Would full privatisation work?

[whole diary]

[Tim]

If privatisation was a success what would it look like?

a) More people use the railway?  Yes - and on that basis it is a success

b) The total costs (to both government and fare payers) would be reduced? Well perhaps not if the number of passengers has increased. So how about the cost per passenger mile is reduced?  Not sure where we are on that one.

c) Good customer service - Still a along way to go here.

d) Growth is accommodated - well to some extent at last orders for new trains to come with increased demand do seem to be starting.  Lets say the Jury is still out on this one. 

a) agree.  I feel that rising passengers numbers must be something to do with privatisation but I've never been able to figure out quite what the relationship is.  After all privatisation correlates with falling passenger numbers on the buses almost everywhere except London where they were not privatized. 

b) My starting point here is that costs should have been reduced because of improving technology (and private capital to buy it)and greater passenger numbers leading to economies of scale.  The number of passengers doubles but the number of drivers and guards and ticket sellers doesn't need to double to accommodate them.  Likewise the track maintenance costs will rise with more use, but not double.  There ought to be economies to be had here, but the privatised passenger railway has singly failed to get them.   See the McNulty report for evidence of this.  The problem has been the proliferation of expensive things like poorly specified overweight trains, and trains that are simply too frequent and too short (with rising passenger numbers it should have been possible to lengthen trains AND make them somewhat more frequent).  There is a balance to be struck here, but the financial wisdom of a train every 20 minutes all day from London to Manchester is, I would say, doubtful especially when many passengers are on advance fares and so the turn up and go aspect of the service is lost on them).  This to me is the biggest failure of privatisation.  The irony here of course is that the supposedly dynamic private companies are prevented from changing fares and timetables to drive greater efficiencies because so much is specified in their franchise whereas BR^▸ (British Rail(ways)) would have had far greater freedom to change things.   

c) agree somewhat, but would argue that customer service is on the whole better than BR.

d) growth is accommodated, but only where the Government permits a franchisee to do so.  A real private company would have the freedom to invest to accommodate growth and BR would have had the freedom to re-jig fleets moving them across the country to accommodate growth.   I suspect that accommodating growth is more expensive then it ought to be because of this. 

I wonder if the main benefit has been political.  The politicians (of all parties) are now more pro-rail than ever before.  This isn't entirely logical, but I can't help wondering that this is because they are weirdly happier handing over public money to private companies than they ever were to be seen handing money over to BR. 

[TaplowGreen]

How do you figure that rising passenger numbers are down to privatisation?

Do you not think (particularly in London and the South East) it's maybe more to do with demographics and working patterns? 

What we do know is that the forecasting of passenger numbers was catastrophically inaccurate, one of the reasons why we all have to endure cattle truck conditions.

There is a long, long way to go when it comes to acceptable levels of customer service - more unusual in a privatised service industry but not uncommon in a virtual monopoly - much of that is down to an organisational culture and attitude to customers which is still trapped in the mid 1970s.

[IndustryInsider]

What we do know is that the forecasting of passenger numbers was catastrophically inaccurate, one of the reasons why we all have to endure cattle truck conditions.

And has been catastrophically inaccurate up until quite recently.  December 2006 will be a time many will remember with the cuts imposed on the branch lines (which are now thriving), the removal of practically all the trains through Melksham (prompting the creation of this forum!), even cuts to more glamorous and profitable routes such as peak time reductions on the Oxford to London route leading to many complaints.  All specified by the DfT^» (Department for Transport - about) when awarding the franchise, and we are still reeling from the fallout.

Fortunately there are clear signs of a change of strategy with many recent franchise awards specifying a much improved level of service, and with electrification and new trains coming to the Greater Western franchise, you can be pretty sure that will continue after the current direct award finishes - whichever company gets to run it.

[devonexpress]

There is a long, long way to go when it comes to acceptable levels of customer service - more unusual in a privatised service industry but not uncommon in a virtual monopoly - much of that is down to an organisational culture and attitude to customers which is still trapped in the mid 1970s.

Myself I find GWR^▸ (Great Western Railway)'s customer service to be very good, you do get the occasional rude member of staff, but since I also know people who work at GWR with customers, normally its actually the fault of a moody customer who upsets the member of staff! 

However, I do find that First Class on board many TOC^▸ (Train Operating Company)'s is very poor, take GWR, you get a free cup of tea in a plastic/cardboard cup, and then either a biscuit or a slice of cake if available, which is fine for short journeys, yet if you want a proper meal for example Plymouth to Paddington with a journey time of 3 hours, you have to for the Pullman service, which should really be either half price to FC^‡(resolve) passengers, or complementary, after all its nearly £200 just to be on the train in First Class in the first place!

I doubt if the original GWR was around this sort of thing would be happening!

[John R]

As a daily user of the high speed first class service I spend around 10 hours a week in it, and I am pretty content with the offering. (Although I have often thought that Wine Wednesday could be supplemented by Mojito Monday, Tequila Tuesday and other alliterative offerings.)  If there was a more substantial catering offering then the supplement over standard would have to be more than it is (50%), when all I really want is the guarantee of a seat, a more comfortable seat and table, and a trolley to give me a cup of tea, a croissant, cereal bar and so on.

I regretted the demise of the travelling chef, which in my view was a reasonably priced service, and a good balance between the buffet and full blown restaurant, the latter of which is never going to be included in the ticket price as it is a very high quality product.

Even airlines are cutting back.  BA^» (British Airways - about) has recently announced that the second meal to Economy passengers has been axed on journeys of under 8.5 hours.

[IndustryInsider]

(Although I have often thought that Wine Wednesday could be supplemented by Mojito Monday, Tequila Tuesday and other alliterative offerings.) 

Blimey!  Would that little lot be followed by wet flannel on the forehead Friday?   

[onthecushions]

One point missed so far in the comparison of public and private ownership is the value traditionally placed on human capital, i.e. on skilled, trained, experienced staff, content to stay in a secure industry for life.

The modern manager, generally of an administrative, legal or financial background, in my experience thinks that there is a healthy skills market place where these can be bought in temporarily and cheaply. This is in spite of the fact that the only formation and training possible is in the very industry that s/he is pruning and ransacking so severely.

Part of NR^» (Network Rail - home page)'s, and by extension our problem is shortage of such skilled staff (such as S&T^▸ (Signalling and Telegraph) and OLE^▸ (Overhead Line Equipment, more often "OHLE")) which inflates costs, delays completions and will deter future investment.

Unfortunately the modern public sector is only too eager to emulate private sector bad practice - the first examples of skills shortages appearing under BR^▸ (British Rail(ways)) such as in the Clapham crash (let's not dignify it with the title of accident).

Not the German way,

OTC

[ellendune]

How do you figure that rising passenger numbers are down to privatisation?

Do you not think (particularly in London and the South East) it's maybe more to do with demographics and working patterns? 

What we do know is that the forecasting of passenger numbers was catastrophically inaccurate, one of the reasons why we all have to endure cattle truck conditions.

There is a long, long way to go when it comes to acceptable levels of customer service - more unusual in a privatised service industry but not uncommon in a virtual monopoly - much of that is down to an organisational culture and attitude to customers which is still trapped in the mid 1970s.

Quite possibly but one measure out of a number I still think it is valid. In the old BR^▸ (British Rail(ways)) days they raised fares to limit demand. So any increase in use is something you would want to inlude.

[devonexpress]

Quite possibly but one measure out of a number I still think it is valid. In the old BR^▸ (British Rail(ways)) days they raised fares to limit demand. So any increase in use is something you would want to inlude.

Yet the government still do this, in line with inflation, yet people from Reading to Paddington still pay the £2000 or whatever it is price of a season ticket, you have to ask yourself why?    I.E they have no choice, raising fares doesn't limit demand, it just annoys people, makes everyone's journey more unpleasant and leaves a cash cow for the train companies.   Ok, you have to expect some overcrowding, I'd say 20% to 30% above the trains seated capacity is fair enough. But when you have a train with 110% above its 465 seating capacity, then really something needs to be done which thankfully it now is, thanks to a £3 billion or so investment by the government, with a very expensive leasing cost, so they decide to get a maintenance package thrown in too risking engineers jobs in the train companies maintenance depots. Good Job!

[grahame]

... so they decide to get a maintenance package thrown in too risking engineers jobs in the train companies maintenance depots. Good Job!

I'm not understanding the argument relating to privatisation here.  It might relate to rules and regulation though.

Whether the railways are in public or private ownership, the ultimate controlling body can decide whether to have a setup where work is done in-house or where it's sent out, and it can decide whether to set up that system as short or long term agreements.  The work still has to be done, and from a practical view point the majority of train maintenance needs to be done physically close to where the trains are located, and by people who know their jobs well.   Yes - you may reduce jobs within the train operating company, but you increase in-country jobs in the other (in this case supplying) company.  The jobs still exist.

Where you do reduce the number of skilled jobs (and other resources needed) is by using equipment designed to be easier to maintain and more efficient in operation. And that's an ongoing feature of modernisation.   If things has stood still for the last 100 years / no modernisation on rail,  you would still be running with steam locomotive and carriages;  driver, fireman and guard on each train, longer turnarounds with the need to run around (and more infrastructure needed to do that), slower acceleration and lower top speeds reached giving longer journeys, and power sources (locomotives) that had low availability due to the need for longer servicing and slower and more refuelling stops.

[paul7575]

Embedded employees of the OEM are commonplace throughout the rolling stock maintenance field already.   Using MTU^▸ (Motor Traction Unit) employees within an Hitachi run depot seems to me to be be a good way of guaranteeing the engines are maintained properly.

Major maintenance of engine modules by specialist staff at a manufacturer's location is also commonplace.

I don't think either would change with a modern version of rail nationalisation.

Paul

[Sixty3Closure]

Yet the government still do this, in line with inflation, yet people from Reading to Paddington still pay the £2000 or whatever it is price of a season ticket, you have to ask yourself why?    I.E they have no choice, raising fares doesn't limit demand, it just annoys people, makes everyone's journey more unpleasant and leaves a cash cow for the train companies.   Ok, you have to expect some overcrowding, I'd say 20% to 30% above the trains seated capacity is fair enough. But when you have a train with 110% above its 465 seating capacity, then really something needs to be done which thankfully it now is, thanks to a £3 billion or so investment by the government, with a very expensive leasing cost, so they decide to get a maintenance package thrown in too risking engineers jobs in the train companies maintenance depots. Good Job!

£2000? I wish. Try doubling that.

I also don't see how trains being fill to capacity would actually encourage train companies to add more trains if the capital cost are going to be high. If they're making a reasonable return then I suspect the short view of the market would out weigh any thoughts about potentially greater profits in x number of years time.

[ellendune]

I think something went wrong with the quotes in that last post

[Sixty3Closure]

Thank you - fixed.

[ChrisB]

Whats it matter whether the engineers jobs are with the maintainers or the TOC^▸ (Train Operating Company)? Jobs are jobs, unless in the public sector