Nationalisation vs repatriation

[meridian2]

Fundamentally because comprehensive public transport as a whole cannot make a genuine profit. Therefore why would the private sector be interested unless they are propped up hugely by the public purse?

Indeed. I would argue the railways were never, nor could ever be re-privatised in the sense of being open to competition. There hasn't been sufficient track redundancy to enable that kind of competition for half a century. What we have is quasi-privatised railway where only the vinyls and uniforms change, in every other sense it's a monopoly.

 

[najaB]

Interesting (to me at least) that the status quo and full renationalisation are the clear favourites, and pretty evenly balanced. There doesn't seem to be much appetite for tinkering with the details.

 

[daikilo]

Interesting (to me at least) that the status quo and full renationalisation are the clear favourites, and pretty evenly balanced. There doesn't seem to be much appetite for tinkering with the details.

Naja, are your poll questions adequate? e.g. what are you proposing to nationalise? The ROSCOs (very expensive)? The TOCs (cheap, but only a franchise anyway)? NR (it is anyway, except the contract suppliers)? Freight?

 

[najaB]

Naja, are your poll questions adequate? e.g. what are you proposing to nationalise? The ROSCOs (very expensive)? The TOCs (cheap, but only a franchise anyway)? NR (it is anyway, except the contract suppliers)? Freight?

The focus is on TOCs at this stage.

 

[Clansman]

I voted 'Other', because I think a certain degree of Nationalisation would work on key Intercity routes (in a way similar to that of DOR with East Coast). But TOCs with more complex routes such as Northern I think full nationalisation would be too hot to handle for the government, as shown on these routes with BR. Instead, for these types of TOCs I would have a consortium built up by the local authorities of which the route serves, going 50/50 with a private British company. Private companies are good in the sense that they provide funding and experience whereas local authorities could try and act in the best interests of the public, and work directly with the private company to do so.

In the instance of full nationalisation, as said I would favour a DOR style approach. But I could only see this working with Intercity TOCs and less complex TOCs such as Scotrail.

Let the scrutiny commence

 

[sheff1]

I voted 'Other', because I think a certain degree of Nationalisation would work on key Intercity routes (in a way similar to that of DOR with East Coast). But TOCs with more complex routes such as Northern I think full nationalisation would be too hot to handle for the government, as shown on these routes with BR. Instead, for these types of TOCs I would have a consortium built up by the local authorities of which the route serves, going 50/50 with a private British company. Private companies are good in the sense that they provide funding and experience whereas local authorities could try and act in the best interests of the public, and work directly with the private company to do so.

Very similar to the current situation in some other European countries, but suggesting that 'foreign' ideas could be usefully implemented in the UK is consistently rubbished on this forum so I won't bother.

 

[WatcherZero]

Interesting (to me at least) that the status quo and full renationalisation are the clear favourites, and pretty evenly balanced. There doesn't seem to be much appetite for tinkering with the details.

Yes same to me but those other options add up, with a different interpretation 2:1 people are in favour of privatisation as it stands or with minor alterations as opposed to nationalisation.

 

[HowardGWR]

It would be fine if they actually did invest anything in our railways. Don't kid yourself - they're only here to hoover up subsidies and make an easy profit.

You are Mick Cash and I claim my...........

 

[PeterC]

What I'd be more interested in is restructuring to reduce TOC independence and create a genuine single network with a single set of products and a unified branding more like ScotRail, so TOCs can stop spatting among themselves over fewer than 10% of the travel needs of the UK and start hitting the car hard and winning passengers from there.

Agree, I have no issue over different operators running different lines but that should be transparrent to the passenger. A train should just be a train in the same way that a bus is just a red bus in London despite different companies running different routes.

 

[daikilo]

The focus is on TOCs at this stage.

How can you "nationalise" a "time-limited" TOC franchise selected by the DFT. DOR was not a nationalisation, it was a temporary step-in.

 

[Railsigns]

You are Mick Cash and I claim my...........

Because you'd have to be a tub-thumping union leader to view the private sector operators as anything other than benevolent do-gooders deserving to be lavished with praise and gratitude by all they willingly serve, financial gain being the last thing on their minds?

 

[najaB]

How can you "nationalise" a "time-limited" TOC franchise selected by the DFT. DOR was not a nationalisation, it was a temporary step-in.

By not re-letting the franchises when they expire.

 

[Moonshot]

I don't know what the number of domestic air commuters is, but I'd imagine it's tiny compared to rail. So on the basis that interior UK air flights are not essential for the normal running of the country, I have no strong opinions either way. How about you?

What i was trying to get at was that not so long ago, the state controlled airports and the flag carrier. Since " open skies " policy was intoduced, air travel is flourishing particularly the likes of easyjet and Ryanair. Whilst rail Uk is probably not ripe for full privatisation, I cannot argue with the fact that rail passenger numbers are now at record levels ever since competition for franchises was introduced. If the aim was to put " more bums on seats " since the last days of BR, i would say that has been achieved, and shows no sign of stopping.

 

[Chester1]

The limited foreign investment option is used within the EU for airlines. A non EU based company is limited to less than half ownership. That is why Etihad Airlines owns 49.9% of the new Alitalia (original company went bankrupt and new one nearly did). That model could work for privatised infrastructure.

 

[Clip]

I voted 'Other', because I think a certain degree of Nationalisation would work on key Intercity routes (in a way similar to that of DOR with East Coast).

What did DOR do differently than NXEC?

 

[HH]

Who's going to invest a pile in the railways when they can't make any decisions?

 

[Deepgreen]

What did DOR do differently than NXEC?

Payments to private shareholders.
--- old post above --- --- new post below ---

Who's going to invest a pile in the railways when they can't make any decisions?

Decision-dithering is not the issue - the impossibility of genuine profit-making (essential for genuine private investment), is.

 

[HH]

Decision-dithering is not the issue - the impossibility of genuine profit-making (essential for genuine private investment), is.

I wasn't talking about dithering, I was talking about control. The lack of control (because it's all in the vice-like grip of the DfT) makes it hard to guarantee a return on investment.

 

[tbtc]

Some people want the status quo, some people want nationalisation. Fair enough. But (without giving the numbers away for those yet to vote), some people want a privatised set up where we restrict bids from foreigners (or from foreign governments).

If you fall into that category, I’d be fascinated to know who you think should be bidding instead of the Germans/ Dutch/ French/ Italians etc?

Would you only have First/ Stagecoach/ Go-Ahead/ National Express bidding wholly independently (until one of them is snapped up by a foreign operator, like Arriva were)? Because these firms have lost several bids where the winner was (at least partly) “foreign”. So you are relaxed about bids that are worse value for taxpayers/ offer less to passengers (because you’d be removing the competitive bids from Keolis/ Abellio etc)?

You’d rather that recent franchises were awarded to the third best bidder (because the best two were “foreign” bids)? You’d rather that we paid higher subsidies to other organisations (or received lower premiums from them), instead of having experienced railway providers providing our services at the best price?

Or are there other bidders who should be competing (but aren’t)? Outsourcers like G4S? Vulture capitalists like hedge fund managers? Take away the “foreign” bids and accept a closed shop of First/ Stagecoach/ Go-Ahead shortlisted and winning everything? So more monopolies, less competition, poorer value for passengers/ taxpayers?

As I’ve said, I understand the argument for nationalisation – what I don’t understand is the argument for a restricted privatisation that removes the better bidders (the organisations with experience of running trains, the supposed benchmark railways that most threads compare the UK to)? Why?

I'm not ideologically wedded to wholesale nationalisation, but I believe essential utilities and transport infrastructure are vital for the nation and should be in public ownership. I'd let franchises lapse and take the associated network back at renewal time

Would you include Air Travel as part of the transport infrastructure ? Should airports be like rail stations ?

Good question re air travel - a lot of bus stations and airports have more passengers than train stations but seem to work fine in the private sector

NS, DB and SNCF don't bid for franchises to help the railways here, they do it to make money

Yes, they are only doing it for the profit. Just like First/ Stagecoach/ National Express are. Just like Sea Containers/ Laing/ 3i etc used to. But some people seem to be okay with profit being made, as long it’s not profit made by foreigners.

I don’t particularly mind whether the “3%” is going to a bus company registered in the UK or a subsidiary of a foreign government – I’m more interested in a wide field of bidders to ensure a competitive market where passengers and taxpayers get the best possible deal. And having experienced train operators bidding for franchises seems like A Good Thing to me.

Blaming Abellio/ DB etc for only being interested in profit seems a weak argument when *all* bidders are surely only doing it for the profits.

What did DOR do differently than NXEC?

At least NXEC had ambition (e.g. hiring 180s for a planned bi-hourly Lincoln service). DOR didn't seem particularly interested in such expansion (or even, with no commercial incentive, to be too fussed about ticket collection).

Still, DOR gave out free tickets for "loyal" passengers so people loved them.

 

[Robertj21a]

-----Edit-------

Yes, they are only doing it for the profit. Just like First/ Stagecoach/ National Express are. Just like Sea Containers/ Laing/ 3i etc used to. But some people seem to be okay with profit being made, as long it’s not profit made by foreigners.

Well said. How on earth is it any different in practice ?

If First/Stagecoach/National Express make a profit the shareholders [individuals, Pension Funds etc] will usually be entitled to a dividend payment - do people really believe that none of those shareholders is a 'foreigner' ??.

 

[Astradyne]

Well said. How on earth is it any different in practice ?

If First/Stagecoach/National Express make a profit the shareholders [individuals, Pension Funds etc] will usually be entitled to a dividend payment - do people really believe that none of those shareholders is a 'foreigner' ??.

National Express`s largest shareholder is Spanish.

If the Scots get there way Stagecoach and First will be foreign ... So then what?

Those percentages in the pole add up to well over a 100%

Not aimed at direct reply to quoted post ... more supplementary supporting post.

 

[quantinghome]

I wasn't talking about dithering, I was talking about control. The lack of control (because it's all in the vice-like grip of the DfT) makes it hard to guarantee a return on investment.

No passenger railway anywhere in the world makes a genuine commercial return on investment. Japanese high speed rail might be the exception, but even that's debated.

In the UK, pre-nationalisation, rail companies made their money on freight. The main reason BR started to make losses was the decline in freight, not in passenger traffic. From Beeching through to Serpell, many attempts were made to find a profitable core to the UK passenger network. The eventual conclusion was that if there was one, it would be very small, and not very profitable. Hence the eventual realisation from the government that subsidies would always be needed.

If passenger railways COULD make a viable return on investment, someone somewhere would have done it. But they haven't, hence the near-universal requirement for significant government subsidy. By contrast, freight railways are commercially profitable, which is why the US continues to have a huge freight network running privately.

 

[Railsigns]

By contrast, freight railways are commercially profitable, which is why the US continues to have a huge freight network running privately.

I doubt that a freight-only railway in the UK could ever be profitable, given the competition from road transport. It's different in the US because of the huge distances involved.

 

[Clansman]

Baring in mind I did say, "similar", when reffering to DOR.

I was more highlighting the financial stability, the return of money to tax payers and the reward scheme.
I would change how much profit goes straight back into the franchise operations, to allow future expansions and enhancements in service in general.

 

[meridian2]

Can anyone imagine all the roads being privatised? I can't, except for a few toll routes. They're seen as an "investment". Rail on the other hand is subsidised. The inference contained in those two words reveals successive government's attitude to rail travel.

To complaints about pricing and service, one rail spokesmen said before Christmas that people aren't forced to live away from work, they can always move. I believe that's completely unrealistic for a number of reasons. The country as a whole has to get used to the idea that national rail transport infrastructure will cost the tax payer, and does benefit the nation.

 

[daikilo]

No passenger railway anywhere in the world makes a genuine commercial return on investment. Japanese high speed rail might be the exception, but even that's debated.

In the UK, pre-nationalisation, rail companies made their money on freight. The main reason BR started to make losses was the decline in freight, not in passenger traffic. From Beeching through to Serpell, many attempts were made to find a profitable core to the UK passenger network. The eventual conclusion was that if there was one, it would be very small, and not very profitable. Hence the eventual realisation from the government that subsidies would always be needed.

If passenger railways COULD make a viable return on investment, someone somewhere would have done it. But they haven't, hence the near-universal requirement for significant government subsidy. By contrast, freight railways are commercially profitable, which is why the US continues to have a huge freight network running privately.

When Intercity was created they were supposed to generate a positive return, and did. I do not know whether that included depreciation of stock.

In the govt paper on franchises from December, the majority of franchises are supposed to generate a positive return (net payments), presumably after track-access charges.

 

[quantinghome]

When Intercity was created they were supposed to generate a positive return, and did. I do not know whether that included depreciation of stock.

In the govt paper on franchises from December, the majority of franchises are supposed to generate a positive return (net payments), presumably after track-access charges.

The track access charges do not reflect the true cost of running the track. Network Rail receives £4billion grant per year from the government.

I understand intercity did make a profit on paper; like you, I'm not sure whether it included depreciation, for stock or the infrastructure.

 

[HH]

The track access charges do not reflect the true cost of running the track. Network Rail receives £4billion grant per year from the government.

I understand intercity did make a profit on paper; like you, I'm not sure whether it included depreciation, for stock or the infrastructure.

I haven't seen the latest figures, but at one point FCC was making a profit for the government (beyond anything that First made), even taking into account the Network Grant.

The real question is, can you treat any part of the network as a single entity?

 

[al78]

Can anyone imagine all the roads being privatised? I can't, except for a few toll routes. They're seen as an "investment". Rail on the other hand is subsidised. The inference contained in those two words reveals successive government's attitude to rail travel.

To complaints about pricing and service, one rail spokesmen said before Christmas that people aren't forced to live away from work, they can always move. I believe that's completely unrealistic for a number of reasons. The country as a whole has to get used to the idea that national rail transport infrastructure will cost the tax payer, and does benefit the nation.

Roads are classed as an essential. If the road network shut down overnight it would have catastrophic effects. If the rail network shut down overnight it would affect, about 5% of journeys? The impact would not be as great, so maybe there is a feeling that railways are something nice to have rather than a necessity.

The problem is that all this talk of return on investment only ever seems to consider money, not social costs and benefits. If everybody who works in London boycotted the trains and all decided to drive to work what effect would that have on the road network in Greater London? If more people use trains as an alternative to driving there are social benefits through less pollution fewer accidents and less congestion on the roads for those who really don't have an alternative, but these (fallaciously) never seem to be included on the account books.

 

[quantinghome]

Roads are classed as an essential. If the road network shut down overnight it would have catastrophic effects. If the rail network shut down overnight it would affect, about 5% of journeys? The impact would not be as great, so maybe there is a feeling that railways are something nice to have rather than a necessity.

I'm not so sure. The road network serves a range of different types of journey. Railways are more specialist. They will never be used instead of bin lorries, delivery vans, popping to the local shops and so on. However, on the journeys they are intended for, a rail shut down would be pretty catastrophic - witness Southern Rail at the moment as an example.

The problem is that all this talk of return on investment only ever seems to consider money, not social costs and benefits. If everybody who works in London boycotted the trains and all decided to drive to work what effect would that have on the road network in Greater London? If more people use trains as an alternative to driving there are social benefits through less pollution fewer accidents and less congestion on the roads for those who really don't have an alternative, but these (fallaciously) never seem to be included on the account books.

I agree. In fact it may be the case that no transport mode is trully commercially viable. Warren Buffett has some good lines on the airline industry: "Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down." (Not sure what Keith Harris would have said:roll

Jet liners were only possible because their development was paid for by defence budgets. Likewise, construction of the big ocean liners were subsidised by governments who saw their usefulness as troop carriers.

My conclusion to all this is that passenger transport is a necessity, but not something that can ever be run by private companies on a fully commercial basis. That, plus the intricacies of the wheel-rail interface, suggests to me that we need a vertically-integrated, publicly-owned rail system. Private input would be best served through a concession system like the London Overground, but even then it should be compared to a publicly-run alternative.