September 17, 2004

Former Railtrack boss points the finger

Patrick Crozier | Rail General | Railtrack and Network Rail

We haven't heard much from Gerald Corbett, former Chief Executive (not Chairman) of Railtrack these last four years. But last week the corporate manslaughter case against him was dismissed and he now feels free to speak his mind. And, boy, does he. But not before a rather weak start:

He [the judge] found no evidence of putting profits before safety.

How I cringe when I hear things like that. Never mind, it gets better:

A lot of good things then happened [after Railtrack was privatised]. Because it was a creation of the last gasps of the unpopular Major government, nobody wants to believe anything good came from Railtrack. But between 1996 and 2000 the trains ran better than ever before. The costs were tightly controlled, the annual subsidy fell to below £1 billion. Track quality was restored to the level that existed before the maintenance holiday imposed just ahead of privatisation; investment rose; the safety record steadily improved. The number of trains and passengers grew. The Channel Tunnel Rail Link was saved and the share price was healthy. There were measurable improvements as new disciplines, methods and managers were introduced.

No problem with the claim about passengers (though I would if he was claiming it had much to do with Railtrack). But "...the trains ran better than ever before... subsidy fell to below £1 billion... investment rose..."? Well, I just don't know.

This was in spite of the structure of the railways introduced on privatisation. The fragmentation into more than 100 parts made it a managerial nightmare.

Something with which I heartily agree.

The second problem was the commitment to the West Coast Mainline upgrade. The original conception, the chosen technology and the cost estimate, all done while Railtrack was still in the public sector, were all seriously flawed.

Not sure this is the whole story. I thought there was a further enhancement that Railtrack voluntarily entered into after privatisation.

Prescott’s tirades against the industry weakened rather than strengthened it. His new regulator’s well-meaning public assaults, fines and enforcement orders, when the railways were actually doing quite well, were further nails in the coffin.

Sorry, Gerald, but I am with the Regulator here.

Corbett then talks about the aftermath of the Ladbroke Grove crash and the government's attempts to pin the blame:

At a stroke we had been pronounced guilty. The vilification began. The tabloids flew at us. Our staff were spat at. The Cullen inquiry was like a mediaeval witch trial. Our signallers were hissed. Holding the company together in this environment became mission impossible. Recruiting just stalled.

Well, up to a point, Lord Copper. There's more to it than Prescott. He had accomplices.

And then Hatfield:

I immediately resigned, but was asked to stay. The engineers changed the standards. We checked every rail on the network — something that was right to do, even at the expense of slowing the network. Track quality was improved back to BR levels and we found no other rail in such bad condition as the Hatfield one. Three weeks later I was asked to leave.

But why, I wonder? Incompetence (on the part of the Board) or political pressure? Was Corbett making the Railtrack just a bit too well for the politicians?

So, what's the answer?:

The railway must be reintegrated. A regionally reintegrated railway is the right vision — a railway locally managed, locally run for the people. That is how it was before 1948. That is what John Major wanted before the civil servant theorists rewrote it. The economics will drive it that way, as will the technology. Slowly but surely the costs will then come down and performance will improve. And maybe one day it can go back to the private sector, to benefit from the discipline of shareholders, to reduce the risk and costs to the taxpayer, and to improve efficiency and performance.

Personally, I would do it the other way around but basically he's right: the railway needs to be re-integrated and it needs to be privately owned, along with a few other things.

Update 22/09/04

I've found some figures on subsidy (see very last page). Well, if you go by the OPRAF figures and assume that nothing changed up to 2001 Corbett could just be right - sort of. Having said that we shouldn't forget that subsequent to 2001 a lot of the regional TOCs realised that their figures didn't add up and had to be bailed out.

There's another bunch of statistics here (see page 10)

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Comments

The WCML upgrade plan was all put together while Railtrack was in the public sector (by strategy consultants with little or no engineering knowledge, logically enough).

Privatized Railtrack made two hideous mistakes: taking far too long to notice that the plan was unworkable, and signing a contract with Virgin that committed them to delivering the unworkable plan. The latter was (simplistically) the reason Railtrack collapsed - its liabilities to Virgin effectively left it bankrupt.

Posted by john b on September 18, 2004

There are many issues raised in these statements. The culture within our society has changed dramatically. No resignations took place after the Quintinshill Accident with its 226 deaths, or the 112 at Harrow and Wealdstone. In both instances the enquiries recommended improvemants and changes in the rules, which were applied and would have prevented similar accidents. Hindsight is marvellous, but we should not be looking for scapegoats.

Posted by Brian Hayes on September 19, 2004

A few observations:

My understanding was that at Quintinshill the rules had been broken.

My understanding that railwaymen found responsible for accidents in the 19th Century were often prosecuted.

I seem to remember reading a story about a Scottish railway that in about 1915 bought the wrong type of engines. The Chief Engineer had to resign immediately.

Posted by Patrick Crozier on September 20, 2004

Subsidies are an absolute minefield. SRA publishes historical payments in cash terms and these include penalties/bonuses under the TOC's incentive regimes. Also the basis for allocation of track access charges changed with Control Period 2 in April 2001.

In Informed Sources I bring all subsidy figures to 2003/04 prices and, as with the recent Cross Country analysis put in the historic track access charges.

BUT, whereas BR was paid the PSO, plus some minor grants for level crossings, the privatised railway has sundry sources of Government support in addition to TAC.

for example, from CP2 Railtrack/Network Rail received direct grants from SRA. Then there are grants for CTRL, Freight, running the SRA etc etc.

Thus in 2003/04 total support was really around £4billion and in the current year is £5.37 billion if you include the money NR is borrowing to pay its running costs.

As for Gerald Corbett, he took over a railway which was costing less because NR was spending less on maintenance and assumed it was getting the same amount of work.

He twigged that something was wrong and was putting in monitoring systems for the maintenance contractors which were beginning to have an effect. Then Hatfield happened.

We should also note that Railtrack was spending less on renewals and maintenance than BR's historic average in a less efficient structure. Which made it look as if the railway was more efficient - but has now made the railway unaffordable at current costs in the long term.

Posted by Roger Ford on September 22, 2004

>>I seem to remember reading a story about a Scottish railway that in about 1915 bought the wrong type of engines. The Chief Engineer had to resign immediately.

Highland railway, as chronicled in Adrian Vaughan's "Great Railway Blunders". Really a case of office politics; a chash of egos between the Chief Mechanical Engineer (who designed the locomotives), and the pig-headed Chief Civil Engineer, who distrusted the CME's "fancy mathematics" and insisted they were too heavy.

The Highland railway promtly sold the locos to the Caledonian Railway for significantly more that they HR had originally paid for them.

The sacked CME had the last laugh in 1923, when the HR and CR were merged into the LMS; all six locomotives were immediately reallocated to ex-HR lines, where they worked for the rest of their lives!

Posted by Tim Hall on October 14, 2004

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