Network Rail privatisation "on the table"

[NSEFAN]

http://www.bbc.co.uk/news/business-34276868

The executive asked to come up with a plan to revive Network Rail's fortunes has said she cannot rule out recommending privatisation.

In an interview with the BBC, Nicola Shaw said that a partial or total sell-off "was absolutely on the table; it can't not be."

Ms Shaw was drafted in by the government after Network Rail's upgrade plans fell apart last summer.

Work to electrify key lines had been dogged by delays and mounting costs.
Ministers paused two of the projects, in the Midlands and across the Pennines, and replaced the chairman, while a number of reviews are carried out.

Ms Shaw, who is currently the boss of Britain's only high speed line, HS1, said there were a whole range of issues that had to be considered for her report, and she was keen to hear what people had to say.

She said she would also recommend changes to the regulator if necessary.

I don't think it matters where NR's debt is moved to. It will be the general public who ultimately have to pay for it, either through the farebox or subsidy. Is this just another number fudging exercise?

 

[yorksrob]

Indeed. You can bet your bottom dollar that the debt won't be privatised because no one will take it on. As with the previous privatisation fiasco, the railway infrastructure will require more money than it generates, although hopefully this time round the Government won't be so naive as to let it swing in the wind (or would it?).

All in all a completely pointless exercise with no benefit other than the Establishment's messianic faith that private ownership will suddenly result in a change in how efficiently an organisation is run.

 

[LNW-GW Joint]

The HS1 model seems to work (so far). https://en.wikipedia.org/wiki/High_Speed_1

In November 2010, the HS1 concession was awarded for a duration of thirty years to an investment consortium bringing together two Canadian public pension funds: Ontario Municipal Employees Retirement System (through its subsidiary Borealis Infrastructure ) and Ontario Teachers' Pension Plan [12] At the time, UK pension investors had generally limited interest for such long-term, illiquid, ‘infrastructure assets’

While the funds originally came from Canadian public bodies, the investment arms are classified as private.
Nicola Shaw is the CEO of HS1 Ltd, the Canadian owners of the concession. The HS1 freehold stays with HMG.
George Osborne is very keen to get UK pension funds to invest in infrastructure like HS2, and now no doubt Network Rail.
Network Rail maintains HS1 under contract to HS1 Ltd.

 

[yorksrob]

I suspect HS1 may work on account of being a new construction without much investment required in terms of renewals. I strongly suspect that the prospect may be different for an extensive Victorian network in need of renewal and expansion. The key thing for me is that HM Government is likely to continue to make the major investment in it, so what will the private sector bring, and more importantly what will it take out.

 

[PHILIPE]

Any Tory political dogma would ignore Hatfield and Potters Bar if Network Rail were to be put back into the hands of moneygrabbing private companies. .

 

[Stats]

The executive asked to come up with a plan to revive Network Rail's fortunes has said she cannot rule out recommending privatisation.

In an interview with the BBC, Nicola Shaw said that a partial or total sell-off "was absolutely on the table; it can't not be."

Yeah, because that went well last time.

 

[najaB]

Seeing as it isn't possible to run profitably and well at the same time, I hope that it is only 'on the table' as a paper exercise.

 

[GrimsbyPacer]

Is this just to ruin Corbyn's renationalisation plan?

 

[ainsworth74]

Is this just to ruin Corbyn's renationalisation plan?

Considering this review started quite a while ago I'm not sure how it could be.

 

[dk1]

Can we register for shares yet?

 

[PHILIPE]

Can we register for shares yet?

Shareholders before safety as in Railtrack days.

 

[HowardGWR]

Just to remind colleagues, what they call the 'debt' is what is called 'capital' in private companies. In other words, what NR owes the shareholders, in this case the taxpayer. I think some like to use the word 'debt' because it makes NR sound more impecunious. In fact the assets are considerable. Just think of the land value in city centres. Mind you, without a decent mass transit system to access them, what value is any of the City of London property, whoever owns it? I wonder if any of the press or politicians could be persuaded to have an adult discussion on these issues?

 

[Carntyne]

Shareholders before safety as in Railtrack days.

Yep. Madness this is being considered.

 

[Philip Phlopp]

Network Rail were themselves thinking about selling a minority stake, 25% has been mentioned, to an experienced infrastructure contractor, and allowing their junior partner to second staff to the Network Rail business for 2 or 3 years in an effort to get new experience into the business.

 

[LateThanNever]

Just to remind colleagues, what they call the 'debt' is what is called 'capital' in private companies. In other words, what NR owes the shareholders, in this case the taxpayer. I think some like to use the word 'debt' because it makes NR sound more impecunious. In fact the assets are considerable. Just think of the land value in city centres. Mind you, without a decent mass transit system to access them, what value is any of the City of London property, whoever owns it? I wonder if any of the press or politicians could be persuaded to have an adult discussion on these issues?

Good point. The review is a complete sham all round. Partuicularly as of course Shaw's own HS1 has loads of debt/capital and would never have been able to have been built without the taxpayers' financial subsidy!

 

[Elecman]

Maybe what is needed are professional railway engineers in the relevant disciplines (S&T, Civils and E&P as well as a very good Operator) sat on the NR Board then the correct decisions could be made!! There is no gain as others have said in Privatising NR as it would have to have its £38 billion written off by government first, as no private investors would take that albatross on.