related bonuses running into hundreds of thousands of pounds.

Transport for London's (TfL^» (Transport for London - about)) 2011/12 annual report showed that 30 of the bosses of the cross-London ^14.8 billion Crossrail project were on salaries of more than ^100,000. These included chief executive Andrew Wolstenholme, who was on ^380,000 when he started his present job in September 2011. Crossrail is a wholly-owned subsidiary of TfL.

The TfL report also reveals that in 2011/12, a total of 223 TfL staff were on salaries of more than ^100,000. These included London Mayor Boris Johnson's current aviation adviser Daniel Moylan who is a former TfL deputy chairman, a position that gave him a salary of ^112,599 in 2011/12.

Compared with train company boss pay levels, information is much more easily obtained for the bosses of rail-operating transport companies which are stock market-quoted. These also indicate generous salary-and-bonus regimes as well as handsome rail-business profits within an industry which still receives generous subsidies from the Government.

Transport company FirstGroup runs five UK^▸ (United Kingdom) rail companies ^ First Capital Connect, Great Western, Hull Trains, TransPennine Express and ScotRail. In the year ending March 2012, FirstGroup made an operating profit of ^110.5 million on its UK rail business, with its revenue being ^2.5 billion. Chief executive Tim O'Toole's basic salary for 2012 was ^846,000, plus a ^134,000 pension allowance and ^75,000 for what was described as benefits in kind. FirstGroup's commercial director Sidney Barrie, who resigned last March, was on a salary of ^349,000, while finance director Jeff Carr, who resigned in November 2011, had been on ^280,000.

Another giant transport company, National Express, runs the London to Tilbury and Southend rail line c2c and also operated, until last February, the East Anglia franchise. For the year 2011, National Express's revenue from its UK rail operations was ^688.3 million, while operating profit was ^43.4 million. The company's chief executive Dean Finch is on an annual salary of ^550,000, and it was announced in August 2012 that he had been awarded an extra performance-based bonus involving thousands of free shares. National Express group finance director Jez Maiden is on ^420,000 a year, with chairman John Devaney, who is about to stand down, on ^225,000.

Another rail industry parent company is the Go-Ahead Group which, with French company Keolis, owns rail operator Govia which runs the London Midland, Southern, Southeastern and Gatwick Express train companies. London Midland has been plagued with staff shortage problems in recent months and just before Christmas the Government announced the company would be offering a ^7 million compensation package including free travel days for season ticket holders. In the 12 months ending June 2012, Go-Ahead's rail operation revenue was ^1.73 billion and its operating profit was ^40 million. Group chief executive David Brown was on a salary of ^510,000, with finance director Keith Down on ^326,000.

Manuel Cortes, leader of the TSSA^» (Transport Salaried Staffs' Association - about) rail union, said: "One of the reasons we have the highest rail fares in Europe is because we have created an army of Fat Controllers since John Major sold off British Rail 20 years ago. Then we had one Fat Controller on a modest salary. Now we have dozens, some of whom are paid over ^1 million a year for running regional monopolies at the expense of both the passenger and the taxpayer. These people are laughing all the way to the bank while the rest of us fund their private gravy train."

Bob Crow, general secretary of transport union the RMT^▸ (National Union of Rail, Maritime & Transport Workers), said: "It's scandalous that the only train operator disclosing top bosses' salaries is the publicly-owned East Coast, while the private train companies hide behind a veil of secrecy as they bleed passengers dry. You can bet your boots that the reason they want to lurk in the shadows and hide behind the cloak of commercial confidentiality is because they are milking it and they know there would be a public outcry. Compare that to the cleaners on Arriva Trains Wales on basic minimum wage currently balloting for action for a fair deal. That's the shocking reality of the haves and have-nots on Britain's railways."

Anthony Smith, chief executive of rail customer watchdog Passenger Focus, said: "Our research shows that what is important to passengers is being able to rely on their service to get them in on time, and that their ticket is good value for money. Our national passenger survey clearly shows less than half of passengers are satisfied with the value for money of their train tickets."

[eightf48544]

There seems to be major disruption on the ECML^▸ (East Coast Main Line) at St Neots today 20th with the O/H down. All 4 lines blocked.

Lets hope the GWML^▸ (Great Western Main Line) is more robustly wired!

[IndustryInsider]

And when the wires do come down, a more robust service can be provided using IEP^▸ (Intercity Express Program / Project.) Bi-Mode, HSTs^▸ (High Speed Train) and Electric IEP's with their auxiliary diesel engine.

[Jason]

I read about it here:
http://www.bbc.co.uk/news/uk-england-london-21516102

[caliwag]

Ha...don't bank on it. The last train out of KGX to LDS is scheduled for a 125. It was cancelled and many were forced to spend the night on the station, only to be confronted with more problems this morning. Very poor do. That last train will not be busy, you'd think hotel accommodation would be the least they could do.
I was lucky, escaped on the 2100...could even have been that that pulled down all the wires!!