Should GBR have a freight business? Is the sale of DB Cargo UK an opportunity to acquire one?

[coppercapped]

I can assure you that acts of mind-blowing and utterly staggering acts of blithering incompetence are also found extensively within the private sector.

Yes, agreed. And you don't have to assure me - I have worked in the private sector my whole working life.

However your statement is what is called a non sequitur as it doesn't respond to any of the points I was making.

...but nevertheless, taking up your point, if these blithering incompetent acts deleteriously affect the financial situation of the company over a significant period it goes bust and the resources (human, capital and intellectual) are employed elsewhere.

 

[furnessvale]

I can assure you that acts of mind-blowing and utterly staggering acts of blithering incompetence are also found extensively within the private sector.

Very true, but when that happens the cost rarely falls back onto the taxpayer.

 

[Dr Hoo]

Very true, but when that happens the cost rarely falls back onto the taxpayer.

Hmm… Unemployment payments and other ‘benefits’. Then there’s often the issue of remediation of sites that a bankrupt and defunct organisation cannot be pursued for.
More in the context of this thread; suppose that rail freight is allowed to wither and die as a matter of ‘policy’. That would then damage the wider economy, require more road haulage with associated risks and congestion, etc.
How would that not affect The Taxpayer?

 

[furnessvale]

Hmm… Unemployment payments and other ‘benefits’. Then there’s often the issue of remediation of sites that a bankrupt and defunct organisation cannot be pursued for.
More in the context of this thread; suppose that rail freight is allowed to wither and die as a matter of ‘policy’. That would then damage the wider economy, require more road haulage with associated risks and congestion, etc.
How would that not affect The Taxpayer?

Your comments open the context far wider than the post on which I commented.

On that basis, no private enterprise should be permitted to fail and should be put on the same footing as public enterprises.

 

[Merle Haggard]

Very true, but when that happens the cost rarely falls back onto the taxpayer.

Royal Bank of Scotland required a taxpayer bail out of about £45,000,000,000 ...
But, as you say, rare.
Just as well really.

 

[coppercapped]

Hmm… Unemployment payments and other ‘benefits’. Then there’s often the issue of remediation of sites that a bankrupt and defunct organisation cannot be pursued for.
More in the context of this thread; suppose that rail freight is allowed to wither and die as a matter of ‘policy’. That would then damage the wider economy, require more road haulage with associated risks and congestion, etc.
How would that not affect The Taxpayer?

Straw men. One of the intentions of unemployment benefits was to act as a safety net for people who had lost their jobs. That is acceptable and is a necessary feature of a civilised society and has been since the Beveridge Report (officially called Social Insurance and Allied Services) in 1942. As for site remediation (which does not occur very frequently now as most of the old polluting industries have long gone) this is generally a matter for the new owners.

There is no actual or proposed policy calling for rail freight to wither and die. Quite the contrary as can be seen in government statements concerning Great British Railways. However with no contractual requirement between government and GBR the danger is always the law of unintended consequences and short term shifts in the government's position or funding may make some existing freight flows uneconomic or frighten off potential customers.

The point is that 'policies' and 'strategies' do not generate ton-miles (or tonne-kilometres if you prefer). The only thing that does are 'sales' and that means that the incentives on both the supplier's and the customer's side must be aligned. 'Incentives' may not only be financial but also could mean that the framework within which the deal has been made is stable for at least as long as the period of the contract.

Royal Bank of Scotland required a taxpayer bail out of about £45,000,000,000 ...
But, as you say, rare.
Just as well really.

Yup. But as can be seen from the government's web page https://www.gov.uk/government/news/government-completes-exit-from-natwest--2 the Exchequer has recovered some £35 billion through share sales, dividends and fees. While this is admittedly some £10 billion less than the original support, the alternative would have been a banking collapse with far greater economic costs and social consequences. In the meantime the legal framework has been changed to separate retail banking from other activities so a repeat is unlikely to occur. People learn.

 

[Magrar]

GBR needs full control of freight for the following really rather obvious reasons imho....in no particular order:

1. GBR cannot be a guiding mind deciding where and when to priortise one type of traffic over another on state owned infrastructure, when one type of traffic is a fully subsidised state run affair, the other a privatisation era market led effort.

2. The provision of internal network services at peak efficiency.

3. National security of key flows, notably steel and fuels, old and new.

4. The efficient procurement of rolling stock. If GBR will be reaping these benefits in passenger orders, it will reap them in freight too.

5. Innovation in economic growth. The market alone has consistently shown it cannot innovate quickly enough to meet rapidly emerging opportunities and changing circumstances. It always requires massive injection of public funds and expertise. So cut out the middle man.

6. Planning. GBR being a public body with strategic importance, can be prioritised by planning departments, with it being quite obvious that rail freight is heavily dependant on bricks and mortar, or indeed, steel and utilities.

7. Intermodal switch. It is high time we recognised that cost is not the only factor in how we move goods of less than trainload weight. So with a state provider of perfectly functional intermodal services of strategic importance, such as supermarkets and industrial manufacturing, it becomes more morally acceptable to compel the likes of Amazon to either be part of the solution, or pay handsomy for using public roads and low paid workers in such daftness as the mass transport of plastic junk.

 

[furnessvale]

Royal Bank of Scotland required a taxpayer bail out of about £45,000,000,000 ...
But, as you say, rare.
Just as well really.

That was a political choice I would not have made. I would have used a fraction of that money to compensate the customers directly. Even that choice goes against what I have said, but confidence in the banking sector was essential.

 

[LNW-GW Joint]

No, we already have a state freight operator (DRS) who bids for commercial contracts so why duplicate.

DRS is part of the nationalised Nuclear Decommissioning Authority and runs nuclear trains as part of that remit, with additional commercial traffic to complement its core business.
It operates as an open access FOC like all the others, and does not report to the DfT except via the regulator (ORR).

 

[Mikey C]

That was a political choice I would not have made. I would have used a fraction of that money to compensate the customers directly. Even that choice goes against what I have said, but confidence in the banking sector was essential.

There could have been a complete financial meltdown without the government intervening.

And, like the money "wasted" during COVID, it's not as if the government had months to think about things, and weigh up the pros and cons.

 

[RT4038]

GBR needs full control of freight for the following really rather obvious reasons imho....in no particular order:

1. GBR cannot be a guiding mind deciding where and when to priortise one type of traffic over another on state owned infrastructure, when one type of traffic is a fully subsidised state run affair, the other a privatisation era market led effort.

2. The provision of internal network services at peak efficiency.

3. National security of key flows, notably steel and fuels, old and new.

4. The efficient procurement of rolling stock. If GBR will be reaping these benefits in passenger orders, it will reap them in freight too.

5. Innovation in economic growth. The market alone has consistently shown it cannot innovate quickly enough to meet rapidly emerging opportunities and changing circumstances. It always requires massive injection of public funds and expertise. So cut out the middle man.

6. Planning. GBR being a public body with strategic importance, can be prioritised by planning departments, with it being quite obvious that rail freight is heavily dependant on bricks and mortar, or indeed, steel and utilities.

7. Intermodal switch. It is high time we recognised that cost is not the only factor in how we move goods of less than trainload weight. So with a state provider of perfectly functional intermodal services of strategic importance, such as supermarkets and industrial manufacturing, it becomes more morally acceptable to compel the likes of Amazon to either be part of the solution, or pay handsomy for using public roads and low paid workers in such daftness as the mass transport of plastic junk.

I can't imagine any business that wants its raw materials or products moved around the country would welcome that.

 

[Invincible]

I see DB Cargo UK has had some news:
Network rail are suing it for a derailment

Network Rail sues companies for £5m over Llanegennech derailment

More than 400,000 litres of fuel spilled in the area causing an "environmental disaster".

www.bbc.co.uk

it has gained some extra DRAX paths (good news)

DB Cargo gains extra Drax freight paths from 2027

DB Cargo UK is set to take over several freight paths used for Drax power station, RAIL understands, after winning the contract from GB Railfreight (GBRf).

www.railmagazine.com

And the Government has issued a statement about union comments on redundancies in Yorkshire if sold

DB Cargo UK sale: Government issues statement after union call for guarantee of no redundancies

The Government has said it understands “concern” from workers who could be affected by the planned sale of Yorkshire-based rail freight firm, DB Cargo, after transport union TSSA last week called for a guarantee of no compulsory redundancies from the sale.

www.yorkshirepost.co.uk

these last 2 websites are behind paywalls, can't find a paywall free post of the Government statement
but from

There are fears for Doncaster jobs after a rail freight operator was put up for sale

There are fears for jobs across the company

www.doncasterfreepress.co.uk

Not behind a paywall, reports of talks with potential buyers (not yet named)

 

[Rail Quest]

comments on redundancies in Yorkshire if sold

DB Cargo UK sale: Government issues statement after union call for guarantee of no redundancies

The Government has said it understands “concern” from workers who could be affected by the planned sale of Yorkshire-based rail freight firm, DB Cargo, after transport union TSSA last week called for a guarantee of no compulsory redundancies from the sale.

www.yorkshirepost.co.uk

these last 2 websites are behind paywalls, can't find a paywall free post of the Government statement
but from

Thats interesting. Makes me wonder: is it possible the government are prepared to step in if a suitable buyer wants to make drastic cuts or is not found to prevent job losses? Cant read the article so not sure if it dismisses that possibility.

 

[Farnborough]

And the Government has issued a statement about union comments on redundancies in Yorkshire if sold

Maybe the unions should club together and buy it?

 

[Transilien]

Maybe the unions should club together and buy it?

They could call it 'Great Syndicalist Railways'