Misplaced Pages

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39-594: Thameslink, Southern and Great Northern ( TSGN ) is a management contract for the provision of passenger services on the Thameslink and Great Northern routes to Bedford , Luton , Peterborough , King's Lynn , Cambridge , London King's Cross , London Moorgate , Sutton , Wimbledon and Brighton , as well as the whole Southern network (including the Gatwick Express ) and the jointly operated First Capital Connect Southeastern services (for example

78-483: A fee. Business students usually get confused between the concepts of management contracts and franchising. Although they have much in common, (both earn by selling intangibles and both works as affiliate for another company) a management contract acts as a framework and provides formation and structure to the company and its members, and franchisees remain independent. A businessperson who owns several companies cannot distribute their attention to every minute detail of

117-587: A large number of hotels in Asia run under management contract arrangements. It's common for contracts to span 30 years, with fees as high as 3.5% of total revenues and 6–10% of gross operating profit. Management contracts are also prevalent in the airline industry, particularly when foreign government actions restrict other entry methods. They're often employed in regions lacking local skills to manage projects. As an alternative to foreign direct investment, management contracts entail lower risk and can yield higher returns for

156-410: A management contract might lead to difficulties and problems for the business owners. By entering into such agreements, businesses tends to risk their privacy. When company management is contracted to a third party, the business owner may enter into confidential disputes. These contracts could expose the business to ethical breaches, fraud and public exposure. The information of the other contracts made by

195-653: A seven-year contract to operate the franchise. In March 2000, the Shadow Strategic Rail Authority (SRA) shortlisted Sea Containers and Virgin Rail Group to bid for the next franchise. The franchise was to be for 20 years and included proposals for new trains and replacements of sections of track. In January 2002, the SRA scrapped the refranchising process and awarded a two-year extension to Sea Containers until April 2005. In October 2004,

234-472: A vulnerable position. Hiring an outside contractor makes it difficult for the business to foresee the number of conflicts that can occur. For example, a business owner hires a contract management company for the operations of the company. The management company may in turn take on the management of the supplier's company too. This can lead to several compromises in the discounts, price negotiations and suppliers way of working. There can be even more conflicts when

273-591: A wholly-owned subsidiary of the Department of Transport . At inception the franchise inherited and operated a fleet of InterCity 125 and InterCity 225 trains. These were refurbished with new interiors in the mid-2000s, the former of which were retired in December 2019, the latter were due to be retired in 2020. All to be replaced by Class 800 / 801s . It was announced in February 2020 that LNER will retain

312-594: Is a railway franchise for passenger trains on the East Coast Main Line in the United Kingdom from London King's Cross to Hull , Leeds , Bradford , Harrogate , Newcastle , Edinburgh , Glasgow , Inverness and Aberdeen . It was formed during the privatisation of British Rail and transferred to the private sector in April 1996. Initially operated by Great North Eastern Railway (GNER), it

351-445: Is assigned to the operator. The hotel management contracts can be lengthy and complicated. The negotiation of this agreement focusing the power of the owner and the rights of the operator. The initial draft is offered by the prospective operator. It usually is in favor of the operator so that operator can seek a long-term contract. It doesn't want any interference from the owner but at the same time wants continuous supply of investment for

390-399: Is between the investor and the builder. This is for use on construction projects. This contract is usually appointed by the client (investor) in the early stage. The relationship between the client and the management contractor usually covers both the work of pre-construction and construction activities. The management contractor is responsible for all the administrative and operational work of

429-542: The Kentish Town  – Sevenoaks via Catford ), which were added to the franchise on 25 July 2015, with the Southern and Gatwick Express brands retained. The TSGN franchise is operated by Govia Thameslink Railway , owned by Govia , and is the largest railway franchise in the United Kingdom. The Department for Transport decided to create a new Thameslink, Southern and Great Northern franchise with

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468-528: The Secretary of State for Transport announced that this would be put back to February 2015. In January 2014, FirstGroup , Keolis / Eurostar International Limited (EIL) and Stagecoach / Virgin were announced as the shortlisted bidders for the new franchise. In November 2014, the franchise was awarded to Stagecoach/Virgin, who trading as Virgin Trains East Coast (VTEC) commenced operating

507-653: The EU, Heathrow serves the Indianapolis International Airport under a 10 years management contract. It also provides retail management at the air mall in the Pittsburgh International Airport . The government uses management contracts for the progress and development of the skill of the local managers and workers. They also accolade management contract companies to upgrade and operate public utilities. Entering into

546-461: The SRA issued an Invitation to Tender for the next franchise to the four shortlisted bidders, Danish State Railways / English Welsh & Scottish , FirstGroup , GNER and Virgin Rail Group. In March 2005, the franchise was awarded to GNER for seven years, with a three-year extension based on targets being met, starting on 1 May 2005. GNER committed to pay a £1.3 billion premium to the Department for Transport (DfT) over ten years. However, due to

585-569: The business a hole in its team for the smooth functioning of the operations. A contract management company can easily change few employees without stirring the constancy of the business model. Through management contracts, a businessperson can venture into international business opportunities without taking a huge risk of putting their own physical assets at stake. For example, the Heathrow Airport Holdings Limited of Britain retains general airport management skills. In

624-402: The business is also available to the management contract companies. Since their responsibilities range from price negotiation to stock control they have full information about the vendors. Management responsibilities includes record of all employees, their personal information and payments procedures. Management contract companies have information on business finance also. This puts the business in

663-408: The company. The first recorded management contract was initiated by Qantas and Duncan Upton in 1978. In business management, franchising entails a contractual relationship between the franchisor (owner of the company) and the franchisee (purchaser of the brand name). The franchisor grants the franchisee the right to use its trademark, alongside specific business systems and processes, in exchange for

702-535: The company. They require some professional help with their task so they can focus on more important details. Companies that specialize in contract management may be able to help. On hiring such companies, the owner will have more time to concentrate on the expansion of the business rather than day-to-day working of the companies. The businessperson can distribute some of their basic responsibilities to these management companies such as recruitment, deployment and retention. There are several companies that are unable to reach

741-433: The construction project. The investor usually comes in the picture to hire the management contractor and then when the building of the project is complete. The entire work in between these two events is done by the management contractor. The managing contractor is responsible for sub-contract claims arising from its own inadequate performance. It the elements to be included in a project, and the design of those elements, with

780-496: The contractual terms of operation, and would not provide any further funding. This meant NXEC would run out of cash by the end of 2009. As a result, the DfT announced it would re-nationalise the franchise. The franchise was re-nationalised on 14 November 2009 with Directly Operated Railways ' subsidiary East Coast taking over, with the intention being that operations would return to a private franchisee by December 2013. In March 2013,

819-401: The existing Southern and Gatwick Express brands were retained. The franchise is unusual as a management contract where fare income does not go to GTR, which is simply paid a fee for operating the service, so GTR carries less revenue risk. This form of franchise was chosen because of long-term engineering works anticipated around London, which would be a significant challenge to organise within

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858-422: The expansion and growth of the project. The main purpose of this agreement is to help investors of some hotels who lack the skill and knowledge needed to operate them. They are mere businessperson with good financial status. They lack experience or expertise in such field. Therefore, they need the assistance of such management companies who can get the output of their investment. Construction management contract

897-473: The financial problems caused by it having overbid as well as financial difficulties encountered by the parent company, in December 2006 the government announced it was stripping the franchise from Sea Containers and would put it up for re-tender, with GNER running the franchise on fixed fee management contract in the interim. In February 2007, the DfT announced Arriva , FirstGroup , National Express and Virgin Rail Group had been shortlisted to lodge bids for

936-487: The franchise on 1 March 2015. In November 2017 Secretary of State for Transport Chris Grayling announced the early termination of the East Coast franchise in 2020, three years ahead of schedule, following losses on the route by the operator. Virgin Trains East Coast had been due to pay more than £2 billion in franchise premiums to the government over the last four years of its contract. Secretary Grayling claimed

975-414: The franchise, in the first half of 2009 NXEC ticket sales income decreased by 1%. In April 2009, National Express confirmed that it was still pursuing talks with the government over possible financial assistance with the franchise, either through a reduction in the premium due, or other assistance. In July 2009, National Express announced it planned to default on the franchise, having failed to renegotiate

1014-484: The franchise. In April 2007, it was announced that GNER had a 10% stake in the Virgin Rail Group bid. In August 2007 the franchise was awarded to National Express, and GNER's services transferred to National Express East Coast (NXEC) on 9 December 2007. By 2009, NXEC was under increasing financial pressure due to rising fuel prices and the economic downturn. Instead of projected increases in revenue from

1053-422: The future franchise would be a management style contract due to the level of investment and change on the route. In September 2013 a revised invitation to tender was issued. In May 2014, Govia was awarded the new franchise. Now operated by Govia subsidiary Govia Thameslink Railway , the former First Capital Connect parts of the franchise returned to their former brand names Thameslink and Great Northern while

1092-421: The hotel. The base of this relationship is that the operator handles the day-to-day working of the hotel and takes up all the additional responsibilities such as maintenance, front office, housekeeping, handling food and beverages and sale. The management contract company has the power to recruit and fire the employees. The owner will authorize and pay for the capital project of the hotel but the responsibility of it

1131-450: The losses were due to VTEC simply overestimating future growth in passenger revenue in its bid calculations, meaning franchise payments due to the government exceeded the profits being returned by running the services, while others believe the delays in state owned Network Rail delivering expected infrastructure upgrades meant the company could not operate the increased number of services needed to generate this increased revenue. Termination

1170-437: The management expertise of a contractor organization to assist and advise in developing the design, coordinating the interface between design and construction, undertaking the construction and planning for and remaining within a target cost and target time for delivery of the project. Advantages of construction agreements are: Disadvantages of construction agreements are: InterCity East Coast InterCity East Coast

1209-467: The normal form of franchise. From July 2015 when GTR took over the Southern services to March 2017, 7,7% of planned services have been cancelled or delayed by more than 30 minutes. The most important reason for the delays and cancellations were industry actions (38% of the total). 13% were caused by failures of track and Network Rail assets such as signalling systems. As the Department for Transport in

Thameslink, Southern and Great Northern franchise - Misplaced Pages Continue

1248-506: The peak of success due to a lack of expertise in one field or another. Such companies should hire contract management teams. This way they would not just be hiring an experienced employee but an entire team of efficient and experienced employees in technical fields of management, accountancy, marketing etc. Management contracts give business owners an assurance of the continuity of their business. This can be illustrated through an example. A manager or any employee may terminate their job, leaving

1287-464: The period from September 2014 to August 2017 has received £3.6   billion in fare revenue and had to pay only £2.8   billion in franchise payments to Govia, it made a profit for the taxpayer of £760   million. In 2017, the Government confirmed it was considering the size of the franchise at its next renewal, indicating it could be broken up. In May 2018, following the announcement of

1326-673: The renationalisation of InterCity East Coast franchise as London North Eastern Railway , Grayling revealed despite not reaching a decision on the future of Great Northern services beyond 2021 it had been proposed that Great Northern services could be merged with the London North Eastern Railway or transferred to London Overground . In March 2022, GTR was given a direct award contract by DfT, replacing its franchise agreement, expiring on 1 April 2028. Management contract Taking advantage of economies of scale, international reservation systems, and brand awareness,

1365-455: The same management company handles the management of several competitors simultaneously. International management can be very risky for management companies. If a country is going through political or social turmoil, the life of the Manager is put at risk to carry on with the business in such a situation. Hotel management contract is a written agreement between the owner and the operator of

1404-510: The services jointly operated with Southeastern to be added in December 2014 and the entire South Central franchise in July 2015. In March 2012 the Department for Transport announced Abellio , FirstGroup , Govia , MTR and Stagecoach had been shortlisted. The Invitation to Tender was to have been issued in October 2012, with the successful bidder announced 4–6 months later. However, in

1443-518: The wake of the InterCity West Coast refranchising process collapsing, the government announced in October 2012 that the process would be put on hold pending the results of a review. In January 2013 the government announced it would be exercising an option to extend the existing contract until March 2014. In March 2013 the Secretary of State for Transport announced the franchise would again be extended until 13 September 2014, and that

1482-481: Was brought forward in February 2018 to June 2018. On 16 May 2018, Secretary of State for Transport Chris Grayling announced the franchise would be terminated on 24 June 2018 and renationalised. A partnership of Arup Group , Ernst & Young , and SNC-Lavalin Rail & Transit provided assistance to the government in their preparation to take control of the franchise from VTEC and it is currently operated by DOHL ,

1521-457: Was later operated by National Express East Coast , East Coast and Virgin Trains East Coast . In June 2018 the franchise was terminated and the trains and stations taken back into public ownership; since then, services are provided by London North Eastern Railway (LNER), a company owned by the Department for Transport . In April 1996, Sea Containers , operating under the GNER brand, commenced

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