Archive for the ‘Railways’ Category

Should I admire Jacob Rees-Mogg?

Mhairi_BlackLast week I was driving to work listening to BBC Radio 4’s Woman’s Hour. Jenny Murray, the programme’s avuncular anchor, was interviewing the 21 year old Scottish MP, Mhairi Black (left). It was a general discussion about policy, life, MPing, etc. She made her maiden speech in parliament on 14 July 2015 and was roundly lauded for it, despite having broken the protocol that maiden speeches should be largely apolitical.

It transpires, however, that Ms Black is an admirer of Jacob Rees-Mogg, Conservative MP for North East Somerset. This is not someone that is at the top of one’s list for admiration. I find him extremely divisive and not a little annoying. But listening to the interview a seed of doubt was implanted in my brain. Ms Black said that although she fundamentally disagreed with him he was a) very polite to her and b) articulate such that he would always give a reason for his position (something which I would have thought was true of all MPs, but seemingly not).

Oh dear! Should I now reconsider my feelings towards Mr Rees-Mogg (below right)? Fortunately, to the rescue, came today’s edition of the Radio 4 Sunday morning magazine programme, Broadcasting House, for which he was a guest newspaper reviewer (along with former Business Secretary, Vince Cable and Hon_Jacob_Rees-Mogg_MPShelagh Fogerty, a radio presenter in London). They were discussing privatisation, and in particular the privatisation of Channel 4 Television. Cable argued that privatisation would undermine its public service ethos, particularly its flagship news programme, Channel 4 News.

And so Mr Rees-Mogg did what he does best, plausibly lie. First, he said that there are many private-sector news outlets that have high journalistic integrity. Hence Cable’s argument was not valid. He must have been thinking about Sky News and the integrity of Rupert Murdoch’s unimpeachable global news empire. He then went on to say that there should be a management buy-out; seemingly the best of both worlds, a privatised broadcaster with the existing management’s public service broadcasting ethos.

Now I have spent a good part of my life studying privatisation (UK bus and rail industry). In both of these cases, management buy-outs were seen as good options. Many of the former national bus company regional operators were transferred to the private sector by means of management buy-outs. The same is true of railway franchises. But where are they now? The bus and rail industries in the UK are dominated by large – increasingly international – conglomerates. One of the exemplar management buy-outs in the rail industry, Chiltern Railways (operating trains out of London’s Marylebone Station) held out for 6 years before finally succumbing to corporate ownership. It is currently owned by Deutsche Bahn, the German national railway operator. A few bus companies still hold out. In my home town of Hull, East Yorkshire Motor Services remains stubbornly independent. I cannot think of many more.

The point is Mr Rees-Mogg, management buy-outs are simply a means for corporations to access strategic assets at probably a little more than they were originally purchased by incumbent managements. The best way to protect strategic assets from corporations – if this is a desirable objective – is to keep them publicly owned. In this I include housing (wholesale transfer of public housing and right to buy). Mr Rees-Mogg is deliberately specious. He needed to be challenged on his plausibility. He was unfortunately deemed to be presenting a plausible argument. Speciousness is a deeply unadmirable trait.

Pics: Mhairi Black – SNP (through Wikipedia)

Jacob Rees-Mogg – LadyGeekTVFlickr

Those pesky railway workers

Network_railThe strike by UK rail infrastructure workers scheduled for next week has been called off, but the train operators (private companies using the rail infrastructure) had their plans for dealing with the lack of infrastructure. Obviously, not run trains. But it was worse than that. This was going to be a 24 hour strike straddling two days. Never helpful, but this is industrial action, it is supposed to be disruptive. Starting at 1700 on Monday and finishing 1700 Tuesday. Presumably then, trains will run on or near to 1700 on Tuesday? Er…no. Not worth it, it seems. Trains would have restarted the next full day.

PrintMaybe someone can correct me on this, but it seems on the face of it that the costs associated with restarting train services at 1700 are too high and the key passengers – season ticket holders – were unlikely to have travelled in to London or other principal cities in the UK earlier in the day and would, therefore, be unlikely to need the train home. So the rest of us who might want to use a train for non-work travel can go stuff ourselves.

It is easy to say that pre-privatisation (1994) it would have been inconceivable that the trains would not recommence after the ending of strike action. This really does seem to be a case of profit coming first.

Incidentally, I will arrive at Gatwick Airport at 1800 on Tuesday with a view to getting back home on the South Coast. I checked nearby hotels and airport parking. Extortionate. £140 pounds to park at Gatwick. These organisations seem to have had a service bypass!

The one unexpected good business was National Express which planned to put on extra coaches to cater for the stranded passengers at not-inflated prices from what I could see. Top marks. I’ll remember that.

Rail nationalisation – think it through

Network_Rail_imagesCA0ADM11I woke up yesterday morning to a news story that 30 or so candidates for the Labour Party in the UK are arguing for a partial nationalisation of the railways in line with Ed Miliband’s indication that a new Labour Government would seek not just to ‘run’ the country but to ‘change’ it. In order to avoid paying compensation to incumbent franchise owners, franchise contracts will simply not be re-let when existing contracts expire. The East Coast franchise, they argue, having been run by DOP (a public-sector company) for four-and-a-half years after it was abandoned by National Express after failing to meet targets, has been a ‘success’. There is a better way to run the railways, seemingly. And one that will see a reduction in ticket prices.

Let us just examine this in a shade more detail.

First, what is success? DOP delivered returns to the Treasury (£208.1m last year according a Guardian Newspaper report, 26 October 2013), but did not match the National Express contractDOP commitments; not least because they were flawed. Though customer satisfaction levels were, it seems, at a record high (2-3 percentage point higher than the Intercity averages).

Second, the railway is a capital intensive: infrastructure (already in the public sector as NetworkInterCity_imagesCAYLRJO7 Rail) and rolling stock (trains – all privately owned by Angel Trains; Porterbrook; Eversholt Rail Group and QW Rail Leasing).

The Franchises own virtually nothing over and above a few ticket machines. The costs, therefore, are largely fixed. They pay track access charges (to Network Rail) and rental charges (to one of three rolling stock leasing companies). The profit comes from a margin between fares, subsidy and operating efficiency.

Should the franchises be transferred to the public sector, those costs will not change significantly. Certainly not significantly enough to see a reduction in ticket prices.

BR_org_imagesCA569Y4RThird, under the present structure of the transport industry, who benefits from reduced ticket prices? The unfortunate reality is that the main beneficiaries are the relatively wealthy middle classes. The routes in the South East of England – in and out of London – attract the most attention for this reason. Also because the routes encompass some of the most sensitive electoral constituencies. And richest. The least wealthy areas, even in London, do not enjoy links with either the national rail network or the Underground. Actually, these areas are much more dependent on buses than trains. On that basis, it makes much more sense to nationalise the bus industry than the railway industry.

Now I am not arguing against nationalisation. It is clear in the years before privatisation, the railway industry was efficiently managed. Privatisation was at best a scorched-earth policy by the outgoing Major Government and, at worst, asset stripping by foreign and national ‘operators’. Any nationalisation programme will need to find a way to bring back all of the assets, including the rolling stock, back into public ownership.

125_Hull800px-43104_in_Hull_stationHowever, the issue is not about the ownership of the railways, rather transport policy more generally. What are the railways for and how do they link into the provision of mobility ‘rights’ for citizens, by whatever mode? And what is that worth in terms of transfer payments from the taxpayer to operators whether public or private? Let us not also forget the role of public transport in meeting environmental protection targets, such as CO2 emissions. It is cheaper, in many cases, to use private motor vehicles, particularly over longer distances.

Then there is the question of demographics. So much public money goes into servicing passengers in the South East of England because of the London effect. Government policy surely has to consider equalising wealth and opportunities across the country rather than concentrating it in the Capital which perverts demand for transport services.

In essence, then, a radical policy is not about the ownership of a few railway franchises. A radical policy requires new thinking about transport, its function, value and impact on other policy domains such as housing and economic development (beyond the capital).

Picture:

InterCity coach and 125 in Hull Paragon Station: Oxyman/Wikipedia

Nationalisation graphic, Bring back British Rail: http://www.bringbackbritishrail.org/news/page/2/

 

Making trains

Bombardier_logoFinally, some good news for UK manufacturing. Bombardier, the Canadian engineering firm, which owns the former British Rail train factory in Derby, has won the competition to supply 66 units to Crossrail opening in 2017 (impression, below right). They beat off competition from Siemens and Hitachi. The former recently won the contract to make the Thameslink trains. Hitachi trains can be seen running on HS1 between St Pancras and Dover.

Whilst I understand that competition is necessary when placing orders for expensive long-lived kit to ensure some Crossrail trainsdegree of value-for-money and quality (British Rail supplied to itself a lot of over-priced un-tested stock in the 1950s that very quickly found itself decommissioned), I despair at the ease with which much of the UK’s supply comes from abroad. The train building capacity and capability in the UK has been lost.

I despair even more, however, at the madness that the structure of the railway industry in the UK. This week, we learned who were the preferred bidders for the re-privatisation of the East Coast Mainline ‘franchise’ between London, the North of England and Scotland. The current operator, EastCoastDirectly Operated Railways (DOR), has been running the route successfully and profitably since National Express handed back the keys, so-to-speak, in 2009 after they failed to deliver the returns to the UK Treasury pledged in the contract (DOR has returned some £600m to the Treasury so far). National Express replicated the error made by its predecessor operator, GNER, that equally over-stretched itself and delivered those very same keys back to Department for Transport a couple of years earlier.

Three private-sector charlatans will slug it out in a race to the bottom. Here they are:

East Coast Trains Ltd/FirstGroup the very same that submitted an unsustainable bid for the West Coast route leading to a collapse in the bidding and its re-run at our expense (see post, 15 August 2012) .

Keolis/Eurostar East Coast Limited (Keolis (UK) Limited and Eurostar International Limited) – a nice little pairing of the soon-to-be-sold off British bit of Eurostar – the remainder is SNCF oddly publicly owned but allowed to run trains in the UK – and Keolis, a global French-owned public transport operators that ‘thinks like a passenger’. Apparently. They have a stake in the Southern Franchise that I use. If that is thinking like a passenger, this route is destined for exemplary bad service.

Inter City Railways Limited (Stagecoach Transport Holdings Limited and Virgin Holdings Limited) – ah yes, Richard Branson who is currently carving up a nice slice of the UK National Health Service for his ‘health’ business as well as good at picking up cheap banks that once were mutual (now Virgin Money). A favourite of a succession of UK Souter_Gloaggovernments. And the brother and sister partnership of Brian Souter and Anne Gloag (right), the Perth-based tycoons who peeled off (allowed by the UK Government) much of the UK bus industry when it – or rather the land that housed depots, workshops and bus stations – was given away in the 1980s. It’s not their fault, we invited them to do it. But should they win, they will control all services to north of Border as they already command the rails on the parallel West Coast, at least for the time being.

Readers interested in DOR’s performance can get a summary here

Pictures: Bombardier Trains: www.crossrail.co.uk; East Coast trains: www.rail.co.uk; Souter/Gloag: This is money: http://www.thisismoney.co.uk/money/article-1201254/Stagecoach-pair-18m-court-battle-disappearing-fortune.html

Buying rail tickets online in the UK

TicketFriday last was a bit of a challenge on Southern Railway – there seemed not to be any staffed ticket offices on the stations that I visited and a number of ticket machines were also out of order. I intended to travel to Gatwick Airport on Thameslink (First Capital Connect) – never a good idea to travel without a ticket. So I went online and bought a ticket for the journey. When using online booking sites – in my case Southernrailway.com – one has to designate a machine from which to receive the ticket after purchase. I did this, only to find that the ticket machine was not working.

I arrived at Gatwick Airport and sought guidance from a ticket inspector at the gate. I showed him the receipt for the transaction from my mobile. I asked him how I could get my ticket. Easy, apparently. All that stuff about designated machines is nonsense. Tickets can be printed from any machine on the network. This simple piece of information could have saved me some grief.