There are several serious problems which have led to the crisis: the collapse for a third time of the Inter-City East Coast franchise; continuing industrial disputes affecting several operators some of which have lasted for more than a year; the failure of infrastructure manager Network Rail (NR) to complete several major projects on time and to budget, and to plan the timetable reliably and in good time; and now huge disruption to services on the networks of two major operators, Northern and Thameslink, following the introduction of a new timetable on May 20. Add to this mix the Department for Transport (DfT), which is failing to give leadership when needed, while it micromanages franchisees.

Britain’s franchising system is clearly struggling. The cost of bidding is exorbitant and margins have become wafer thin, while the need to accurately forecast revenue and costs at least seven years ahead in order to guarantee either increasing annual premium payments or a reducing need for subsidy increases the risk of failure.

This has resulted in a dwindling number of potential organisations willing to bid for franchises, with nine active private players. Many of Britain’s franchises are now operated by subsidiaries of European state-owned railways which have huge resources and don’t appear to mind taking a gamble.

We have just seen the collapse of the Stagecoach-Virgin joint venture on the East Coast Main Line (ECML), which could no longer afford to meet its premium payments just over three years into its eight-year franchise. The DfT’s operator of last resort, London North Eastern Railway (LNER), took over on June 25.

The secretary of state for transport, Mr Chris Grayling, says the DfT will now “begin the task of working with NR to bring together the teams operating the track and trains on the LNER network.” This will be second time the DfT has tried to bring a franchisee and NR closer together. The first involved the former South West Trains franchise which, despite being the only operator on that particular network, failed. But the ECML is used by nine passenger operators and several freight companies, so quite how bringing LNER and NR closer together while excluding everyone else will work is a mystery.

The new timetable involved a major reorganisation of Northern and Thameslink services and increases in frequency but fell apart on the first day with hundreds of trains being cancelled (p46). Both operators have introduced temporary timetables in a bid to stabilise the situation while they find a solution.

There appear to be several causes of this fiasco. While NR completed the huge £7bn Thameslink project on time, which included the complete rebuilding of London Bridge station and the introduction of ATO over ETCS Level 2 on the core Thameslink section in central London, electrification of the Manchester - Bolton - Preston - Blackpool corridor ran late and NR failed to give Northern adequate warning.

There was clearly a failure to communicate both within organisations and between them. Senior managers at Thameslink and Northern should have known that they did not have sufficient train crew with the route knowledge necessary to operate the new timetable, and even if they did know, they didn’t communicate this to NR and the DfT. Carrying on blindly is not a recipe for success.

NR’s timetable department suffered a brain drain when NR moved its headquarters from London to Milton Keynes in 2012 as part of a cost cutting measure. The timetable department has been struggling ever since and failed to cope with the huge number of changes this year resulting in numerous mistakes and several timetables not being published in time.

NR’s inability to manage some of its major projects has been obvious for some time. While some have been managed well, such as Thameslink and the reconstruction of Reading station on the Great Western Main Line (GWML), it is floundering in other areas, particularly electrification of the GWML, and in northwest England. How can there be so much variation in project delivery at NR?

The DfT has shown little interest in trying to resolve the current wave of industrial unrest, which largely results from its insistence that new franchisees seek to eliminate conductors on commuter trains to reduce operating costs. The RMT union has jumped on this and continues to have the upper hand as managers fail to reach a settlement to stop the rolling strikes which have caused misery to commuters for far too long.

The DfT is also failing to manage national assets. Bidders for franchises have been encouraged to introduce new fleets of trains, resulting in large numbers of trains which still have years of life being withdrawn from service with little chance of finding a new home.

The worst aspect of the crisis is that many senior players don’t even recognise some of these problems let alone how serious the situation has become. In these circumstamces, there is little chance of a solution in the near future.