£81 Million Investment in West Midlands Bus Network

[Liverpool Street]

Without being too much of a cynic, it is all very good PR. However the "300" new buses surely would have been part of a business plan for a long time anyway, because let's face it compared to other area's the fleet isn't exactly top nouch is it. (However I accept there is worse).

PR that's what its all about..... to date generally NX now buy 120/130 new buses per year, the revised capital expenditure levels have only come about since Dean Finch came on board at NX group & in conjunction with the Centro quality partnerships. Once these 300 enter the fleet, depending on how many of this years outstanding orders are/aren't included in that total.  NX have had 339 new buses delivered to date inc Dundee (up to NXC 2177 & NXWM 4913), with another 300 due by mid 2015, that will be be circa 640 new buses delivered in the 4 year period since 2011 which will see nearly 40% of the NX UK bus fleet replaced which I think is pretty good going......

What I don't understand is why Centro are including NX's already planned fleet replacement in this announcement. Centro have nothing to do with a private bus operator purchasing new vehicles, unless of course they are finding some weird and wonderful way to help fund it which I'm pretty sure they shouldn't be!

Andy, as I see it its all a bit interlinked, NXWM don't want Centro to ever consider introducing quality contracts as it could damage NXWM's position/dominance in the West Midlands, so they pushed to go down the Quality Partnership route instead. As as result of that threat & a change in senior management within NX Group, it is due to those reasons that capital investment levels in new buses at NXWM have been raised, the existing fleet is also been re-freshed and they are trying to improve the quality of the service/vehicle presentation offered. This in turn keeps Centro on side, NX UK bus performance should be improved along with passenger growth, ultimately producing more profits for group and shareholders, ultimately everyone should benefit.

Except for the drivers. Even this sticks to high heaven to get one over the drivers.

Why is there a camera pointing at the cab in these E200/B7RLE/E400's? Level 2 will be easy to resolve ffs.

[winston]

Without being too much of a cynic, it is all very good PR. However the "300" new buses surely would have been part of a business plan for a long time anyway, because let's face it compared to other area's the fleet isn't exactly top nouch is it. (However I accept there is worse).

PR that's what its all about..... to date generally NX now buy 120/130 new buses per year, the revised capital expenditure levels have only come about since Dean Finch came on board at NX group & in conjunction with the Centro quality partnerships. Once these 300 enter the fleet, depending on how many of this years outstanding orders are/aren't included in that total.  NX have had 339 new buses delivered to date inc Dundee (up to NXC 2177 & NXWM 4913), with another 300 due by mid 2015, that will be be circa 640 new buses delivered in the 4 year period since 2011 which will see nearly 40% of the NX UK bus fleet replaced which I think is pretty good going......

What I don't understand is why Centro are including NX's already planned fleet replacement in this announcement. Centro have nothing to do with a private bus operator purchasing new vehicles, unless of course they are finding some weird and wonderful way to help fund it which I'm pretty sure they shouldn't be!

Andy, as I see it its all a bit interlinked, NXWM don't want Centro to ever consider introducing quality contracts as it could damage NXWM's position/dominance in the West Midlands, so they pushed to go down the Quality Partnership route instead. As as result of that threat & a change in senior management within NX Group, it is due to those reasons that capital investment levels in new buses at NXWM have been raised, the existing fleet is also been re-freshed and they are trying to improve the quality of the service/vehicle presentation offered. This in turn keeps Centro on side, NX UK bus performance should be improved along with passenger growth, ultimately producing more profits for group and shareholders, ultimately everyone should benefit.

Two years from now NXWM will have a very modern fleet with a low average age, the quantities of new buses committed too will see all B6LE, B10L, Mercs 0405N, Spectra been withdrawn. I think the lion's share of the 300 new buses needs to be double deckers, which hopefully should be the case with the 10 gold corridors being implemented

As you know I have been a fierce critic of NX's mismanagement of its fleet so you won't find me grumbling when they finally pull their finger out.

However, what I don't like is the pally nature of this announcement between Centro and NX. Quality Partnerships are great, but the problem with them is that they are increasingly inaccessible to smaller or new operators and you end up with what appears to be Centro money being channelled into a private company's coffers so that it buys new vehicles it should have been buying years ago. This is how the announcement makes things appear. To the casual bus user who knows nothing, they would think that Centro and NX are the same thing if they had watched that report on the BBC.

At least Quality Contracts can go to anybody. Centro have been manipulated in my opinion.

My point is that NX should have been buying ages ago, and now we can see why they didn't bother! Does nothing for competition in the area and as you say, just increases and strengthens NX's dominance and monopoly....and enables them to cream off even more for their shareholders without having to invest independently. Not healthy.

Andy,

As we've discussed before a number of times in the past, it's fair to say that NX became too complacent in the West Midlands in terms of vehicle presentation & new fleet investment due to their dominant position. And to a degree the travelling public have voted with their feet, passenger numbers have declined as have TWM/NXWM profits, WMT were once producing industry leading profit margins in the UK, now they are fairly average at best, but improving. There have been other external factors which have impacted on some of the above i.e. the credit crunch & high unemployment, Richard Bowker buying Continental Auto using debt / the handing back of ECML franchise which left NX with unmanageable debt levels at a time when credit was hard to obtain/re-finance favourably etc, plus NX were too focused during 2004-2006 on expanding Travel London, which took priority over TWM. I have no objection to NX making large industry leading profits for shareholders from NXWM as long as NX are seen to be providing a high quality service, vehicle presentation internally/externally is good and routes are operated with a modern fleet & low average vehicle age. If the service delivery is there, capital investment remains high and NX are continually looking to improve/grow the business and I don't see that anyone could argue with the returns NX make. The signs are there that this could be achieved, I think by mid 2015 after the other 300 new buses have been delivered, the refurb programme is on-going with new initiatives coming on-line the NXWM business will be a fair way ahead of where are now and I also think Dean Finch is striving to achieve best in class operations across all NX group divisions and appears to be delivering to date...

Realistically, Quality Contracts would struggle to get off the ground in the West Midlands because the NXWM travelcard is more wildly used over any NWM offerings, and NX are hardly likely to relinquish control of that. Additionally, would any of the smaller independants in the West Midlands, Rotala included be in the financial position to fund a new bus depot & fleet should they win a quality contract involving say 50+ vehicles on a core NXWM corridor? I think the threat of Quality Contracts has been enough for NXWM & Centro to work together, NX earn greater profits from it & Centro delivery a higher quality transport system to meets the requirements of their long term transport strategy. Although, you say Centro were manipulated, they did have the power to tell NX that they are proceeding down the Quality Contracts route, as I see it their Quality agreements are a compromise for both parties that benefits all with terms reviewed every couple of years

[andy]

Don't want to keep quoting as it makes the thread unworkable....

Winston, I do take your point re quality, but not re Contracts.  Under the contract system new players are very easily able to enter new markets as a degree of the money will come up front plus they can budget for a guaranteed income when sorting out their overheads and investments. Even if it wasn't a smaller independent, at least one of the other groups could get involved in the area?

It is Centro's failure to tackle the NX travelcard that puts other operators off coming into the area, if we had Contracts they would have no choice but to make an alternative offer and revolutionise the travelcard system.

You talk as if there should only be one profitable and dominant operator in the area, and that Centro and we should be happy with that as long as buses run. That is not what deregulation was supposed to be about!!

What if, for instance, that large dominant operator suddenly went pop?? It's not inconceivable in this day and age, look at First?

[PM]

The person I agree most with here is Andy. I am struggling really with what the announcement had to say-centro seem too linked to natex

[j789]

I am struggling really with what the announcement had to say-centro seem too linked to natex

Perhaps that is because they are the only company that could achieve the successful outcome Centro wants. There is not one other company in the region who has the resources/creativity/initiative to provide what Centro wants - that is why Centro and NXWM have a close relationship - what is the point of making an enemy of the only company able to provide the solution.
Also, how can anyone criticise the NXWM travelcard which saves people money and is valid across a wide area and argue in favour of more expensive every operator cards which are only valid in certain area??? If quality contracts ever were introduced bus fares would not get cheaper, the exact opposite would happen, unless you fancy paying a huge subsidy from your taxes. I certainly don't want to.

[Tony]

I am struggling really with what the announcement had to say-centro seem too linked to natex

Perhaps that is because they are the only company that could achieve the successful outcome Centro wants. There is not one other company in the region who has the resources/creativity/initiative to provide what Centro wants - that is why Centro and NXWM have a close relationship - what is the point of making an enemy of the only company able to provide the solution.
Also, how can anyone criticise the NXWM travelcard which saves people money and is valid across a wide area and argue in favour of more expensive every operator cards which are only valid in certain area??? If quality contracts ever were introduced bus fares would not get cheaper, the exact opposite would happen, unless you fancy paying a huge subsidy from your taxes. I certainly don't want to.

And surely amy money Centro spend on infrastructure (bus shelters/bus priority etc) benefits all operators, not just NX

[winston]

Andy,

Fair point re: quality contracts, you've obviously got a greater understanding of how those work than me. It does sound from what you say that Quality Contracts could encourage smaller operators to bid for routes as well as new entrants i.e. one of the other four big UK bus groups. The thing I don't quite understand how it works, is how can Centro take control of the routes to let out as quality contract to other operators, when the majority of routes in the West Midlands are operated commercially and to a degree are owned by NXWM? Centro don't have the power to just can't take routes off NXWM do they?

I think you're misunderstanding my point, I merely stating that I wouldn't have any objection to NX earning industry leading margins from NXWM for its shareholders, as long as plenty of investment is being ploughed back in to the business to benefit bus passengers and improve the quality of services offered, I'd like to see NXWM one day having the same standards / being held in the same regard as Trent or Lothian

At lot of the failings in the West Midlands land on Centro's door mat, hopefully the threat of quality contracts will be enough to NX on their toes and continually improving / investing

p.s. it's alright not quoting, but I keep forgetting what I'm trying to reply too ;) 

[Tony]

And of course Quality Contract really encourage small operators don't they, err how many small operators are currently running TfL Contracts which are exactly the same as Quality Contracts would be - zero!

[winston]

And of course Quality Contract really encourage small operators don't they, err how many small operators are currently running TfL Contracts which are exactly the same as Quality Contracts would be - zero!

And the one's that have tried to operate Tfl contracts in the past normally end up folding & Tfl have to bail them out....

[tank90]

And of course Quality Contract really encourage small operators don't they, err how many small operators are currently running TfL Contracts which are exactly the same as Quality Contracts would be - zero!

Hate to be a party pooper but what about http://www.ctplus.org/red_bus_our_routes_ctplus aka HTC group or am I missing something.

[richie]

Without being too much of a cynic, it is all very good PR. However the "300" new buses surely would have been part of a business plan for a long time anyway, because let's face it compared to other area's the fleet isn't exactly top nouch is it. (However I accept there is worse).

PR that's what its all about..... to date generally NX now buy 120/130 new buses per year, the revised capital expenditure levels have only come about since Dean Finch came on board at NX group & in conjunction with the Centro quality partnerships. Once these 300 enter the fleet, depending on how many of this years outstanding orders are/aren't included in that total.  NX have had 339 new buses delivered to date inc Dundee (up to NXC 2177 & NXWM 4913), with another 300 due by mid 2015, that will be be circa 640 new buses delivered in the 4 year period since 2011 which will see nearly 40% of the NX UK bus fleet replaced which I think is pretty good going......

What I don't understand is why Centro are including NX's already planned fleet replacement in this announcement. Centro have nothing to do with a private bus operator purchasing new vehicles, unless of course they are finding some weird and wonderful way to help fund it which I'm pretty sure they shouldn't be!

Andy, as I see it its all a bit interlinked, NXWM don't want Centro to ever consider introducing quality contracts as it could damage NXWM's position/dominance in the West Midlands, so they pushed to go down the Quality Partnership route instead. As as result of that threat & a change in senior management within NX Group, it is due to those reasons that capital investment levels in new buses at NXWM have been raised, the existing fleet is also been re-freshed and they are trying to improve the quality of the service/vehicle presentation offered. This in turn keeps Centro on side, NX UK bus performance should be improved along with passenger growth, ultimately producing more profits for group and shareholders, ultimately everyone should benefit.

Two years from now NXWM will have a very modern fleet with a low average age, the quantities of new buses committed too will see all B6LE, B10L, Mercs 0405N, Spectra been withdrawn. I think the lion's share of the 300 new buses needs to be double deckers, which hopefully should be the case with the 10 gold corridors being implemented

As you know I have been a fierce critic of NX's mismanagement of its fleet so you won't find me grumbling when they finally pull their finger out.

However, what I don't like is the pally nature of this announcement between Centro and NX. Quality Partnerships are great, but the problem with them is that they are increasingly inaccessible to smaller or new operators and you end up with what appears to be Centro money being channelled into a private company's coffers so that it buys new vehicles it should have been buying years ago. This is how the announcement makes things appear. To the casual bus user who knows nothing, they would think that Centro and NX are the same thing if they had watched that report on the BBC.

At least Quality Contracts can go to anybody. Centro have been manipulated in my opinion.

My point is that NX should have been buying ages ago, and now we can see why they didn't bother! Does nothing for competition in the area and as you say, just increases and strengthens NX's dominance and monopoly....and enables them to cream off even more for their shareholders without having to invest independently. Not healthy.

Maybe they should have been buying years ago or maybe the should be riding a round in Olympians?

[richie]

Don't want to keep quoting as it makes the thread unworkable....

Winston, I do take your point re quality, but not re Contracts.  Under the contract system new players are very easily able to enter new markets as a degree of the money will come up front plus they can budget for a guaranteed income when sorting out their overheads and investments. Even if it wasn't a smaller independent, at least one of the other groups could get involved in the area?

It is Centro's failure to tackle the NX travelcard that puts other operators off coming into the area, if we had Contracts they would have no choice but to make an alternative offer and revolutionise the travelcard system.

You talk as if there should only be one profitable and dominant operator in the area, and that Centro and we should be happy with that as long as buses run. That is not what deregulation was supposed to be about!!

What if, for instance, that large dominant operator suddenly went pop?? It's not inconceivable in this day and age, look at First?

The west mids needs dominance

[andy]

Maybe they should have been buying years ago or maybe the should be riding a round in Olympians?

Don't really get your point?

[Tony]

And of course Quality Contract really encourage small operators don't they, err how many small operators are currently running TfL Contracts which are exactly the same as Quality Contracts would be - zero!

Hate to be a party pooper but what about http://www.ctplus.org/red_bus_our_routes_ctplus aka HTC group or am I missing something.

Have a look where CTplus run buses and then call them a small operator, Bristol, Jersey, Guernsey, Leeds, Hull, Wakefield, London. Only difference is they are not a PLC

[andy]

And of course Quality Contract really encourage small operators don't they, err how many small operators are currently running TfL Contracts which are exactly the same as Quality Contracts would be - zero!

Hate to be a party pooper but what about http://www.ctplus.org/red_bus_our_routes_ctplus aka HTC group or am I missing something.

Have a look where CTplus run buses and then call them a small operator, Bristol, Jersey, Guernsey, Leeds, Hull, Wakefield, London. Only difference is they are not a PLC

But surely the fact that the market gets opened up atall and other players can get in is positive.  Personally I think the bus industry has been made far too difficult for small companies to make a serious impression with all this 'quality this and quality that', you need a bloody good lawyer to be in business atall and people just can't afford the start up costs or manage the infrastructure required.

The whole industry is now geared around big groups, but at least under the Contract system you don't get one operator monopolies, that's all I'm saying.