Cheap train fares axed as rail operator claims it will ease overcrowding

From: Daily Mail

Cheap train tickets are being scrapped just months ahead of inflation-busting price increases, a leaked memo has revealed.

One of Britain’s largest operators has stopped selling its lowest-priced fares for Friday afternoons and Sundays to prevent overcrowding.

This is despite the fact that cheap advance tickets are used by rail companies to justify large price increases for their more  flexible fare options.

The move comes after passengers were told they would face price rises of up to 13 per cent in the New Year, and nearly 30 per cent by 2015, leading to the £10,000 season ticket. The cheap fares cull at CrossCountry Trains was uncovered by ticketing expert Barry Doe of Rail magazine.

CrossCountry carries more than 31million passengers each year, with more than 60,000 of its journeys each week made using pre-booked tickets.

However, a memo to staff stated that there would be ‘no cheap advance fares anywhere on our network’ before 9.30am on Monday to Thursday, after 12pm on Friday or all day on Sunday, following feedback from conductors.

A spokesman said only the ‘cheapest’ advance tickets had been scrapped, but would not confirm how many had been withdrawn from sale.

‘We know these trains will be very busy,’ he said. ‘Why sell very cheap tickets on a train which is already full?’

The move means further misery for those seeking more affordable fares.

Mr Doe said: ‘People spend hours trawling  the internet looking for the best deal. As a passenger, you never know how many of the cheap tickets are available, or even if it’s zero.’

8800 extra spaces for busy trains on key routes

Source: Department for Transport

Space for up to an extra 8,800 rail passengers is being created on key commuter services in Birmingham, Bristol, Leeds, Manchester, Liverpool, Sheffield and Newcastle, Rail Minister Theresa Villiers announced today.

Under a deal funded by the Government, passengers on Northern Rail are to benefit from an extra 22 train carriages. Separate agreements also deliver an extra 6 carriages to First Great Western and an additional 4 carriages to London Midland.

Theresa Villiers said:

“I am delighted we have been able to finalise these important deals which will make a real difference to passengers. Even at a time when we are tackling the huge deficit we inherited, we are determined to invest in Britain’s future. That is why we’re committed to a major investment programme in our railways to deliver a big increase in capacity to ease crowding and provide commuters with more comfortable journeys.”

“Today’s good news has been made possible by our plans to introduce 2,700 new rail carriages on to the network by May 2019.

“We are also committed to the completion of the vital Crossrail and Thameslink projects in London and we are investing £900m in rail electrification. In the longer term our plans for a high speed rail network will free up a huge amount of space on our current network for more commuter trains – with some towns potentially seeing a near doubling of services.”

“As well as improving life for passengers, these rail improvements will play an important role in strengthening economic growth.”

The extra carriages, which will be in service from December 2011, are becoming available as a result of the planned deployment of 69 new train carriages which are being delivered to London Midland for use in the Birmingham area. This then allows for the carriages currently being used by London Midland to serve passengers using Northern Rail and First Great Western services. Consequently some First Great Western trains are to be released to serve Northern Rail passengers.

High-speed trains brought forward for Sandwich and Deal

The high-speed rail service connecting two Kent towns with London is to begin a month earlier than planned.

From 5 September, Southeastern trains will now stop at Sandwich and Deal before following the established route via Dover to St Pancras.

Kent County Council is supporting the £150,000 cost of the extra train services in an attempt to attract investment to the area.

Journey times are cut from two hours 15 minutes to 80 minutes.

The service was piloted last month during the 140th Open Golf Championship, which was held in Sandwich.

More than 37,000 passengers used the service to visit the four-day tournament at the Royal St George’s course.

Bombardier ‘had little chance’ on Thameslink because of contract terms

From: Daily Telegraph

Bombardier had virtually no chance of winning the controversial £1.5bn contract for Thameslink trains because of its relatively higher financing costs, senior Government sources have disclosed.

The Canadian train maker, which on Tuesday axed 1,400 jobs at its Derby plant, was at a competitive disadvantage worth hundreds of millions of pounds because of the way the previous Labour government structured the contract.

The tender called for bidders to build, maintain and, crucially, finance 1,200 new carriages over 30 years for the London commuter service.

Bombardier Class 377 EMU in service with Southern

The financing element gave Siemens of Germany a big advantage over the three other bidders because of its higher credit rating – one vastly superior to Bombardier’s, which is below investment grade.

Siemens’ debt is rated A+ by credit rating agency Standard & Poor’s – six notches above Bombardier’s BB+. The other two bidders, Alstom and Hitachi, are respectively rated BBB and BBB+.

Investment bankers familiar with deals similar to Thameslink trains said that each notch of difference equated to at least 0.25 of a percentage point on any debt-funded deal.

That would leave Bombardier having to pay extra interest of at least 1.5pc a year to finance the deal. Over a 30-year contract that could amount to £700m.

“The way the contract was structured, it wasn’t just about building the trains but financing them,” said the source. “On that basis it was very hard to compete with Siemens.”

A summary of the tender, dated April 2008, states: “The Department [for Transport] intends that the chosen bidder will be required to arrange the finance necessary for the acquisition and ownership of the rolling stock.”

That effectively turned the winning bidder into a rolling stock leasing company, where cost of finance is crucial.

Bombardier, which remains reserve bidder on the Thameslink contract, is yet to be told by the Government why it lost the bid. A company spokesman declined to comment.

So it seems that once again Labour have screwed up and the Conservatives are taking the blame.  There is no denial that the Labour Government set up the contracting process and it has been left for the Conservatives to deal with the mess.  How many more deals will go up in smoke due to this incompetence?  Only time will tell.