On Sat, 18 Jul 2009 00:53:10 -0700 (PDT), Mizter T
wrote:
On Jul 17, 3:19*pm, Roland Perry wrote:

In message , at 15:14:11 on
Fri, 17 Jul 2009, Recliner remarked:

but I wonder what the exact mechanism for the transfer will be? *Will
the new DfT ECML operating company simply take over NXEC, complete
with all its staff, leases, assets, contracts, etc, or will there be
some messy transfer of all of these to the new company?

It seemed to work OK when GNER handed back the keys.

That was different -- I think GNER ran it for a while under a management
contract before NX won the new franchise.

So you don't think the DfT will contract NXEC to run it for a while?
Maybe not, as they seem to have a new trading vehicle ready to go.

No. I think that's the whole point - NXEC seemingly offered to do just
that (i.e. run teh service under a management contract), and it
appears likely that that was the quid-pro-quo in return for NXEC's
offer of a £100 million payment to the DfT to settle things and
terminate the franchise 'cleanly'. But Adonis wasn't having that, of
course.

The very fact that NXEC signalled its intention to default to the DfT
(unless trading conditions radically improve) has meant that the DfT
can prepare specific arrangements for an 'operator-in-waiting' (led by
Elaine Holt), ready to take over ICEC services when NXEC eventually
goes kaput after its long and drawn out death. The fact that whilst
this is going on, NXEC are meanwhile coming out with proclamations
implying that everything is hunky dory is simply utterly disingenuous
of them.


I wonder whether the negotiated settlement that included the payment
of £100 million from NXEC would not have been the best (or, more
accurately, least worst) option for all concerned. Especially given
that NXEC had negotiated the deal with the Department in good faith,
and it only needed both sides to sign up.

Adonis seems to have gone out on a limb here. His officials had done
everything to secure what they considered a good deal for the
taxpayer, and certainly not behind the unelected Baron's back, but he
decided to renege on the deal - or rather not implement it.

It seems to me that there are two possible reasons for the unelected
Baron's conduct; first, that he wanted to discourage other TOCs from
trying to negotiate similar deals, to the detriment of the franchising
system as a whole, and second, that he wanted to at least threaten NX
very publicly with the loss of their other two franchises, to show
that he was being tough. But what's the point?

The whole system of franchising is so widely and deeply discredited,
and it would be a very good thing for the country if it was replaced
with a much simpler and more integrated system. However, that isn't
going to happen under Labour, so I think Adonis should instead have
taken a more pragmatic approach and found ways to make the system work
less badly.

The already agreed deal with NXEC, negotiated with his full knowledge
and approval up to the point he decided not to sign, should have gone
ahead. The Department should then have been slightly more receptive
to deals with those other TOCs who are in trouble because of the
severity of the recession, even to the point of seeing several of them
switch to GNER-style management contracts.

This sorry saga calls into question the ability of the unelected Baron
to do his job. Decisions of this magnitude need rather more careful
consideration than he seems capable of giving.

His track record isn't great, either. When the buzz of publicity that
surrounded the launch of the government's City Academy scheme died
down, and the actual performance of the Academies was evaluated, it
became clear that rather than being a solution to a problem, they
simply created their own new problems while solving nothing at all.

The form of contracts used to create the Academies was demonstrably
not fit for purpose, and will cause massive long term problems that
are not so dissimilar to those caused by the equally unfit rail
franchise agreements and the appalling PFI deals in the NHS.

It all points to someone who has some good ideas, even flashes of
brilliance, but is possibly not someone who can be relied on to make
the right medium- and long-term decisions.