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Post by snoggle on Mar 1, 2013 11:06:33 GMT
The Government has confirmed this morning that the Crossrail rolling stock will be publicly funded and not procured via a PFI or leasing arrangement. DfT announcement hereTfL Press release hereA revised ITT for the procurement will be issued shortly. |
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Ben
fotopic... whats that?
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Post by Ben on Mar 2, 2013 1:04:46 GMT
What a suprise. So TfL were correct to promote outright purchase then? Will TfL be the owners?
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DWS
every second count's
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Post by DWS on Mar 2, 2013 8:34:42 GMT
What a suprise. So TfL were correct to promote outright purchase then? Will TfL be the owners? If the trains are built and are in service for the opening date of Crossrail, the public will not give a fig who the owners are  |
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Deleted
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Post by Deleted on Mar 2, 2013 15:18:42 GMT
It doesn't really matter whether the trains are public or private, i.e. when you travel on the Northern Line, do you care whether those trains are privately leased Alsthom trains? - I bet not!
New Scotland Yard was actually privately owned, and rented by the Met Police, up until Autumn 2008, when the then Chancellor, Alastair Darling arranged for public finances to purchase the whole building, taking it into public ownership - not many people realised that!
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Ben
fotopic... whats that?
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Post by Ben on Mar 2, 2013 16:55:57 GMT
Well no it doesn't matter, not in a direct sense, but surely outright ownership has its distinct advantages for the opperator, not least lower financial costs over the medium term. The implication with leasing them is that there is a sufficiently competitive market. If the trains are designed to be bespoke for XR opperation then how is this possible? The only advantage this offers is the ability to keep capital costs off the books. And if we're still thinking that financial trickery is a good idea for public services then we've learn nothing from the past 30 years of banker dominance. Surely some of the more knowlegable members can provide a more learned response than I though? railtechnician, or tubeprune or @reganorak ... |
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Post by railtechnician on Mar 2, 2013 19:04:38 GMT
Well FWIW in my opinion it does matter who owns the rolling stock because it should be the taxpayer if the taxpayer bought it! On the other hand if the rolling stock is privately owned and maintained there must be some small profit for the owner but that should be on a diminishing sliding scale commensurate with the age of the rolling stock. Keeping UK companies in business between export orders is my idea of a profit for such enterprises.
The railways should be operated as non profit making public undertakings even if they are wholly or partly operated by privateers. There should be a limit on the profit to be made by private companies in any public undertaking. Anything made for the home market should be top quality and built to last but at little more than cost. British companies should have a duty to the taxpayer in that regard. Foreign companies based in the UK should be properly taxed to keep British manufacturers in business. Unfortunately allowing industry to be exported to the far east over the decades is a mistake that the taxpayer has already had decades to regret and that needs to be reversed.
Is there any decent British rolling stock manufacturer still in business? Perhaps it is time for investment in British manufacturing, this country used to make just about anything and everything and export it to the four corners of the world, now it relies upon bankers and stock market traders dealing in what really amounts to little more than Monopoly money. I think pretty much everything we need is imported these days and that is no good at all.
What we don't need are too many more incompetent politicians telling lies and cooking the books for political ends.
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Post by snoggle on Mar 3, 2013 12:59:23 GMT
It doesn't really matter whether the trains are public or private, i.e. when you travel on the Northern Line, do you care whether those trains are privately leased Alsthom trains? - I bet not! I agree that on the face of it the public do not care. However they do care if contracts don't work properly and trains are poorly maintained and unreliable. The Northern Line these days is reliable and effective and is a credit to joint working between Alstom, LU and Tube Lines. However it went through a terrible period of bad performance with lots of arguments and rows about who was responsible for what. I saw plenty of what went on courtesy of the attribution process. Passengers would also care if Crossrail had been built but the trains were not available in time. This decision gives the Crossrail project and later the concessionnaire a fighting chance of getting the rolling stock in due time to allow it to be bedded down and get reliability built up before full public service. We only have to look at the procurement nightmares of IEP and the Thameslink stock to see why this decision should keep things on track. Trying to seek private sector funding to support a PFI type deal in current conditions is clearly proving extremely difficult if the Siemens Thameslink deal is any indicator. It also costs a fortune for the advisors to pull these deals together and if timescales become extended, as with IEP and Thameslink, it becomes very hard to demonstrate value for money as costs mount up and up. The big problem that TfL / Crossrail face is how to deal with the clamour that the trains must be manufactured in the UK rather than be the best train at the best whole life cost. If Bombardier do not come out on top then there will be an almighty political row and demands for the procurement process to be restarted. That sort of problem could prove very risky to the project. |
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Post by grahamhewett on Mar 3, 2013 20:36:57 GMT
snoggle - having had the "pleasure" of advising the banks who were funding one of the TLK bidders, I have to say that the contracts proposed by DfT were of such a complexity that the advisers found extreme difficulty in understanding how risks were to be transferred between manufacturer, funders, and operators. The root of the problem seemed to be DfT's determination to (a) ensure that the manufactuers were fully loaded with any operating risk arising from poor manufacture/maintenance and (b) prevent any "pure" operating risks being laid against the manufacturer. Whatever the case, the contract structure certainly achieved neither of those probable objectives. It is noteworthy that the Siemens bid, which was due for financial close last summer is now forecast for close this summer. This will cause immense problems because the timetable for manufacturing the whole fleet and having enough time to test a reasonable quantity of the initial delivery in actual service, was already very very tight. What is not said about the XR contract is whether it includes maintenance (ie a wet lease) or not (a dry lease) or is something in between (a soggy lease in the jargon). It would be nice to think that the DfT had learned from the TLK contract debacle and were going for a dry lease but somehow I doubt it (and most manufacturers like soggy or wet leases because that's where they make their money these days; on the other hand Tfl may have prevailed and successfully secured a dry lease...) GH
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Post by snoggle on Mar 4, 2013 0:10:26 GMT
snoggle - having had the "pleasure" of advising the banks who were funding one of the TLK bidders, I have to say that the contracts proposed by DfT were of such a complexity that the advisers found extreme difficulty in understanding how risks were to be transferred between manufacturer, funders, and operators. The root of the problem seemed to be DfT's determination to (a) ensure that the manufactuers were fully loaded with any operating risk arising from poor manufacture/maintenance and (b) prevent any "pure" operating risks being laid against the manufacturer. Whatever the case, the contract structure certainly achieved neither of those probable objectives. It is noteworthy that the Siemens bid, which was due for financial close last summer is now forecast for close this summer. This will cause immense problems because the timetable for manufacturing the whole fleet and having enough time to test a reasonable quantity of the initial delivery in actual service, was already very very tight. What is not said about the XR contract is whether it includes maintenance (ie a wet lease) or not (a dry lease) or is something in between (a soggy lease in the jargon). It would be nice to think that the DfT had learned from the TLK contract debacle and were going for a dry lease but somehow I doubt it (and most manufacturers like soggy or wet leases because that's where they make their money these days; on the other hand Tfl may have prevailed and successfully secured a dry lease...) GH You have my sympathies for advising banks about the realities of how railways work! I am not the slightest bit surprised to hear about mind boggling contract complexity being proposed by the DfT in order to achieve some notion of "purity". I've been involved in the development and operation of two large PFIs and later inherited two smaller PFIs. All good fun! I am aware that the Thameslink debacle and problems in achieving commercial and financial close will almost certainly cause all sorts of nightmares for FCC, the Thameslink project team and, of course, other TOCs expecting a cascade of stock for newly electrified lines. It will be interesting to see what approach TfL take on maintenance. As you say the manufacturers like a "package deal" (wet or soggy!!) because of the money making potential if they've got their numbers right and can get costs low and availability high. |
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Deleted
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Post by Deleted on Mar 4, 2013 0:45:22 GMT
Foreign companies based in the UK should be properly taxed to keep British manufacturers in business. Unfortunately allowing industry to be exported to the far east over the decades is a mistake that the taxpayer has already had decades to regret and that needs to be reversed. It's refreshing to hear someone say that. I've said similar in the past, but never really got any constructive response. I remember British industry back in the 80s asking the government for help to stave off foreign competition. The reply was that the government had a non interventionalist policy. It's been sad to see the decline of this country ever since it has been run by accountants. |
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