“The Class 455/456 fleet is nearing completion of a major technical upgrade - millions of pounds spent on trains that in all likelihood will go for scrap in no more than three years’ time.”
“We have reached a situation whereby a brand new train can be bought more cheaply than a train sitting (right now) half-finished on a production line.”
STAGECOACH had expected to win. Instead it is losing its flagship franchise - a £1 billion, 230 million passengers-a-year business which has turned in steady profits throughout its 21-year tenure.
First MTR offers a comprehensive overhaul of what is already regarded as a pretty slick operation. But it felt like South West Trains was suffering from ‘incumbent’s disease’ - a creeping complacency that had a slight end-of-franchise air about it. The trains are not quite as clean as they were. The seat covers are worn, the train announcements are formulaic, and the customer service is a little lacking in sparkle. Perhaps it is time for a change.
FirstGroup was joined by MTR partway through the bidding process. They combined to blend their long-distance and urban metro expertise. This was First’s’ third attempt at grabbing South West Trains from the clutches of Stagecoach, and MTR’s second.
The new offer is bold, to say the least. And controversial. How do you shave 11 minutes off the journey time from Salisbury to Waterloo, without changing the ageing 90mph diesel rolling stock? Certainly, you can tighten the relaxed timetable between Clapham Junction and Waterloo, but the slack is there for a reason - this is the UK’s busiest railway, running 27 trains an hour on the South Western Main Line in the peak.
It’s a bit like Heathrow Airport - running hot and so close to maximum capacity that even a small delay can cripple services for hours. Taking away the room for recovery means relying on perfect performance all the time - a single speed restriction, or even loading slow-moving passengers with extra luggage, can knock the performance.
Transport Focus says passengers value predictability of arrival time more highly than they value the speed of the journey. Better to take a few minutes longer than to arrive a few minutes late.
The other way to save those extra minutes is to skip a few intermediate stops. But to shave eight minutes off the headline Southampton to London time, passing through Winchester, Farnborough or Woking, is unlikely to go down well.
First claims faster acceleration and cracking down on dwell times will play a part. Good luck with that on a rush hour Class 450 with standing room only from Basingstoke inwards!
The new operator has announced a fleet of 90 new suburban trains, with the aim of a single homogenous fleet across the Reading and Windsor lines and the suburban metro network. This will reduce maintenance complexity, improve efficiency, control costs and make it easier for train crews to work across different routes.
But look at the trains that will be displaced. First MTR will buy new trains to replace rolling stock that is so new it hasn’t even entered service yet.
From 2019 it will reject a £210 million fleet of 30 12-car Siemens Class 707s that will only carry passengers for the first time next month. The trains are so new that some are still on the factory production line at Krefeld in Germany, or racking up miles on the Wildenrath test track.
At the behest of the Department for Transport, SWT procured these trains specifically to ease overcrowding on the Windsor lines, in the full knowledge that they would appear only in the final weeks of the franchise. Just three weeks ago, Secretary of State for Transport Chris Grayling was taken for a ride on a test train. Did he already know?
Angel Trains, the rolling stock leasing company (ROSCO) that has funded this fleet of trains with an operating life of 35 years, now faces the prospect of stacking them up in sidings after only two years of work.
This will send shock waves through the industry. The price of new trains has tumbled in the three years since the ‘707s’ were ordered - mainly because the cost of borrowing money has tumbled, but also because new manufacturers have entered a competitive market, pushing down prices. The established factories have covered their design costs on existing orders, and production lines are all in place. So for Siemens, Hitachi and Bombardier, follow-on orders for proven models can be taken more cheaply.
But we have reached a situation whereby a brand new train can be bought more cheaply even than a similar train sitting (right now) halffinished on a production line.
A ROSCO source said: “Right now there are no takers for the ‘707s’. They are destined to sit in sidings. They will look for other uses, but the trains are designed for high-density, short-distance third rail metro. They could invest to get them under 25kV overhead electric infrastructure. Siemens built that capability into the trains, but it’s not as simple as it sounds and it comes at a price.”
The first two ‘707s’ were actually fitted with pantographs for testing. But if new trains are cheaper, the lease price is likely to drop significantly.
And there’s more. First MTR will not confirm this, but it appears to have no use for the Reading line Class 458s that were refurbished only last year and extended from eight-car to ten-car trains. A ROSCO source suggests there are no likely takers for these 16-yearold trains.
The Class 455/456 fleet also appears unwanted. These are nearing completion of a major technical upgrade, with new traction motors - millions of pounds spent on trains that in all likelihood will go for scrap in no more than three years’ time.
Another ROSCO source said: “Cheap trains, cheap finance, lots of stock equals a very cheap leasing rate. It’s a bubble that is waiting to burst.
“This is classic short termism from the DfT. Bidders have dangled some shiny new trains in front of them, and they reached out of the pram to grab them without a thought for the consequences.
“The Class 455s were being retractioned partly to make more space in the Wimbledon depot for the new Class 707s. Now those are being displaced before they are even ready. The whole thing is completely dysfunctional. Spending huge amounts of money on trains that won’t be used is not in the wider interests of the railway. It’s wasted money, whoever has to pick up the tab.
“ROSCOs take these contracts in good faith. If they take a risk based on the expectation of a long-term commitment, then find the commitment lasts only two or three years, then next time around they will price the risk accordingly. Rates will rise again.”
“It does seem bonkers,” said a SWT manager. “We’ve worked on this upgrade project for four years to make the trains fit for years and years to come. For what?”
Transport Focus Chief Executive Anthony Smith is sceptical: “The nature of the lease market is all about risk. The Class 455s were picked up from British Rail cheaply. The lease charges will have exceeded what the ROSCO paid for them several times over by now. Although new stock will have a greater risk factor added to its price, the shorter the lease the more expensive it will be.
“I’m not that comfortable with the idea of holding back new trains until the old ones are worn out, to save wasting money. Class
455s are 25-30 years old and I don’t want to wait until they are 40 before replacing them.
“The point about the new Class 707s is fairer. The lease deal runs out in March 2019 - this is very short. But the DfT makes clear it expects the market to bear the risks. Angel Trains will have gone into the deal with its eyes open. In reality it will have to work hard to get Southeastern or Govia Thameslink Railway interested, but they both have old-ish suburban stock that could be replaced.”
However, with new trains destined for East Anglia as well, the market for second-hand cascaded electric multiple units will soon be flooded. And with cheap money financing cheap new trains, many mid-life vehicles are likely to end up on the scrapheap.
How will that look to passengers in the North, Wales or the South West, using worn-out trains that are long overdue for replacement? They’re unlikely to be impressed by the new SWT rejecting trains that are so new they have yet to even enter service?
Yet at the same time, First MTR is bringing back the ‘Plastic Pigs’ - Class 442 Wessex Electrics from Derby that SWT replaced with Siemens Desiros 15 years ago. No longer used by Gatwick Express, these 1980s trains designed for the South West Main Line will be brought back from storage and dusted down for Portsmouth duties.
FirstGroup Chief Executive Tim O’Toole says they will be “as new”, and claims that passengers will be unable to tell the difference between a 1980s British Rail train and a brand new one. That is a bold promise. But they remain quiet and comfortable EMUs - Portsmouth commuters will welcome them back in place of cramped and unloved Class 450s with 3+2 seating that is barely suitable for such a long journey.
First MTR will take 18 of the 24 five-car sets available, which raises a big question mark over the application by Alliance Rail to use the same fleet for an open access service between Southampton and Waterloo from December.
Alliance wants to run seven off-peak services each weekday with a higher standard of comfort
While trains not yet delivered are to be replaced by First MTR, there is no mention of any replacements for the now 25-year-old Class 158/159s on the Waterloo to Exeter services. On March 28, an Up Weymouth-London Waterloo express passes a ‘159’ on a Waterloo-Salisbury service just outside Basingstoke.