March 28, 2004

Why the claim that rail re-integration would damage cross-country businesses should be ignored

Patrick Crozier | Fragmentation

There is a remarkable consensus developing over the future of Britain's rail network and it revolves around vertical integration. Editorials are calling for it. Politicians on both the left and the right are calling for it. Only this week both South West Trains (a train operator) and Network Rail (the infrastructure owner) separately announced/leaked plans to take over the bit of the network they don't already control.

100_0041.jpg
Large object of desire for train operators
The momentum for change is almost unstoppable. And to think a year ago I thought it would never happen.

There is one fly in the ointment, however. In reports of SWT's plans for re-integration dissenting voices were heard from EWS (the freight operator) and the Department itself which talked of "Balkanisation".

I am not sure what "Balkanisation" means. I guess it is an objection to a rail network on a regional rather than a national basis. I suppose the claim is based on the idea that Yugoslavia was a happier country when united than disunited. Well, it's a theory.

EWS's argument (which I think is the same one) is that under a regionally integrated structure their inter-regional trains wouldn't get a look in. And therefore vertical integration should be resisted.

There are a couple of points here. First of all, let's assume the worst. Let's assume that not only are EWS's worst fears confirmed but that it's even worse than that: under vertical integration there are no, absolutely no inter-regional through services whatsoever.

100_0058.jpg
Large object of desire for infrastructure companies
How bad is that? Not very. Freight and Cross Country combined probably only account for 10% of rail revenues, if that. Something like 70% of all rail journeys start and finish in London, which pretty much means they stick to the region ie route they start in. Frankly, the priority must be for something that works for the main part of the business. The rest of it has to take its chances.

Incidentally, if the inter-regional business was the lion's share of the business then the network would be run on a national basis anyway - the market would see to it.

That's the Domesday scenario. But it isn't going to be like that. The reality is that railway owners would only be too happy to path (as they call it) "foreign" services through their network (all things being equal that is). It's money for nothing - and we all like that. Sure, there would be problems. The EWS train from Southampton might get to Reading at 1000 only to find that there were no paths until 1100. And there are all sorts of issues about compatibility, prioritisation, axle weights and reliabilty. But the way I look at it is that if the job is worth doing ie it's profitable it will be done.

I believe there is a precedent for this. I believe that before nationalisation, before Grouping even, there were through services and that these were enabled through a combination of local agreements, jointly-owned lines and the ministrations of the Railway Clearing House.

Anyone out there know for sure?

Trackbacks

Sectorisation = London Centricity?
Reintegration of the rail-wheel responsibility is a hot topic again and it's being discussed at Transportblog. The angle on it this time is that various people (SWT and Network Rail) are tentatively floating plans to create vertically integrated franch...
Not On My Watch on March 29, 2004

Comments

Much as I personally enjoy train travel, the case for passenger services for journeys of more than a couple of hours is weak. If trains to Glasgow were taken away, then I would simply catch a plane. Even if trains to Glasgow were not taken away, there is a good chance I would still catch a plane. Take away all train services in Britain of more than (say) two hours and the impact on the British economy would be negligible. Most people would be unaffected and those who were affected could find alternatives easily.

On the other hand, take away all train journeys of less than two hours (or less than one hour, most importantly) and you would have chaos, as huge numbers of people would be unable to get to work and/or go about their daily business in other ways.

And all this is why if long distance train services were withdrawn, I would smile sadly and suffer from a bit of nostalgia, wherease when I see a headline on the right about there being another delay to building the East London Line extensions due to more government and bureaucratic incompetence I get the urge to break things.

And while there is a strong case for rail freight, this is in a market where there are other alternatives, and it is more the case in places with continental scales (eg the US) than Britain.

Posted by Michael Jennings on March 28, 2004

Michael

I am terribly sorry I haven't explained things particularly well. When I mean inter-regional what I mean is services that cross regional boundaries. By that what I really mean is services which would have been carried on the metals of more than one rail company prior to nationalisation.

For example London to Glasgow prior to 1948 would have been entirely on LMS. So therefore, it counts as one region - bizarre as that may sound. With the exception of the Scottish bit it may still (for railway purposes) count as one region. Ditto London Kings Cross to Edinburgh (LNER).

The sort of journeys I had in mind as being inter-regional would be things like Southampton to Oxford (Southern Railways to Reading, Great Western to Oxford)

In other words I am not about to make things even more difficult for Andy and David to get to London than they already are.

Posted by Patrick Crozier on March 28, 2004

I’m not sure. I thought they had agreements to use all operators’ routes so a train starting in Brighton and going to Glasgow might of passed several railway companies. But as you say if the lines are not used at night and someone says can i use your rails and I will pay you money then it is money. Tesco doesn't not want to sell its food does it?

However Notwork Rail is rearing its ugly head. By saying it should run the trains. Well that to me is BR. So we are going backwards. However the test of the South Western route to waterloo looks promising.

I really cannot see Notwork Rail surviving or if it does it will be in name only. I can't see what Alistair Darling is going on about “Balkanisation” Isn't Notwork Rail already Balkanising the Rail Network. It owns all tracks. Notwork Rail is a dangerous company accountable to no one. The government has to write blank cheques, as it cannot go bust. They had a chance after Railtrack went bust to lease out the lines to the franchisee's but did they oh no they created something much worse then Railtrack ever was.

Long live the golden days of Railways. We need to see a return to eight companies. Lets hope the new companies decide to use the old names like the Great Western Railway and Southern Railway that operate signals and infrastructure. With an independent regulator free of government interference and try to get the subsidy down to almost nothing. If its achievable in Japan then it has to be here. When JNR was privatised it was £130 Bill in debt yea that’s pounds not yen. But the government wrote this off to free the companies of being saddled with debt.

It’s about time the government listened to the rail companies they can raise money far quicker dan Notwork Rail. Notwork is already £10 bil in debt and receiving subsidy of £4.5 bill a year. Just exactly where is this money going? They have several different prices for regions for track renewal and the claim of 200 miles of track replacement under Railtrack is false. More like 400 as quoted by CHRISTIAN WOLMAR Even then it shouldn’t cost this much and take ten years to get back to equilibrium.

To me most of the money goes on consultancy fees and massive duplication. Some people moan about the wasteful 19th century duplication. But it had benefits. A lot of villages in the country had a station. If one lined was blocked you could go another way. Today’s duplication just costs a lot more money with no apparent benefits either. Re integrate track and trains now and let the private sector get on with it.

Posted by Amir on March 28, 2004

There are two separate issues here.

One is long or medium distance passenger trains crossing the territories of multiple companies. I'm sure that if such services are economically viable then companies will find a way of operating them and sharing revenues, just like they did prior to 1948.

The other issue is freight. EWS have a real fear that handing control of the track to passenger companies will result in freight being squeezed off the tracks.

Have their been any comments on this from Freightliner? It's them, not EWS who are the big freight operator in SWT territory, with a lot of container trains coming out of Southhampton docks.

Posted by Tim Hall on April 1, 2004

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