Return to Archive -by date - by topic - 2001
We opposed the privatisation of British Rail from the publication of John MacGregor's ‘grey paper' in 1992. Our objections were practical not ideological.
Privatisation aborted what we believed would be the new model state railway as conceived by Sir Robert Reid – business lead and vertically integrated – before its performance could be compared with the promise. Worse than that, the massive task of managing the fragmentation of BR into over 100 parts for sale meant that inevitably quality of service suffered.
We were, of course, roundly denounced by the privatisation zealots for our old railway attitudes. Did we not believe in competition? Did we not see that entrepreneurial private sector managers would replace the BR deadwood that was holding back the railway and provide the customer focus for which the private sector is renowned. Above all, did we not want railway investment to be freed from the restrictive, meddling, mean-spirited hand of the Treasury?
Nine years on – how time flies when you're having fun – and no one has got what they wanted – or even expected. Although we would claim credit for pointing out that anyone who thought that the bus industry was the answer for the railways must have posed some perverse questions.
Competition on the tracks may have got more trains for East Anglia and an open access DMU service to Hull , but in today's railway we doubt that many passengers care about who runs the trains. They would just like a reliable train service.
As for entrepreneurial flair, our annual lists of who runs what show that the old railway rules in the TOCs and railtrack's zones.
But what has wrecked the promise of privatisation is the end that supported the whole tottering edifice – the transfer of responsibility for funding from the Treasury to the private sector. And the Treasury must be thoroughly fed up with railways as a result.
Under the first round of franchises, railway subsidy was supposed to fall to around £750million in 2003-04. Now public rail investment expenditure in that year will be £2.3billion, including direct grants to Railtrack, on top of around a billion in subsidy. And Railtrack is asking for another billion, which was to earn a return as part of its asset base from 2006 to be brought forward, and can we have it in cash please, now? The Treasury can be excused for asking why so much money should go into a palpable shambles where tracks crack and new trains don't work.
This, of course, comes after several TOCs have failed to match ambitious subsidy profiles and had to be rescued and Railtrack found that when it came to the cost of the West Coast Route Modernisation it was a case of take the number you first thought of – and double it. And as Informed Sources reveals this month the East Coast Main Line cost increases are mostly about paying for financial and network risks inherent in the privatised railway structure.
Meanwhile, the Strategic Rail Authority is totally out of its depth and has started blaming the Government for the delays to the franchising programme – although those of us who remember Roger Salmon's lean and mean franchising machine may think that ‘franchising programme' is now an oxymoron.
Having asked franchise bidders to come up with ambitious proposals, the SRA has now asked for bids to be based on the status quo so that it can make a legally sound comparison. This comes after it has virtually guaranteed a legal challenge from whoever isn't chosen for Intercity East Coast. That must go down well with an election imminent.
With the Government spin machine saying that SRA Chairman Sir Alastair Morton and his Sancho Panza Mike Grant will not survive long after the election, Railtrack still searching for a Chairman and Sir Alastair probably happy to go if the big private sector finance schemes he has been promoting don't happen, we have an industry that is drifting, powerless, rudderless and, in the case of Railtrack, dismasted and perhaps holed below the waterline.
So what's to be done? Time to wrap up this Railtalk with a coherent action plan in a few crisp sentences. Help!
Mixing metaphors, the immediate task, is to stabilise the patient. This means stopping the hugely distracting franchise replacement programme so that TOC management teams can concentrate on running the railway. No new projects should be taken on, given that engineering and contracting resources are already overstretched. Existing projects – TPWS, Mk 1 stock replacement, the West Coast Route Modernisation must be pushed through drawing on the resources released from franchise bidding and other distractions. The Rail Regulator should focus on getting a viable track access charge regime in place for the new control period that starts this month and declare a moratorium on further consultation documents And the Government should keep quiet about any plans for restructuring or renationalisation and hope that railways won't be an issue for a while.
How long should this retrenchment last? It could take a couple of years – and some may think that optimistic. Others may think that we are being unduly pessimistic in our analysis. Whatever the true case, we believe that the railway needs to get back to a state of boring normalcy and financial stability before it can start to play its role in transport policy. And no one is going to help us do that.