Splitting Britrail Not Such a Good Idea Afterall

Not directly Amtrak, but relevant in light of NE corridor split suggestions.

From The Guardian (UK)

• The Conservatives will today (July 17) admit that the privatization of the railways under John Major in the 1990s was a mistake that inflicted costs on both passengers and the taxpayer as well as hindering expansion, according to this report published by The Guardian.
  
  Launching a Conservative Rail Review today the shadow transport secretary Chris Grayling will say that privatization pushed up the cost of running the railway system -- and hence fares -- and the party will not seek to re-privatize the system if it returns to power.

http://politics.guardian.co.uk/conserva ... 99,00.html

We should savour this "sorry" from the Tories, as it is rare for politicians to admit a mistake.

Some of the error has been retrieved. Railtrack was a shareholder owned company, but was incompetent. It sub-contracted most of its core businesses, especially maintenance. People used to note that its board had no engineers, but lots of experts in retail business.

The first thing they did was to put more shops in the big London stations.

A series of fatal accidents were what did for the company. The last one involved lack of maintenance on a high speed track north of London. The track simply disintegrated. The criminal aspect of this was that the contractor knew it was dangerous but failed to repair it or make it a priority.

The new company is Network Rail. In theory it is a cooperative. In reality it is state owned. One day the National Audit Office will declare that its debts are really part of the National Debt, which Brown wants to avoid.

It has terminated many of the maintenance contracts and now employs engineers directly. This eliminates many of the Contracts which did so much to inflate costs. NR is bringing the costs down - though there is a lot to do.

The Tories thought they were bringing in private enterprise for running the trains. In fact the freedom of action of the franchisees is very limited.

The most obvious effect on me, as a potential traveller is that walk-on fares have escalated a great deal. It is only possible to get affordable fares by booking in advance. I travel much less than I used to (but passenger numbers are up, so someone is travelling).

I think there are far too many companies extracting profit from the system. For example the Train Leasing companies charge for the trains they lease to the Train Operating Companies. This means lots of contracts. The good side is that the trains are now much younger as so many have been renewed, and older ones retired. The bad side is that it is difficult to start new services, and extra trains for special events are difficult.

Governments tend to contain a lot of lawyers. The privatisation was very good news for lawyers as there are thousands of contracts between businesses that used to be part of a single organisation.

Apart from replacing Railtrack, Labour has not done much to disturb the original structure. However, they have reduced the number of franchises, so that there are fewer but larger. Is this good? Several companies have lost franchises - most notoriously the mainly French Connex which lost two important contracts for poor service.

One serious lack is that there is no planning function. British Rail could plan new lines, and look ahead. Electrification has ceased, though several small schemes to complete the network would be useful. We need a High Speed Line to the North. There is no-one to plan it, except in the Department of Transport, where they are notorious for doing nothing.

I think that it can serve as a warning not only about splitting the NEC but also about privatizing Amtrak will lead to higher fares.

Things like this re-enforce my belief that privatization of certain things can be a very bad thing.

gprimr1 wrote:I think that it can serve as a warning not only about splitting the NEC but also about privatizing Amtrak will lead to higher fares.

Splitting the NEC from the rest of the national network is not the same - it would simply create two distinct agencies, one focused on both the operations and infrastructure maintenance of the NEC - another focused on providing a national intercity rail network.

And privatizing Amtrak will not automatically lead to higher fares. One need only look at the history of the last 30 years of the breakup of corporate monopolies and deregulation that demonstrates that the general public have benefited from lower prices. Only the abuse of deregulated power (i.e. Enron) has caused the inverse - and the only way a privatized Amtrak could do that would be to force passengers to travel from Chicago to Milwaukie, then to St. Louis, then to Orlando (via New Orleans), then to Boston - to get to Los Angeles (a reference to the power grid manipulation).

I will admit that I am to young to know what life was like before deregulation so the only real images I've seen of it are Enron.

But also, in Maryland, deregulation has sent our energy prices souring so I'm a bit pessemistic towards deregulation.

Mr. Matthews provides an excellent overview of the experiment with the privatization of the British rail network. During my fairly recent travels in the UK during the past few years (every 6 months or so from 2000-2005), what struck me most was the sheer complexity of the privatized system and the difficulty of effectively managing such a complex system. That there were some serious service (safety) issues and no cost savings (cost increases, actually) is not a surprise. In spite of these minor criticisms, most Americans would be surprised at the frequency, speed, and punctuality of the majority of British rail services. However, running something remotely similar in the U.S. would be next to impossible without substantial increases in funding.

While some of the new British rolling stock is an improvement over that which it replaced, I was most disappointed in the Virgin Voyager trainsets and nearly as much with the Virgin Pendolino's. I think passenger comfort was better in the older HST trainsets (more seating capacity, greater and more usuable luggage space, more toilets, for example). While colorful and glitzy, I don't think the loss of basic passenger comfort was offset by the slightly faster schedules that this tilt-train equipment provided. As I recall, there were also some issues with the greater electrical demands of new equipment slated for service on Southwest Trains and whether there was sufficient electrical capacity to operate these new trains. Would this have happened if infrastructure and operations had remained integrated as under British Rail?

In terms of different entities providing rolling stock, there are some parallels with Amtrak with California providing the excellent Surfliner equipment, Midwest services mostly relying on older Amtrak-provided Horizon and Amfleet equipment, and Oklahoma and Maine relying mostly on "captive" older equipment specific to those services.

The goal of Amtrak's biggest critics seems mostly to operate rail services without subsity, something most passenger transportation anywhere by any means is unable to achieve. While it may be possible to selectively borrow portions of the British privatization model to improve American passenger rail services, the goal of these changes must not be an overall savings of money but instead of improved service and utility. If the goal is mostly to save money, you might as well shut down Amtrak and further reduce (albeit slightly in many areas) the already declining travel options of Americans.

It certainly is good to look at foriegn examples , when deciding what to do with amtrak .
I think the biggest lesson from Britain , is that the track must remain government owned and maintained .privatising the nec would be a big mistake . As britain and new zealand found out .
But i do think there is room to contract out other services . one example is reservations , as is been proposed . Franchises are already running commuter services . theres no real reason why they can't run longer services . But i wouldnt expect huge savings , if any , or necessarrily better service . it certainly wouldnt mean the end of subsidies .

The article specifically said We think, with hindsight, that the complete separation of track and train into separate businesses at the time of privatisation was not right for our railways. That is a cautionary tale for those who are anxious to split the NEC into two or more entities; this, too, is what Mr. Gunn warned against; this, too, is what was specifically not done in Japan when it privatized.

SDGreg wrote:
While some of the new British rolling stock is an improvement over that which it replaced, I was most disappointed in the Virgin Voyager trainsets and nearly as much with the Virgin Pendolino's. I think passenger comfort was better in the older HST trainsets (more seating capacity, greater and more usuable luggage space, more toilets, for example). While colorful and glitzy, I don't think the loss of basic passenger comfort was offset by the slightly faster schedules that this tilt-train equipment provided. As I recall, there were also some issues with the greater electrical demands of new equipment slated for service on Southwest Trains and whether there was sufficient electrical capacity to operate these new trains. Would this have happened if infrastructure and operations had remained integrated as under British Rail?

New trains were ordered for the three parts of the former Southern Third Rail network. It seems to have been rather late before it was discovered that they had larger power demands, and different characteristics too for the use of that power. It was then necessary, rather late, to renew the whole power supply, with new sub-stations and so on. I don't know who was to blame, but perhaps the new system had no formal method for rolling stock suppliers to consult with the power suppliers (Railtrack, as it tyhen was).

Yes, the new trains are in general less comfortable. There are no longer seat benches on which one can snooze on late night trains. But they are cheaper to maintain (it is claimed). Also some air conditioning.

I think the lanquage suggests how difficult this is for the conserative party to deal with . In the westminister style of parliament , the worst thing for the opposition party is when the governing party does something they agree with . ( buying back the railtrack system ) . Even worst , having to admit it was a mistake to sell it when they were in power in the first place . the timing is probably significant , its a few years to the next election .
So it is fair to say , it was a huge mistake . But they don't say franchising the train operating companies was a mistake , and will continue that system if they win power .
so i stick to my first post , it is crucial that the government retains the nec trackage , and control of it , but i would be less concerned if they privatised or franchised the operation of the train services .
In effect that is already in operation , with several commuter agencies ofering service on the NEc , which in a limited way already competes with Amtrak on the lower end of the market .

David Benton wrote:It certainly is good to look at foriegn examples , when deciding what to do with amtrak .
I think the biggest lesson from Britain , is that the track must remain government owned and maintained .privatising the nec would be a big mistake . As britain and new zealand found out .
But i do think there is room to contract out other services . one example is reservations , as is been proposed . Franchises are already running commuter services . theres no real reason why they can't run longer services . But i wouldnt expect huge savings , if any , or necessarrily better service . it certainly wouldnt mean the end of subsidies .

Here is Simon Jenkins, also in the Guardian, on the Tory "apology".
http://www.guardian.co.uk/Columnists/Co ... 28,00.html

>>The sinner has repented, albeit 15 years too late. The cost in underperformance, delay, waste and subsidy has been incalculable and unaccountable. In Britain, when you commit a fraud costing thousands you go to prison. When you bring a great industry to its knees, costing billions through incompetence, you get a job in a City bank. That is where those responsible for rail privatisation were ensconced: Lord Lamont (Rothschild), Lord Macgregor (Hill Samuel) and the scheme's architect, the Treasury's Sir Steve Robson (Royal Bank of Scotland). All were warned that the 1993 Rail Act would be a disaster. Rubbish, they said, they knew better. I hope the banks are counting their spoons.<<

I mentioned to a Network Rail official the other week, dispite all the cries from the public that British Rail has fallen into such disrepair over the years, what they have is much better than what we have in the States. He was upset there weren't any reporters around to catch my statement.

A couple of station managers I spoke to said that dealing with the wishes of the various operating companies takes a lot of effort.

It should be rememebered too , that newspapers are pretty much "left or right" ,in Britain . Gaurdian is very much to the left , so it would be interesting to read the daily telegraphs( the torygraph) take on it . The independant as it s name suggests , tries to give the middle view .

Okay, on this subject we have to be very careful in our analysis. Despite all the complaining, in fact the British railways are among the safest in the world (and this despite RailTrack's acknowledged incompetence).

Ridership on British trains is at its highest level since 1948, despite complaints about high prices. Can Amtrak make that claim?

So it's hard to dismiss privatization as a "failure". Failures don't usually generate lots of new ridership.

So what did fail? Well, Railtrack did. In part, though, it wasn't their fault. The Tories handed them a contract structure that was very difficult to manage. They then chose not to try to manage it at all. For example, the contractors had no targets for track component replacement (e.g. so many track miles of rail per year). Costs were grossly underestimated. But the most difficult part of "open access" is deciding what level of investment is needed to support the services that use each route, and then dividing the cost fairly among the users. That makes lots of work for consultants (which I like, being a consultant) but is probably not a very efficient resource allocation mechanism.

The Northeast Corridor is already "open access" in the sense that Amtrak has lots of tenants, and they are involved in the planning process for imprvements. But Amtrak has the final decision-making power. So separation of the NEC from the rest of the network wouldn't really change much. The main things it would do are:

1) Silence all the critics, like URPA, that claim Amtrak makes money on its LD trains and uses the profit to subsidize the NEC
2) Make it a whole lot easier to discontinue the LD trains

David Benton wrote:It should be rememebered too , that newspapers are pretty much "left or right" ,in Britain . Gaurdian is very much to the left , so it would be interesting to read the daily telegraphs( the torygraph) take on it . The independant as it s name suggests , tries to give the middle view .

Here's an article from the Independent.
http://news.independent.co.uk/uk/transp ... 183387.ece

Extract: Did the original structure imposed by the Tories work?

Nobody thinks so - as of yesterday, not even the Conservatives do. The party's transport spokesman, Chris Grayling, said: "We think, with hindsight, that the complete separation of track and train into separate businesses at the time of privatisation was not right for our railways. We think that the separation has helped push up the cost of running the railways - and hence fares - and is now slowing decisions about capacity improvements. Too many people and organisations are now involved in getting things done - so nothing happens."