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Recommended service - hourly, according to the GWRUS. Let's work towards that service and towards ensuring all services are used.
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Author Topic: A new operator - improved business case  (Read 2427 times)
Graham Ellis
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A new operator - improved business case
« on: July 30, 2006, 06:59:28 PM »

I posted up in the middle of last week the case for an "Open Access" Operator to provide services on the line - there's a press release and a detaile case too that's gone out as appropriate.   Some specific commercial information as it relates to possibiities for individual operators is omitted from the case on the site, of course, but even so it looks good.

I caused quite a stir - didn't I just!  Both on the forum and by email, I received both words of support and some constructive criticism too.   I was particularly delighted with these, as they gave me a chance to review the proposal against quite a tough questioning line,  and see how it stands up, and it stands up very well

On the issue of freight train paths, critics suggest there's not going to be a problem ... so I've offered a solution that's not necessary.   Fine by me - I'm a careful so-and-so, and I would much rather have al lmy ducks in a line than being bit in the bum later on.

On the issue of required equipment, the point was made that a second train would be a prudent provision to cover maintainance and failure of a single unit.  Maybe ... it depends on who the operator is, and thus whether or not the train nomally running the service is part of a fleet that run other services from the same depot and could provide cover if necessary. My original costing took that as being the case (for example, if First ran the service after all), but I have now modified the case - which you can read at http://www.savethetrain.org.uk/open.html to show a most expensive scenario - if it's taken up by an operator with no other presence nearby.  Again, the prognosis for a forward looking operator is excellent; still in profit by year 2, more that adequate income to fund a longer train as that becomes needed in year 4 ...

On the overall cots, there's a critic or two who quotes a much higher bottom line that I have come up with - around a million pounds v my 737k.  However, none of the critics has told me where my figures are low or what I've missed out, even though I have asked, and I gather they're quoting an average cost for running a train set for a year rather than the sepecifics of our line which som ein a bit cheaper.   On the other hand, I've been quoted some more train hire costs which suggest to me that we could even make a saving.

Finally, on Friday came the publication of the truely dreadful final FGW timings from December.  We've really been kicked in the face - not only 60% of trains withdrawn but the remaining two shifted to very unattractive times.  "Unmarketable" I think was one of the printable comments. But is does mean that the way is clear for A.N. Other to operate the optimum 8 per day service and know that he WILL pick up the peak traffic too ... as the optimum service specified carefully caters for it. Perhaps every cloud has a silver lining.

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aik4on
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Re: A new operator - improved business case
« Reply #1 on: July 31, 2006, 10:43:19 AM »

To confirm, my 'bottom line' does not differ greatly from yours.  It just adds another £150k to £200k to lease an additional 153 unit and this is something you have now done in the revised business case.

Another key to whether or not this service would be financially viable is working out the amount of ORCATS revenue the open access operator would receive on this route because the vast majority of revenue would come through this route rather than directly. I'm afraid this is an area where I have no figures available but, obviously, FGW would have them.  It may be that if this figure was high enough, FGW would flinch at the prospect of another operator 'raiding' its ORCATS revenue and this might be enough to make them look again at strengthening the service.  Although on a much larger scale, this really is what has scared GNER about Grand Central's challenge to them.

In all of this, the most logical, sensible and cost-effective solution would be for FGW to continue to run the service or for SWT to step in.  I've mentioned before that I feel the only way that this will come about is through public subsidy or a joint venture with another business/businesses (as has happened with the Banbury to Oxford summer Sunday services). 

No-one seems interested in lobbying Wiltshire County Council to see if they would chip in as a public gesture showing its commitment to public transport?  Is it not worth a try?







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Graham Ellis
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Re: A new operator - improved business case
« Reply #2 on: July 31, 2006, 11:13:02 AM »

To confirm, my 'bottom line' does not differ greatly from yours.  It just adds another £150k to £200k to lease an additional 153 unit and this is something you have now done in the revised business case.

Another key to whether or not this service would be financially viable is working out the amount of ORCATS revenue the open access operator would receive on this route because the vast majority of revenue would come through this route rather than directly. I'm afraid this is an area where I have no figures available but, obviously, FGW would have them.  It may be that if this figure was high enough, FGW would flinch at the prospect of another operator 'raiding' its ORCATS revenue and this might be enough to make them look again at strengthening the service.  Although on a much larger scale, this really is what has scared GNER about Grand Central's challenge to them.

In all of this, the most logical, sensible and cost-effective solution would be for FGW to continue to run the service or for SWT to step in.  I've mentioned before that I feel the only way that this will come about is through public subsidy or a joint venture with another business/businesses (as has happened with the Banbury to Oxford summer Sunday services). 

No-one seems interested in lobbying Wiltshire County Council to see if they would chip in as a public gesture showing its commitment to public transport?  Is it not worth a try?

Yes, understand the ORCATS issue (but I fear another FAQ might be useful for newcomers) .... basically, ORCATS is a system that splits revenue across the various operators on routes where there's not a monopoly, based on a formula that was originally designed to be a fair as possible, but is questionable in how fair it really is.  I understand that only 40% of calculated revenue from our segment actually went to Wessex trains in the past, with the rest going to First.  Perhaps that's why some of the subsidy figures that I've seen quoted were so high.

I would be delighted if people continued to lobby Wilts County Council - I've certainly posted their addresses / contact points here and I've got to know some of the people (elected and official) there quite well.  Please don't assume that all lobbying / contacts are reported here ... it would make for some mighty repetitive reading at times, and it could discourage progess if prople felt that negotiations / discusssions were being held in public.

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Lee
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Re: A new operator - improved business case
« Reply #3 on: July 31, 2006, 01:21:19 PM »

Although on a much larger scale, this really is what has scared GNER about Grand Central's challenge to them.

Here is an interesting article related to this (link below.)
http://www.rmtbristolrail.org.uk/archives/00002098.shtml
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