Rail Industry Focus

01.07.16

Focus: No mandate to privatise

John Helm, a journalist, author of the rail blog 21stcentury-rail.com, and one of RTM’s digital columnists, looks at the thorny issue of network Rail asset sell-offs.

The government knows that full-blooded privatisation of Network Rail would be politically unacceptable. That option was considered but rejected by the Shaw Report but it now looks like partial privatisation is being ushered through the back door.

In order to plug the £1.8bn funding shortfall identified under the Hendy Review, Network Rail is coming under increasing pressure to dispose of assets, including depots, stations, power equipment, freight yards and other properties.

None of these assets could be described as non operational or surplus to current requirements. On the contrary, they are fundamental and integral to the day-to day operation of the railway (unlike some disused railway lands which would have little foreseeable future use or value).

Network Rail might meet short-term funding requirements by disposing of assets in this way, but it is likely to come at long-term cost. It would re-introduce fragmentation of the industry and would repeat many of the mistakes made when the rail infrastructure was originally privatised.

Current revenue streams enjoyed by Network Rail would become costs in future. The new owners would want their 10% (or whatever) cut and that would push up costs which would ultimately have to be met by the taxpayer and rail user.

And we could end up with the absurd situation when a future government would have to buy back assets at a much higher price. It seems some folk have learnt nothing and forgotten nothing.

But leaving aside these economic objections, the main objection must be that the government has NO mandate to sell off parts of Network Rail. It was not a 2015 Conservative election manifesto commitment.

There is a historical parallel here. When BR was originally franchised only the franchises were up for grabs; the privatisation of Railtrack (as it became known) was not in the 1992 Conservative election manifesto either.

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Comments

Tom   17/08/2016 at 01:54

I feel like this article is a bit biased but yeah, it would seem illogical in the long-term to sell off important assets. The main reason for them wanting to do so is the fact that Network Rail is the only public section of the railway and it's the least efficient. It would make more sense to me to make the managers more accountable. It's usually a management issue.

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