Wednesday, 19 January 2011

Today's franchises are a Curate's Egg - Official

So. Welcome to the new world of Franchising!

This from the DfT's Reforming Rail Franchising: Government response to consultation and policy statement, published today:

2.4 It was pointed out that the present arrangement of 7-10 year franchises has established a highly competitive market, delivering increasing financial returns to the Government.

3.2 The consultation acknowledged that the “Cap and Collar” mechanism used on many existing franchises has produced perverse outcomes, as well as significant financial liabilities for the Government.

Can both these statements be true?

UPDATE: This from Travelling_Wolf, via Twitter...


High returns are consistent with high liabilities.

Marsham Street rivals the Court of St James

This from The Marsham Street Observer...

Following Japan's heavyweight lobbying in favour of Hitachi, the reception area outside Petrol-head's Great Minster House office is increasingly resembling the Court of Tamerlane.

The place is awash with ministers, ambassadors and plenipotentiaries from France, Germany, Spain, China, and Korea all vying to lay their manufacturers plans for an HST successor before King Hammond.

Sadly though, of Brits not a sight was seen...

McNulty report deeply flawed - Official

Telegrammed by Ithuriel
Here is a table from the interim submission of Sir Roy McNulty's Rail Value for Money study.

Older readers who passed the 11 Plus and younger readers with an A* in Advanced Maths may care to check the right hand column.

Eye wonders whether it is safe to trust Sir Roy and his team with the industry's finances?

UPDATE: This from Martin...

It's more serious than you realise...

Never mind the fact that the percentages don't add up to 100 (which could be explained by a further, hidden category).

I'm more interested in the way that if you use the net cost of each category together with it's percentage to calculate the overall total, each category suggests wildly different figures...

UPDATE: This from The Economist...

It's not clear what the final column actually refers to.

I think it is saying that long distance franchises cover 75% of their costs and government covers the remaining 25% while for regional franchises they only cover 39% of their costs. - hence the col should not add up to 100%

It is certainly not the proportion of Govt spending that goes to each of the three groups.

UPDATE: This from The Archer...

What’s more worrying than the 105% total is that none of the figures in the final column bear any relation to the supposedly related figures in the £m column.

The 61% should for example read 56% so the ‘inescapable conclusion’ in paragraph 6.3.3 is not correct, although what the actual conclusion should be escapes me.