LOGIC, LOGIC, LOGIC: THE FOLLY OF THE WESTERN RAIL FRANCHISE DEBACLE.

So, it seemed like quite a nice way to start with the logical song there.  A song that bemoans the replacement of wonder and magic with logic and science.  Personally I have places in my heart for both.  I love imagination and creativity with a passion.  Songwriting, music and art are strange processes, when you start them you have an idea of what you want something to turn out like, you create them, put pen to paper, note to notebar, brush to canvas or whatever and when you get to the end you may be more or less happy with what you’ve got but cannot remember anything of what it took to get you there with individual moments of inspiration being lost within the creative whole.  It truly feels like a magical process.

As for logic.  In “Star Trek VI: The Undiscovered Country” Mr Spock describes logic as the beginning of wisdom not the end, and I agree, it is a great place to start in things such as engineering and electrics and such, anything that requires a timed, precise, synchronous system.  Which is why you have to start with logic when awarding a rail franchise.

NOW

There have been many words written that besmirch "First"’s name.  Personally I could tell you just as many bad stories about Stagecoach, the joint partners with Virgin for their bid, so this post is not about that, it’s about the lack of logical reasoning in the arguments for the award.  When Branson argues that there are serious holes in the fundamental bidding process, he may be worryingly right.  But what does he mean by that?  Well let’s take a look at the winning bid, the presumptions within it and the wider economic picture as it currently stands.

Well the winning bid bought the operating rights for the west-coast main line with a staggering bid of five billion pounds, a sum so eye-watering that rather than have the market jumping with delight had them quickly seeking their delete button as the share price tumbled upon them winning this prestigious government contract ...This is telling, but why, well, upon winning the contract First made a number of announcements seemingly to placate worried customers that this change would lead to more seats and lower prices and that the maths of this was based on them making a profit because upon them being awarded the franchise the passenger numbers would increase by ten per cent each year.

Hmmmm.

There are a number of problems with these arguments as I see them, firstly let’s have a look at the lower fares thing.  It was only on the fourteenth of August that we were told by both the rail industry and the Government that the burden of rail travel would fall less on taxpayers and more on commuters (Unless you are like most people a taxpaying commuter of course) with above inflation price increases for either the forseeable future or for years to come depending on which report you read, this in the face of wages either not increasing in-line with inflation and increased living costs on all other fronts.  So the idea that this will lead to any kind of price-cut in the next few years is frankily laughable which brings us to the next issue raised in the winning bids comments, more seats.

Now I wonder about this one because again, when we approach this logically as a businessman one would have to think, why would they?  One of the other companies who also operate on the North-West line is of course Northern-rail who offer this picturesque view of  rail travel.  

I imagine they decided to show the outside of the train as currently the interiors are looking like those Japanese trains where the guards have to physically push people onto the train and squash them on board.  Here is a typical picture of a rush-hour image from a Northern-rail train.  

For many people this is the reality of train travel, a no-seat, uncomfy journey into misery BUT presumably, in spite of this atrocious service Northern-rail, and maybe even because of it, do post a profit BUT if they did provide extra seats then likewise they would probably make less money and if there’s one thing private companies are as good as the public sector on, it’s under-estimating cost, dramatically (G4S underestimated the cost of  admin and uniforms on their bid to provide guards for the Olympics by 90 million pounds or nine hundred percent).

But finally let’s get to the guts of it, the extra passengers.  IN order that the service deliver the money promised then revenues on the railways would have to see passenger numbers increase by 10% year on year.  If this is 10% onto the 10% then this would effectively mean that passenger numbers would double in less than 8 years.  Let’s think about that for a minute shall we.   At a time when train fares are increasing at more than the rate of inflation and people have less money than ever, jobless numbers among the young soaring,  their parents cutting back all the time to keep up with living costs and the elderly having their old person’s allowances phased out this means that the chances of passengers increasing are probably as likely as a heatwave in December.  people do not want to spend money if they can avoid it and with the costs going though the roof, the railways are increasingly becoming a rich-man's toy.

This is the reason we are seeing so many long established companies falter and fail, because their entire sales projection teams are, in reality offering little more than guesses based seemingly on over-optimistic appraisal over who has money to spare and the appeal of their product.  If it's not food, heating, clothing or fuel everyone is trying to find ways to cut-back.  Not spend more. 

The markets think it cannot be done, the increasing costs of extra seats, carriages and services will probably show it can’t be done and in all likelihood the logic of the ever-faltering economy says it can’t be done thinking logically, but although the beginning of wisdom is logic it is still a step that some people are unwilling to make.

I’ve been Mister Chatable.  Thanks for listening.

PS - One more amendment.  Yesterday First's group Tim O Toole (Yes, just like Timmy O Toole from "The Simpson's") was speaking to the Commons select group on transport and gave this worrying statement...

Fare increases would "broadly follow inflation" if passenger numbers grew at the expected rate, added Mr O'Toole, but he could offer no commitment that fares would not increase at a higher rate than that if these projections proved wrong.

The promise of lower fare's all based on numbers doubling over 8 years with little chance of that occurring with the economy flat-lining.  I do so get tired of these peole.

http://images2.wikia.nocookie.net/__cb20070802000213/memoryalpha/en/images/2/27/Spock,_2267.jpg
http://images2.wikia.nocookie.net/__cb20070802000213/memoryalpha/en/images/2/27/Spock,_2267.jpg