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Business & Finance1 min ago
London To Edinburgh Train Line
They 'overbid' and are set to loose £200m and end their contract early.
I am the first to admit I don't know how these contracts work but if you loose £200m surely the system is working at a huge loss (obviously lol) and so how could anyone, government or private business, make money from it? How does it even cover costs as a not for profit endeavour as Corbyn wants.
I can't see how it works.
I am the first to admit I don't know how these contracts work but if you loose £200m surely the system is working at a huge loss (obviously lol) and so how could anyone, government or private business, make money from it? How does it even cover costs as a not for profit endeavour as Corbyn wants.
I can't see how it works.
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Cassa....it does make sense. Stagecoach and Virgin have been taking huge profits out of the railways, in order to give away to their shareholders. The do that despite that the fact that the railway is being run on a loss basis.
At the same time, £billions of public money has been given to the company, which they promptly give straight to their shareholders.
And when there is no more money left to waste, they can just give the franchise back to the Government and walk away.
Is it any wonder that private companies fought tooth and nail to these franchises in the first place ?
Its what private companies do....they don't make the trains run on time....they make profits instead.
At the same time, £billions of public money has been given to the company, which they promptly give straight to their shareholders.
And when there is no more money left to waste, they can just give the franchise back to the Government and walk away.
Is it any wonder that private companies fought tooth and nail to these franchises in the first place ?
Its what private companies do....they don't make the trains run on time....they make profits instead.
So the £200m loss was because of shareholder payments?
Where I agree that no shareholder dividends should be paid if there is no profit, and clearly with that much of a loss there wasn't one, would all that have shorn up the business?
I would also point out that (this case not withstanding) dividends are often the lifeline for many pensioners and pension companies. As long as a company if in PROFIT after all costs (including maintenance and upgrades etc) I really don't have a problem with share dividends.
Public ownership ran everything it touched into the ground as well Mikey. The unions got their hands on it. So unless your fantasy world is going to be different to reality I doubt very much that public ownership will be any different now, perhaps specially so with the dogma doing the rounds with Labour, the unions and Momentum.
Governments of any hue couldn't organise a piddle up in a brewery without it costing ten times as much for half the beer so why you should think it could run nre-nationalised companies is anyone guess.
Where I agree that no shareholder dividends should be paid if there is no profit, and clearly with that much of a loss there wasn't one, would all that have shorn up the business?
I would also point out that (this case not withstanding) dividends are often the lifeline for many pensioners and pension companies. As long as a company if in PROFIT after all costs (including maintenance and upgrades etc) I really don't have a problem with share dividends.
Public ownership ran everything it touched into the ground as well Mikey. The unions got their hands on it. So unless your fantasy world is going to be different to reality I doubt very much that public ownership will be any different now, perhaps specially so with the dogma doing the rounds with Labour, the unions and Momentum.
Governments of any hue couldn't organise a piddle up in a brewery without it costing ten times as much for half the beer so why you should think it could run nre-nationalised companies is anyone guess.
" Rail unions have historically opposed privatisation, but former Associated Society of Locomotive Engineers and Firemen general secretary Lew Adams moved to work for Virgin Trains, and said on a 2004 radio phone-in programme: "All the time it was in the public sector, all we got were cuts, cuts, cuts. And today there are more members in the trade union, more train drivers, and more trains running. The reality is that it worked, we’ve protected jobs, and we got more jobs."[45][46].
Wikipedia.
Even a trade union general secretary admitted the public ownership of the railways was a mistake.
Wikipedia.
Even a trade union general secretary admitted the public ownership of the railways was a mistake.
Your last comments would appear to apply just as aptly to Stagecoach, as it applies to public ownership.
Vast swathes of our railway have in effect to nationalised, due to the ineptitude of the private sector, as in the case of Railtrack, which got itself in so much mess, that it had to rescued by the tax-payer and is now known as Network Rail.
My point is that our Government has no option but to stand patiently behind all these greedy private companies, ready to rescue our national transport structure when they fail.
So, in the final analysis, the railways always end up in public hands again, because the alternative of having no railways can't be allowed to happen.
This is what Grayling had to say in the Commons ::::
"But on Monday Mr Grayling told the House of Commons the situation was now "much more urgent" and that new arrangements were needed "in the very near future".
He went on to say :::
"He was considering two approaches.
One option was to allow Stagecoach to continue operating the franchise on a short-term and not-for-profit basis until a new contract is awarded in 2020.
Alternatively, East Coast Mainline could be brought back under government control and be run by the Department for Transport through an operator of last resort.
Mr Grayling said: "The problem is that Stagecoach got its numbers wrong. It overbid and is now paying a price."
So, the tax-payer coming to the rescue, yet again, when the private sector has cocked things up on a grand scale.
Vast swathes of our railway have in effect to nationalised, due to the ineptitude of the private sector, as in the case of Railtrack, which got itself in so much mess, that it had to rescued by the tax-payer and is now known as Network Rail.
My point is that our Government has no option but to stand patiently behind all these greedy private companies, ready to rescue our national transport structure when they fail.
So, in the final analysis, the railways always end up in public hands again, because the alternative of having no railways can't be allowed to happen.
This is what Grayling had to say in the Commons ::::
"But on Monday Mr Grayling told the House of Commons the situation was now "much more urgent" and that new arrangements were needed "in the very near future".
He went on to say :::
"He was considering two approaches.
One option was to allow Stagecoach to continue operating the franchise on a short-term and not-for-profit basis until a new contract is awarded in 2020.
Alternatively, East Coast Mainline could be brought back under government control and be run by the Department for Transport through an operator of last resort.
Mr Grayling said: "The problem is that Stagecoach got its numbers wrong. It overbid and is now paying a price."
So, the tax-payer coming to the rescue, yet again, when the private sector has cocked things up on a grand scale.
However, the Transport Secretary defended the continued franchising of Britain's railways to private companies and stressed "the taxpayer has still profited financially" from the East Coast deal, with nearly £1bn returning to the public purse.
"Passenger satisfaction is high and preparations are well under way to deliver state-of-the-art new trains on the route," he said.
"The problem is that Stagecoach got its numbers wrong. It overbid and is now paying a price."
Mr Grayling also insisted "there is no question of anyone receiving a bailout" and Stagecoach would be "held to all of its contractual obligations in full".
"Passenger satisfaction is high and preparations are well under way to deliver state-of-the-art new trains on the route," he said.
"The problem is that Stagecoach got its numbers wrong. It overbid and is now paying a price."
Mr Grayling also insisted "there is no question of anyone receiving a bailout" and Stagecoach would be "held to all of its contractual obligations in full".
Perhaps the railways should be run by a charity. This scam seems to have no problem stockpiling £billions.
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//So, the tax-payer coming to the rescue, yet again, when the private sector has cocked things up on a grand scale.//
No, try reading the article then go and learn about contracts.
The people who will have lost is the shareholders, probably you and I by proxy since many pension funds will have invested I suspect. But as tax payers you wont be stumping up anything more than the cost of redrawing the contracts.
Bringing rail under Government control is tempting. However the past has shown that if Unions and Government Management are involved it just does not work.
The big problem is that rail is an expensive form of transport so we have to decide on whether it is part of the National infrastructure and subsidised or we let the price rise to match the cost in which case many will be priced out.
No, try reading the article then go and learn about contracts.
The people who will have lost is the shareholders, probably you and I by proxy since many pension funds will have invested I suspect. But as tax payers you wont be stumping up anything more than the cost of redrawing the contracts.
Bringing rail under Government control is tempting. However the past has shown that if Unions and Government Management are involved it just does not work.
The big problem is that rail is an expensive form of transport so we have to decide on whether it is part of the National infrastructure and subsidised or we let the price rise to match the cost in which case many will be priced out.
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