March 13, 2004

Reuniting train and track is best way to keep the railways running

- John Redwood in the Times...link
Posted by Patrick Crozier at March 13, 2004 09:11 PM
Comments

I note that the Member for the planet Vulcan neglects to mention whose idea it was to split wheel and rail in the first place.

Posted by: Tim Hall at March 14, 2004 12:13 PM

The problem with today’s society is people are not allowed to fail. Brunel who was a master and way ahead of his time had to swim for his life after something went titsup.com when building a bridge. The original shareholders lost money as Brunel drove the great western out of business. But there is always someone else to pick up the pieces. But Brunel risked shareholders money not taxpayers. The Victorians were higher risk takers. This is what I find scandalous now. The Tories finally admit mistakes were made. Just because roads and planes have separate infrastructure owners that it could be applied to the railways. At least they tried and failed. So what. What I find unacceptable though is the continuation of this stupid present system of things. John Redwood however Tory he may be is at least talking sense. Plus there is evidence of regional railway companies. The Japanese, our previous nationalised rail system. The Great Western Railway was formed in 1840 it survived until 1948 when it was nationalised. It worked then. So it is bloody obvious as rainy day by the sea. Split up Network Rail and when franchises are renewed the include everything and long term i.e. 20 years. So companies think long term and not about we might loose the franchise in 2 years so milk it. Talk about joined up government. This government makes the railways look like British Rail.

Posted by: Amir at March 14, 2004 07:32 PM

Except that this mistake was entirely forseeable.

Posted by: Mark Ellott at March 15, 2004 03:41 PM

"Except that this mistake was entirely forseeable."

Where is your evidence to back this up? If you look at airlines it is quite successful. BAA ownes the airport and tarmac. Planes have slots and pay for them.

People were just against privatisation. Just like selling BT and British Gas was a bad thing cause prices woud rise and profits, profits etc...

Posted by: Amir at March 15, 2004 08:26 PM

Amir, I was working in the railways at the time and I could see it as could just about everyone I worked with (blindingly obvious springs to mind). The vertical relationships that relied on co-operation to work effectively would be split into different operations with penalty clauses when things go wrong. It doesn't take much figuring out to see where that would go. You don't need evidence or statistics - just an understanding of human nature.

Also, the railways are nothing like the airline industry and the comparison doesn't hold up - the infrastructure is wider spread, more complex and high maintenance (not to mention massive regular renewals projects). Therefore the costs are staggering and the potential to disrupt services are not only high, but the train operator has little or no control over those effects.

Anyone contemplating such a proposal must have looked at the implications. Unfortunately, this was a privatisation that was carried out in desperation - political dogma ruled, not common sense and what was best for the industry.

As a final point, I remember reading an article a few years ago about the Victorians - they considered the horizontal split and rejected it as unworkable.

No, this one was foreseeable.

Posted by: Mark Ellott at March 16, 2004 09:08 AM

Mark,

I can quite easily see why the stupidity of the vertical split seem obvious to you.

However, if I recall correctly, it did not seem so obvious to politicians. The typical opposition objection was to privatisation not to fragmentation. I seem to remember even John Prescott saying that when he got into power he did not scrap fragmentation because he felt it was worth a try.

I still get asked this occasionally: why doesn't fragmentation work on rail - it seems to work on road and in the air all right?

Now, to the guys on the front line it seems obvious. And there are plenty of empirical examples to back it up. But what I have not seen is a theoretical explanation. What is it about replacing tarmac with steel rails and rubber tyres with steel tyres that means that whoever operates the vehicles must also control the infrastructure?

Posted by: Patrick Crozier at March 16, 2004 10:50 AM

A number of things that struck me:

Relationships. Signallers communicate continuously with train drivers through the signalling system. They have to ensure that trains arrive at the right place at the right time while ensuring that engineers have sufficient access to the infrastructure to carry out maintenance and repair work. This can be a delicate balancing act requiring co-operation from all parties. There is no such parallel on the roads and only partly so with air traffic control (no one is carrying out sleeper renewals in the sky). I'm not sure it would have been possible to effectively model this in theory because it is so reliant on human relationships.

The infrastructure owner may have different priorities when it comes to management of the infrastructure to those operating over it.

Train operators are hostages to fortune. A road haulier may choose different routes or travel at different times to facilitate a journey. A train operator is bound by the timetable and penalised for not meeting it - even though all too often, they are powerless to effect control over the situation. To a certain extent, there is a parallel here with air traffic control.

My own attitude to privatisation was ambivalent - I came from a commercial world (self-employed) and was horrified at some of the working practises. To me it was obvious that change was needed. Unfortunately I could also see that they were going to break what was working well in order to make a political point.

I've just got to comment on this:

"However, if I recall correctly, it did not seem so obvious to politicians."

Nuff said! ;-)

Posted by: Mark Ellott at March 16, 2004 02:34 PM

Of course you are all right. But Patrick does raise a very good point. On paper it is not so obvious that vertical fragmentation doesn't work. It did with British Gas I’m sure if BT was broken up it would also work. Surely if there wasn't so many years of under investment leading up to privatisation then Railtrack would have more of a chance. But the problem lies mainly with the government. However Mark is right when he says the relationship of the track to the train is much greater than on roads and Plaines. A road just sits there if a pothole appears you can still go over it without immediate danger. A cracked railway is not so obvious. Also you do need signals to guide the driver while on road you can use your own judgement. I wasn’t having ago but I like evidence not just “its obvious it doesn’t work”

In an unregulated industry Railtrack would have sold track to train operators and Railtrack would have started to run trains. If a businessman can hire a train to compete with Virgin because he was fed up with the service then why couldn't Railtrack?

The Conservative government thought up this idea because they were obsessed with competition. What they wanted was two operators going the same way and competing on price.

John Major however did want regional privatisation and dreamed of the old big four coming back.

Two things happened. John Prescott and Tony Blair threatened to nationalise as soon as they came into power. The Tories didn't have time to privatise properly so rather then thinking of a system like big four could easily be bought back again. So dreamt up such a complex system that couldn't be nationalised again. Also a powerful think tank and public opinion was against big companies such as British Gas. So a privatisation where BR would have been floated on the stock exchange was also ruled out.

New Labour is even worse than the Tories. They want this mad hybrid not truly nationalised but not privatised. These companies such as Notwork Rail are accountable to 116 memebers. Who are these members? I cannot name one of them? Cronies of Blair? This government wants to privatise blame while nationalise credit. You see an accident then it’s the operator. Improve in performance then it’s down to the public company. Like the article about South Eastern Trains. Because its ran by then the SRA and publicly improved then we should keep it public. Not the fact that 20 other train operators have improved performance almost half better than SE Trains. Notwork Rail drains 4.5 bil a year in subsidy. Three times more than the bad old Railtrack. This is a sickly waste of money. Even though they are replacing a lot of track that wasn't done under Railtrack they are also wasting money because they don’t need to cut costs hey we can’t go bust because we ask for more than the regulator. But at the end of the day they are bankrupt. So was Railtrack. No money = administration.

It's obvious now that this system doesn't work. Why then did Stephen Buyers who done well to take Railtrack on then completely messes up by creating the same company again but this time without shareholders? Even better now they can do what they want and no one can do anything.

This government should move quickly to ensure that infrastructure is part of the franchise and break-up of Notwork Rail. Will they. Nope they will carry on with everyone moaning. But better still everyone gets their cut along the way! Blair's cronies. Ken Clarke had shares in Railtrack and sold them way before they went titsup.com

Politicians need to be out of the picture. The SRA is reducing the amount of franchises with the greater Anglia Franchise being operated by National Express. They are even thinking about calling it The Great Eastern Railway. A throw back to the past and with South Central changing its name to Southern Railway in the summer its about time we headed back to six to eight big companies owning train and track with some overlapping routes for competition. But I’m sick of talking about it. We need action and now. If they don’t then bugger them. Let the money be wasted. It’s about time the people realised the government is like one private organisation. They are only after your money and couldn’t careless about anything.

Sorry about the long post.

Posted by: Amir at March 16, 2004 05:08 PM

This one is going on on two fronts...

Amir, your point at the very beginning is worth raising because this lack of obvious pitfalls keeps raising its head. If it was obvious to those in the industry, why was it not obvious on paper? I can't really answer that except to say I don't think that there is one clear reason. So, in that case, the responsible thing to do is carry out in depth consultation...

If that happened, I didn't see any evidence of it. And if it did - they were misinformed.

It seems to me we are all broadly agreeing.

Posted by: Mark Ellott at March 16, 2004 05:27 PM

European legislation requires infrastructure costs to be identified. Sweden has a similar model to Britain, but other European countries have enabled a vertical structure to be introduced; at the same time identifying costs applicable to that asset. In Britain we made the wrong decision, but contractual obligations between various companies together with 'the I am right approach' mean that correcting the mess is very involved.

Posted by: Brian Hayes at March 20, 2004 03:35 PM