Re: Question about privatization

[Anthony New <amn@wsi.no.junk>]

Nick Fotis wrote:
> 
> Hello,
> 
> I would like to use some background material for an article I'm writing
> regarding railroad privatization. I have some material about USA and
> Europe,
> but it's pretty outdated (nearly a decade old book), so I would like to
> ask where (Web pages) to search for more current information (especially
> Europe, regarding the European Union's directive 91/440 about railroad
> privatization).
> 
> Typical questions are: historical background of privatization attempts,
> what are/were the results (especially with statistical numbers), etc.
> 
(snip)

Big subject - people have written books about it. IMHO the salient
points were (as non-politically as I can put them):

1.  Industrial problems in the 1970's made successive Tory governments
deeply suspicious of all nationalised industries.
2.  Most of the nationalised industries were absorbing large amounts of
public cash.
3.  Widespread pressure to spend more on Hospitals, Education, Social
security, etc, combined with Tory desire to achieve tax cuts made
privatisation attractive.
4.  Previous privatisations had been largely successful (in their own
terms, at least)
5.  Government priorities made it impossible to fund the investment
really needed by BR, and public spending rules made it impossible for BR
to raise cash in the market.
6.  Changing economic conditions at the time of the proposed
privatisation made (or were considered to make) privatisation in
sensibly sized operation-based chunks very risky due to the few people
who could/would have bid for them.
7.  It was considered that the only firms who would bid serious money
for the railways were the many existing transport firms, mainly bus
companies; therefore BR had to be cut up into small enough pieces for
them.
8.  This fragmentation would make it particularly difficult for an
incoming Labour government to carry out its threat to renationalise the
railways, despite a franchising system which would allow the government
to keep some control (governments love control).
9.  Any major reorganisation creates some chaos - this large a change
predictably  caused plenty.
10. Arguably the bus companies didn't have a clue how different running
a railway was from a bus line.
11. Equally arguably they didn't realise how run-down much of the
rolling stock was either.
12. Also arguably they didn't realise (and still don't) that people
paying high prices for train travel expect a fundamentally different
class of service provision from those who habitually travel by bus.
13. Increasing road congestion is making more and more people consider
travelling by train.
14. Franchise periods (only seven years!) and ecomonomics prevent the
TOCs (train operating companies) from purchasing and maintaining large
amounts of spare stock to cope with possible increases in traffic, so
congestion rules.
15. Franchise holders negotiate to increase franchise periods to allow
them to invest properly in stock.
16. Some TOCs decide to cut staff (both numbers and skills) to reduce
their cost base.
17. Competition being (IMHO) a transitory and un-natural state of
existance (C. Darwin notwithstanding), mergers and failures are/will
reduce the numbers of TOCs back to a (more) sensible level.
18. There's always a chance that the organisations running the railways
will gradually improve their understanding and performance to achieve a
fast, modern, efficient, pleasant, and comfortable railways within a fey
years, but . . .
19. Some may find it more profitable to replace their train services
with bus services instead ("Bustitution").
20. Public pressure is building as people's expectations grow and they
get more used to complaining - something must give eventually.


This sequence of events has produced a typically British muddle - make
of it what you will but don't bother comparing it with other countries -
no one in British politics seems to give a damn how things are run
elsewhere, nor seems to have any "vision-thing" of how a wonderful
future could be obtained. Doubtless others will have their own views on
the subject, but this should give you some ideas. Best of luck with the
article.


-------------------------------------------------
Anthony 
Replace "no junk" with "co uk" to reply