Return to Archive -by date - by topic - 2001
As we recall, once the party political flim flam was out of the way, railway privatisation had two interdependent aims. First it freed the Treasury of the running sore of financing the railways - eventually. Second, railway investment would be free of the dead hand of the Treasury with its penny pinching stop go approach.
Win/win as the management consultants say.
Well, sort of. Certainly the Treasury must have thought it a good deal since they signed up to a doubling of BR's subsidy (in a bad year, that is) to get rid of the railways. And all things being equal this subsidy would fall to £700million million over the lives of the first round of seven year franchises.
And after that? Well, of course, the train operating companies would bid even lower subsidy profiles to retain their franchises for a further term. Those BR chairmen rattling their begging bowls had been consigned to the dustbin of history.
Five years on and we bet veteran Treasury officials look back nostalgically on the late 1980s when InterCity made a profit, Network SouthEast broke even and BR funded its investment through its own borrowings. Over afternoon Earl Grey and cucumber sandwiches with their colleagues from the Department of the Environment, Transport and the Regions they probably fantasise over the self supporting British Rail that Chairman Prideaux and Chief Executive Green would have created upon the back of five yearas of relentless economic growth.
Because in the ultimate example of the law of unintended consequences the privatised railway is not only in greater thrall to the Treasury than BR ever was, the projected annual subventions from the public purse have gone up, not down. And how!.
In 2003/04, according to the 10 year Transport Plan, public resource expenditure on the main line railways – forget London Transport for the time being, will be not £700million but £1.3billion. Not quite what was expected.
And dwarfing that sum is £2.3billion public investment expenditure on main line railways. Over our instant tea and bacon sarnies in the Modern Railways offices we fantasise over what Prideaux and Green and all their carefully groomed successors would have achieved by now with that sort of public largesse.
And despite this, the begging bowl is out with a vengeance, as Railtrack offers the choice of financial collapse of more money now – and then sees its share price collapse to a level that might fund an extra point heater at Effingham Junction. Meanwhile Virgin is offering the Government the choice of swingeing fares increases, legal action against Railtrack for compensation the company can't afford, a restrucrured subsidy profile or the prospect of having to find someone to take on the franchises just as the hard part starts.
As for London , under the PPP public resource expenditure is expected to double compared with the figure when Labour came to power in 1997, while public investment, £1.2billion in that year, will still be £700 million in two elections time. Meanwhile, the truth is dawning in London , that, as with the Strategic Rail Authority's much vaunted replacement franchises, the PPP will not deliver much substance in the first five years of private management of the infracos.
In Government perception may be reality, but on a railway tarting up stations cannot conceal the reality of trains, tracks and signalling overdue for replacement.
Is there no relief from the fallout of privatisation's nuclear winter? Yes, the public private partnerships of the light rail systems, with the odd exception, seem to be delivering. Manchester MetroLink, a commercial success and expanding, Docklands Light Railway, the under-specified under-funded toytown railway made good – and expanding, Croydon coming along, Tyne & Wear, the grand daddy of them all extending.
As heavy rail sinks into the quagmire, perhaps light rail can indicate the way ahead.