Properly privatising the railways

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Mobster
Soldato
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9 Apr 2012
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The current system of half-privitisation is, I think, not as good as it could be. I think we should try true privatisation in order to create real competition. Prices will fall and the service will get better.

The current system of public ownership of the track and franchises is not sufficient. I think true privatisation would work.

I would be curious to hear your thoughts.
 
Always thought the opposite, those profits would be better put back in to maintaining the network rather than going in to shareholders pockets.
 
Is t the current system caused by the fact the company that owned the track went bankrupt?

I'm not a fan of full public owning of the railways, or full privatization, but do think government owned (but not run) companies should be able to compete against private companies for franchises. For example the East Coast model should have continued, with them being able to bid for the continuation of that franchise and expansion of it.
 
Amp34 said:
Is t the current system caused by the fact the company that owned the track went bankrupt?

I'm not a fan of full public owning of the railways, or full privatization, but do think government owned (but not run) companies should be able to compete against private companies for franchises. For example the East Coast model should have continued, with them being able to bid for the continuation of that franchise and expansion of it.
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As many other countries do. retaining a % share, or a controlling share whilst letting a company be run privately tends to work reasonably well, except in the UK where such a model is shunned, as governments actually making profits and paying for things doesn't seem to be thinkable. If we'd retained 10% of BA, BT, the televisions networks, sky when they were allowed to broadcast to the nation, electric companies water companies, the tax burden would be somewhat lighter, for doing absolutely nothing.
 
you cant really create proper compertion with railways as you have 1 track going from a to b, so it only makes sense to have 1 company run it
 
Amp34 said:
Is t the current system caused by the fact the company that owned the track went bankrupt?

I'm not a fan of full public owning of the railways, or full privatization, but do think government owned (but not run) companies should be able to compete against private companies for franchises. For example the East Coast model should have continued, with them being able to bid for the continuation of that franchise and expansion of it.
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You can't privatise the railways completely because they lose money, and have done since at least the 1930s. The various companies bid on the basis of requiring the least subsidy. No matter how you play it, the government will be involved.
 
Competition and critical national infrastructure don't mix very well without strong regulator intervention . The railways could either be public or private but in any case need to be heavily and efficiently regulated (like water - my field of work). There is always a conflict between lower prices / market competition today and investment for the future.
 
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I agree with privatising the service itself but I think the infrastructure should stay in the hands of the taxpayer.

You just can't trust private companies to keep it maintained and upgraded to a decent standard - the same goes for BT Openreach as well.
 
Gigabit said:
The current system of half-privitisation is, I think, not as good as it could be. I think we should try true privatisation in order to create real competition. Prices will fall and the service will get better.

The current system of public ownership of the track and franchises is not sufficient. I think true privatisation would work.

I would be curious to hear your thoughts.
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In general I'd agree, but the problem with the rail network is that, like communications, it's something of a Natural Monopoly. Inherently, tracks and infrastructure are a unified system. Which leaves true competition basically the preserve of carriages themselves and services (i.e. ticket booking, answering phones). Even the latter one doesn't really work very well competitively because of course you'll be using multiple services for a single journey a lot of the time. And for the carriages, you still have to work out how you're going to handle knock on effects between providers given they're all sharing the same over-subscribed infrastructure. I.e. Virgin's train is five minutes late. This causes North Western's train to sit before the junction waiting for ten minutes and you to arrive late and miss your connection. Arbitrating such matters can quickly become complex. And spreading the organization of such matters across different controllers hinders resolving them quickly.

I agree the current half-system is a mess and it should be rectified. But I think the only option with the rail network is the benevolent dictator model. At least when it's state run we can vote out the people responsible periodically. I don't really remember British Rail (too young!) but with modern computer and communications technology, it ought to be possible to make a unified state-run system that is much better than what we currently have.

The problem is, imo, corruption more than theory.
 
I'm no expert but I am not convinced it can be easily privatised due to inherent constraints imposed by the reliance on physical infrastructure (the above post explains it quite well).
I also think there would be big overheads involved in switching contracts over, and that in itself is a bit of a deterrent to investment i.e. if I am company X I don't want to invest millions of pounds only to lose my contract a few years later and have that capital wasted.

It's not like most industries where you can have genuine competition with few barriers to entry, i.e. you can't just set up joe bloggs train co and run trains to London but you could set up joe bloggs coach co and run buses. There's too many centralised, shared resources and the need for co-ordination around use of those resources, safety concerns etc.
 
surely all the best european railway networks are nationalised?

why would we go the opposite way and privatise it all

it was nationalised in the first place thanks to shocking safety from the original private owners..the railways acts seemed to follow war then some form of disaster or tragedy

when you are in it to make money , safety is usually the thing that suffers
 
Stupid idea for many reasons. Companies' board of directors fiduciary duty is to the shareholders and not the customer. They will chase profits where in fact we should be building and maintaining a first rate railway. This is not a can of beans this is a vital part of the transport network which is very expensive. As a society we will should just accept the cost and pay through increased taxation (unpopular).
 
I don't think there is a viable solution for the railways. The current half-solution isn't working very well, it's taking Network Rail decades to upgrade ageing infrastructure, and even to the point that they abandon projects half-way through (SW electrification).

The problem i see is that if we fully privatise the TOC's and the infrastructure, sure this may generate competition between TOC's operating on popular lines (London), but the rest of the country will likely get forgotten about - or services will likely be awful. The rail-users are then at the mercy of TOC's pricing, as they will likely be able to charge what they wish.

I also can't see how you can force whichever company will own the infrastructure to regularly plough in money for maintenance and future upgrade to the tracks and stations. They will want to maximise profit by doing as little as possible.


Then on the other hand, full nationalisation means the burden falls to the tax-payer. Whilst that might mean rail-users are protected from sharp price hikes, it does mean that the running and large scale projects are unlikely to be as efficient as if they were running under a private company.


The rail network is a complete mess, and i just can't see any options they have of moving it into a self-sustaining model, that can continuously grow and reinvest in itself.
 
Gigabit said:
Japan is mostly privatised and has one of the best and most innovative railways in the world.
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it was under govt control from the end of the war until 1987

so all the major infrastructure and electrification has already taken place

in this day and age lines can still be profitable

http://www.thejournal.co.uk/news/north-east-news/mps-anger-over-national-express-4715139

when the east coast main line was temporarily back in public ownership..it made a profit..the problem is they need to subsidise lines that are not profitable but are essential to keep communities connected

and I think thats the root of the problem, as a nationalised industry in benefits the entire country as smaller routes that make a loss but are important to the local people are kept open. not because they make or lose money, but because to the communities along those lines they are vital

as a private industry the focus is on making money and thats it....benefit the few at the expense of people who rely on infrequent but still important local services.

and if you can make 600million to plough back into the service from the east coast mainline, surely that benefits us all instead of the people getting dividends on a private company

think how much they could be getting from the commuters of southern rail if they ran an efficient service
 
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