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Dear Secretary of State
You are a busy man as you get to grips with your new responsibilities, so we will keep this short.
Modern Railways has been the voice of the professional railway for nearly 40 years. We opposed privatisation, not on principal but because we did not believe that there was a pool of private sector entrepreneurs with the ability to match the existing British Rail management. We also believed strongly, and still do, that responsibility for wheel and rail cannot and should not be separated.
So much for history, which we mention because the past inevitably informs the future. But our editorial concerns have always been for the present and future railway.
With the railway in turmoil as never before our advice to you is ‘don't panic'.
Railtrack is a financial, commercial and operational basket case. The Chairman, Chief Executive and Chief Operating Officer are all railway virgins.
Your own executive arm, the Strategic Rail Authority has lost the respect of industry because of its refusal to provide either leadership or a coherent vision of the railway of the future.
Despite not knowing where it was going, the SRA launched into premature franchise replacement and has succeeded in alienating key players. The situation has been reached where judicial reviews are likely whichever bidders are awarded the InterCity East Coast and Trans Pennine Express franchises.
Meanwhile, franchise replacement uncertainty means that the one success of privatisation, the Rolling Stock Companies, are worried about a new order hiatus.
On the London Underground, the continuing wrangling over the PPP means that funding gaps are starting to appear in current investment programmes.
And yet we say ‘don't panic'?
Yes, because it is vital that the long term future of the railways is not sacrificed to short term political expediency. With a five year term ahead, you can, with the exception of the Underground, afford to sit tight while you get it right.
On the main line railway the good news is that this is not a problem than can be solved by pouring in money. You should ask one of your officials to précis the analysis of Railtrack's poor value for money from investment compared with British Rail.
While we are stuck with the West Coast Route Modernisation, at least Phase 1, other Railtrack schemes will not suffer unduly while the railway is given a structure that puts more pounds in the ground from the investment budget.
So you should declare the remainder of 2001 a period of consolidation while your Department determines the shape of the new railway. In your thinking you should ignore seductive pleas that more reorganisation will only make things worse. It is the internal contradictions of the privatised structure that have brought the railway to its present state. More of the same is not an option.
Nor is old fashioned ‘nationalisation' an option. Old Labour nationalised going concerns. Today's railway is mass of subsidised businesses.
Anyway, the state owns much of the railway. It owns the passenger train operating companies and has simply franchised out their management. Much of the subsidy paid to freight and passenger operators end up as track access charges. With so much public money flooding in, Railtrack is virtually a state funded management contract.
And at this point a way forward starts to emerge. Every railway manager will tell you that the fatal flaw of privatisation was the separation of wheel and rail. The railway will remain dysfunctional until this breach is repaired.
One way to achieve this would be to make the infrastructure part of the franchise. Train operating management companies would lease and maintain the track just as TOC's today lease and maintain trains. A unified railway would also start to improve the value for money from investment, by eliminating the compensation payments and restrictions on access to the track inherent in the present structure.
So, don't panic, put a block on franchise replacement and strategic plans for six months while you consult widely, get the best brains on the job and decide what the nation wants from its railway long term. You have won a second mandate – use it wisely.