Centro Tendered Services

[MW]

Something I've never quite grasped is the bidding process. How exactly does it work.

Presumably Centro announces whats available, and then a company can say what it's interested in, but how does Centro choose. Is it simply literal and you say why you should operate it etc. or do you offer money for it. I wouldn't think the latter would apply, because Centro would then fork out funding for you to operate with.

Is this how it works, or is it different.

[4504]

Isnt tendering basically Centro announcing services that aren't busy st certain times and offering these time slots on the routes to other companies

Something I've never quite grasped is the bidding process. How exactly does it work.

Presumably Centro announces whats available, and then a company can say what it's interested in, but how does Centro choose. Is it simply literal and you say why you should operate it etc. or do you offer money for it. I wouldn't think the latter would apply, because Centro would then fork out funding for you to operate with.

Is this how it works, or is it different.

[Matt.N0056]

I may be wrong but don't the operators say how much they would like off Centro to operate the service, then Centro would choose which operator they would like to run the service - presumably the lowest 'bid'?

[richie]

Mainly they go off the lowest bid and what the opperator will offer ie low floor newish and such as NXWM been awarded the X96 on a sunday because they run the route in dudley so it was cut in two before.

[4504]

That sounds sensible. Maybe that's why NXWM never lose their high frequency services, because it must cost too much for other operators

I may be wrong but don't the operators say how much they would like off Centro to operate the service, then Centro would choose which operator they would like to run the service - presumably the lowest 'bid'?

[richie]

That sounds sensible. Maybe that's why NXWM never lose their high frequency services, because it must cost too much for other operators

I may be wrong but don't the operators say how much they would like off Centro to operate the service, then Centro would choose which operator they would like to run the service - presumably the lowest 'bid'?

Not all services gome up for tender only the services that opperate at a loss or the journeys that are seen as a must but arn't viable. Most of NXWM routes are opperated commercially so no tender is needed. or say the 244 service Dudley to Hasbury that is opperated commercially from Dudley to halesowen but Halesowen to Hasbury and return is tendered.

[Roy]

I'm sure somebody will come up with a more complete explanation than this, but the basic pronciple is as follows.

The bus operators operate commercial services - i.e. services that they decide will make a profit.  If a service is removed from the commercial network then Centro have to decide whether that service is socially necessary.  For instance, a route that goes through a housing estate a long distance from the nearest commercial route would be considered socially necessary and would be subsidised by Centro.  In addition, evening, Sunday and Bank Holiday services may be deemed non-commercial by the bus operators and subsidised by Centro.

Centro advertise the subsidised services and put them out for tender for a fixed length period (say 1, 2 or 5 years).  Companies then bid for each service by sepcifying how much subsidy they require from Centro to operate the service.  The lowest bidder normally wins the right to operate that service. 

As you know, Arriva took over operation of a number of Centro subsidised services today.  There are rumours that they undercut other operators such as Diamond by quite a considerable amount to gain a foothold in the Black Country area.   

[richie]

I'm sure somebody will come up with a more complete explanation than this, but the basic pronciple is as follows.

The bus operators operate commercial services - i.e. services that they decide will make a profit.  If a service is removed from the commercial network then Centro have to decide whether that service is socially necessary.  For instance, a route that goes through a housing estate a long distance from the nearest commercial route would be considered socially necessary and would be subsidised by Centro.  In addition, evening, Sunday and Bank Holiday services may be deemed non-commercial by the bus operators and subsidised by Centro.

Centro advertise the subsidised services and put them out for tender for a fixed length period (say 1, 2 or 5 years).  Companies then bid for each service by sepcifying how much subsidy they require from Centro to operate the service.  The lowest bidder normally wins the right to operate that service. 

As you know, Arriva took over operation of a number of Centro subsidised services today.  There are rumours that they undercut other operators such as Diamond by quite a considerable amount to gain a foothold in the Black Country area.   

That a perfect explanation.

[hartshill busman 724210]

This is my first post so here goes......
The post over tender criteria is correct,Centro will subsidise a route that is socially neccesary under certain conditions. On the tender document a contract of 157 weeks (3years) is usual.With the succesful Arriva bids not only were the prices very low but they offered 5 year deals(the longest that can be awarded on a tender)undercutting all the operators bidding on several fronts.The suggestion that they were to gain a foothold in the West Midlands at any price therefore seems logical.

[richie]

I will be surprised if Arriva will stake a serious foot hold in the blackcountry competition wars don't work between big operators neither of them win only passengers suffer from silly frequencys then to be slased when the other company is forced to recede plus NX won't let them they will either compete hard or sell up.

[Liberator9]

The S2 and S3 were tendered like this. I think it was a three year tender from June 2010, so could be up for renewal next year. Will Blue Diamond have to bid again if they want to continue (I rather they didn't, they're awful)?

[Stu]

The S2 and S3 got tendered because NXWM told Centro they couldn't operate them commercially. Ironically, NXWM then reintroduced the 30 as a commercial service between Acocks Green and Solihull, then gave that up a year later because they couldn't operate it commercially, so Centro and Central Connect (as they were then) stepped in and added it to the 'Solihull Signature' brand.

[MW]

I'd like to see AG operate them under contract next year. Would probably mean more Scanias annoyingly but it'd give them control in Solihull.

[Stu]

I very much doubt they will. They gave them up before because they weren't profitable. I doubt a Centro subsidy would change their minds!

[MW]

You never know lol, it'd be nice though wouldn't it.