UK Transport

As its title suggests UK Transport covers all aspects of transport in the UK. It is written from a libertarian perspective, in other words, that the less the State involves itself in the running, regulation or funding of roads, railways or anything else - the better.
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Friday, March 15, 2002

More Guardian Lunacy

OK, so I haven't actually trashed anything in the Guardian so far but it was only ever a matter of time. In a long rambling article on Amtrak Matthew Engel looks at the state of America's railways and argues...well, to be honest, I really don't know what he was arguing. But knowing Guardianistas he was probably trying to get the taxpayer to spend ever more money on products that no one wants to buy.

The railways are a shambles. Decades of under-investment have come home to roost. The main company involved is effectively bankrupt. There is talk of breaking it up. The politicians have no idea what to do. Welcome to America.
Yes, very clever, but you were really trying to get us to think about the UK. And no it's not decades of under-investment that's at the root of our problem - it's decades of State interference. Oh, and you are wrong about the US. The private freight operators who actually own the 200,000 odd miles of track in the US are doing OK. The problem is the state-owned passenger operator Amtrak which in fact is a rather minor part of America's rail equation.
Only one major politician has ever shown much interest in the trains: Michael Dukakis, the beaten candidate for the presidency in 1988. The suspicion that Dukakis was the kind of person who liked trains helps explain why Americans refused to vote for him. He is currently Amtrak's chairman.
If it wasn't shafted before it certainly is now.
Since September 11 fewer people have flown, and Amtrak has got extra passengers, especially on its north-eastern routes. It runs fast, regular trains with heaps of legroom and an electric socket by every seat: the ordinary seats are more comfortable than British first class. Unfortunately, the track is so clapped out that, though the trains can do 150mph, it still takes three hours plus from Washington to New York. Different set-up, same imbecilic lack of planning.
Right. So it runs trains that are both fast and slow? Wow, now that really does take some doing.
The rightwing is arguing that Amtrak should be privatised and broken up...
Well they're right. The distances involved in inter-city travel in the US are just too vast for rail to compete. Yes, of course, there is a certain romance about train travel but that is no argument for subsidy. If there were you might as well subsidise the horse and cart.

Note also the use of the term "rightwing" (meaning libertarian), often confused (surely not deliberately) with the term "far right" (meaning fascist).
People use British trains because the roads are so clogged they are the least worst alternative. And for me, having left the country partly to avoid the possibility of one day strangling an employee of either Railtrack or Great Western, it is pretty galling to realise Britain is not the only country that is totally ludicrous on this subject.
Well, isn't that interesting. Normally, I find it galling when Britain is alone in being completely crap at something - like winter sports for instance. In fact when it comes to railway crises we are in rather good company. Holland's railway is in a mess. France's (although it works rather well I have to admit) is burdened by a mountain of debt and annual subsidies are running at about twice the rate they are here. It is no coincidence that the Japanese system, the one passenger railway in the world that works both for the passenger and the taxpayer, is the one with the least State interference.

It's not all Doom and Gloom

I have just seen a letter on the Telegraph's Letters Page. (Apologies for the lack of a direct link. It's a javascript pop-up. Just click on where is says Chiltern First).

Obviously this is a very satisfied customer. Whether this has anything to do with privatisation, however, is something of a moot point. Chiltern, the railway referred to, was given an enormous makeover by BR just before privatisation/fragmentation. It definitely got new trains and a new safety system. I am pretty sure it also got new track, signals and spruced up stations. This was all part of a concept known as Total Route Modernisation. No one has tried anything like it since - not entirely surprising given the fragmented nature of the railway and the short-term nature of the TOCs.

A Dubious Claim

According to research commissioned by Barclaycard transport delays are costing British businesses a "phenomenal" £1.9bn a year.

Now I hate to be one to downplay the current transport crisis but Britain is a trillion pound economy. A paltry sum such as £1.9bn is, in economic terms, the equivalent of change lost down the back of the sofa.

Train Driver Shortage

In the UK we have a train driver shortage. What the article does not mention is that the origin of the shortage is the decision of the TOCs to massively increase the number of services they run. For instance, Great North Eastern Railway (GNER), which runs trains from London to Edinburgh has increased the number of services it runs from about 86 a day to about 120. Benefits from privatisation/fragmentation have been few and far between but this is one of them.

A Short Note On The Structure Of The UK Railway

Before 1993 British Rail (BR), a nationalised corporation, ran the railway. Under the 1993 Railways Act it was split up into the following:
  • Train Operating Companies (TOCs) which ran the trains
  • Railtrack which owned the infrastructure (the track, stations and signalling)
  • Rolling Stock Companies (ROSCOs) which owned the trains
  • Infrastructure Maintenance Companies which maintained the track.
Railtrack, the ROSCOs and the Maintenance Companies were privatised. The TOCs were contracted out.

In addition a number of statutory regulatory bodies were set up:
  • Office of the Rail Regulator (ORR, usually referred to as the Regulator) which set track access charges and levied fines for poor performance and awarded bonuses for good performance.
  • Office of Passenger Rail Franchising (OPRAF) which determined which TOCs ran which services for how long and with what subsidy (or in some cases payment)
  • The Health and Safety Executive (HSE), not strictly a new body, which via Her Majesty's Rail Inspectorate (HMRI) investigated accidents and made recommendations regarding safety.
Funding was achieved as follows:
  • TOCs received money from passengers via fares (about £2.6bn in 1995) and subsidies from OPRAF (about £1.3bn in 1993).
  • TOCs leased trains from the ROSCOS
  • TOCs made payments to Railtrack according to Track Access Charges. These payments could alter according to things like usage and delay attribution. For instance if a signal failed Railtrack would have to make a payment to the TOC.
  • Railtrack paid maintenance contractors according to contracts drawn up before privatisation.
The privatisation/fragmentation process was completed just weeks before the 1997 election which brought Labour to power.

Since then Labour have made the following changes:
  • The creation of the Strategic Rail Authority (SRA) which subsumed the job of OPRAF and was given a brief to come up with schemes to increase the capacity of the network.
  • It started to make direct payments to Railtrack. I am not sure about the amounts.
Since privatisation subsidy has declined to about £1bn a year - roughly the same as it was in BR's days. However, fare revenue has increased to £3.3bn

One day, I will draw out a diagram which will make some of these relationships a bit clearer.

The Japanese System

The Japanese railway is entirely in the private sector. Its punctuality (about 99%) and cleanliness are legendary. Bullet trains (known in Japan as Shinkansen) are amongst the fastest in the world. In the last ten years only two passengers have died as the result of collisions (RAIL #396 15 November 2000 p87). A third of all the world's rail passenger journeys take place in Japan.

Japan's network can be divided into three sectors: private railways, the JRs and the regional railways.

The term "private railway" is usually used to describe those railways which have never at any point been part of the state system. They tend to be concentrated in the main urban areas and their main business tends to be commuting. Private railways tend to own extensive property interests, such as shopping centres, housing developments and tourist resorts. Private railways do not receive subsidy. Their fares are controlled.

The JRs are the result of the 1987 privatisation of the Japanese National Railway (JNR). There are six of them: 3 on the main island (Honshu) and 3 on each of the smaller islands. In the 1960s, shortly after the launch of the first Shinkansen, JNR started to make losses. In the 1970s and early 1980s these losses became truly gargantuan. At one point JNR was losing about £10bn a year. Politicians started to look around for a solution. Fortunately, they only had to look as far as the profit-making private railways for the model. JNR was duly privatised. Although, Japan has since been in more or less permanent recession the Honshu JRs "seem" to have done well.

The island JRs, in common with regional railways not only in Japan but all over the world, have not done so well. Regional railways simply cannot compete with cheap, efficient and flexible motor transport. But in Japan, as elsewhere, the public continue to demand their preservation. As a consequence central and local governments continue to subsidise these services. As it happens the only serious rail accident to have taken place in Japan in recent years took place on a subsidised regional railway.

Corporate Manslaughter - An Addendum

I thought I had read this somewhere and today I came up with, if not the exact quotation, then something very similar. This appeared in RAIL No.396 15/11/2000 p62.
"At Ladbroke Grove the fatally flawed track layout, designed and approved by the safety authorities [ie the Health and Safety Executive (HSE)] in the belief that Advanced Train Protection [a high tech safety system] would prevent signals passed at danger, clearly paved the way for an accident."

In other words, the very authority that is going to prosecute others is itself partly responsible for the accident.

Wednesday, March 13, 2002

On Corporate Manslaughter

The news that rail companies involved in the crash at Ladbroke Grove are to face charges offers the opportunity to ask whether we need safety regulation at all.

To start on a flippant note it is interesting that the Health and Safety Executive (part of the State) will be prosecuting Railtrack (recently acquired by the State) and Thames Trains (so constrained by Franchise Agreements and the State-imposed structure of the industry that it might as well be part of the State) in the hope that the accused will be forced to pay fines to the State.

But there is a more important point here. Safety regulation is simply not needed. Train crashes cost huge amounts of money. The bill for the Hatfield crash was estimated at £30m and that was before Railtrack started tearing up the track all over the country and plunging the network into chaos. Train companies have every incentive to avoid accidents.

"Ah, but what about insurance?" I hear you say. Ultimately, insurance pay outs come from insurance premiums. A reckless rail company will, in the long run, pay for its actions. There are all sorts of good reasons why rail is the safest form of transport.

But what about negligence? If we don't have regulation what redress can there be for passengers? Redress is a matter for passengers and the railway company via their contract. It is not a matter for the state. Indeed by introducing regulation the State in effect invalidates voluntary contracts by an act of compulsion.

In a genuine free market the likelihood would be that we would have a choice. As a passenger you would be able to pay for a standard ticket which offered no compensation in case of accident or, for a slightly higher sum, be able to purchase a ticket that offered all manner of compensation in the case of accident or delay. State regulation just queers the pitch.

Nothing new or original...

But NAPF's warning to the Government over Railtrack adds further evidence that the decision to put Railtrack into administration was not only bad for the railway but also to the whole Third Way project.

We seem to be inevitably heading towards an almighty court case which will not only cost a fortune but last and age and paralyse the railway. Oh dear.

Tuesday, March 12, 2002

For Heaven's Sake

Are senior Conservative politicians trying to throw the next election? Now they've decided to turn their attention to buskers.

I like buskers. Some are good, some are bad but all are free unless you feel inclined to release some of your loose change. Perhaps some of them are intimidating but I am yet to meet one. Generally speaking they cheer the place up. Is it really so difficult to remove the bad ones and keep the good? Frankly, buskers have every incentive to play music that people want to hear to a standard that make the experience enjoyable. All this does is to reinforce the image of the Conservative Party as the party of miserable gits.

Fare Hike Threatened

I have just seen this article in the Evening Standard. It appears that commuter rail companies around London are considering massive fare increases. Apparently they will shortly be allowed to do so. It seems that when the system was fragmented in the mid-1990s, rail companies were restricted to an RPI-1% formula for 7 years. This restriction is about to be lifted. Good.

Yes, I actually said that. Why? For a variety of reasons that for reasons of time I cannot go into right now. However, I do intend to return to the subjects of fares, monopolies, capital investment and the real nature of railways at a future date. For the time being I will say just this: state intervention on the railways does not work. Monopolies are not nearly as bad as people tend to think.

The Crisis at Connex

Last night on ITV's current affairs programme "Tonight with Trevor MacDonald" there was a major piece on Connex which runs rail services from London to Kent. The piece spent most of its time following the progress of Connex's French Chief Executive, Olivier Brousse as he went about his job listening to passengers and inspecting depots.

Now, I have to say that I had to admire Brousse for daring to speak to passengers. Connex is almost universally regarded as the worst franchise of them all and we heard almost nothing but complaints. It must be truly awful having to listen to that tirade every day (if indeed he does).

But courage aside what did we actually learn about Connex's plans? There was a short piece about new trains. There are going to be a lot of new trains on Connex and they certainly look very swanky. But there was no mention of the difficulties in getting them into service. Firstly, they are unreliable (as most new trains are). This has been brought about largely as a consequence of introducing fickle technological advances such as electric doors and air conditioning. The more there is to go wrong the more goes wrong. Secondly, and far worse, is a burgeoning problem with power supplies. Put simply, there isn't enough electricity to power all the new trains. Sorting this out is a Railtrack problem, will take at least three years to implement and Railtrack haven't even begun to think about it.

To my mind running a decent railway has little to do with fancy technology and everything to do with system. It is about getting a lot of small things right all at the same time. It is about making sure that it is easy to buy a ticket, that tickets are checked, making the most efficient use of staff, making sure that trains are as reliable as can reasonably expected. There was nothing at all to indicate that Connex was getting to grips with these sorts of issues. Pity the passengers.

Monday, March 11, 2002

Mr Blair's Black Day

I cannot remember a day like it. The media is awash with bad news stories about the railway. This is just a small selection of stories I have spotted today:

New threat to ScotRail services
Docklands rail staff vote to strike
Rail chaos: the voters blame Blair
Rail rage
Is there light at the end of the tunnel?
Woman hit by two trains
James attacks 'disaster' of Labour's rail rescue

There's more to come tonight with a report on the crisis at Connex (one of London's largest commuter networks) on prime time ITV.

Oh, there was one good news story - but only one mind you:

Rail firm to buy 700 new trains

This is Labour's nightmare. This is the story that simply will not go away. Maybe they thought that with the sacking of so many at the Transport Department they had bought themselves time. Wrong. The media have refocused on what is actually going on on the railways - and it isn't a pretty sight. And it isn't going to change any time soon. It will take at least another 6 months to get Railtrack out of administration; another year to restructure the industry and a further 3 years to sort out replacements for slam door stock. And every couple of months in that time the media will be back with yet more horror stories of delays, cramped conditions, financial scandals and heaven only knows what.

The Third Way is truly turning out to be a dead end.

Congestion Charging

There's a big hoohaa in the UK at the moment over congestion charging. One of Mr Blair's trendy think tanks has made the apparently sensible suggestion that drivers might like to pay for the congestion they cause.

Far too early one morning I managed to catch a TV interview with David Begg, the author of the report. Clearly switched to mantra-matic mode he droned that "you can't introduce congestion charging until people have a decent public transport alternative."

Drivel. And double drivel. Drivel because you don't have to waste billions of pounds of taxpayers' money. Double drivel because it assumes that the State has a role to play in transport.

I'll start with the second point. In the 1920s London had the best public transport system in the world. It had the best trains (often electrified), it had a brand spanking new tube network and it had fast, frequent and reliable bus and tram networks. With the exception of inner-London trams all of this was built and paid for and run by private enterprise.

In the 1930s they nationalised the tube and the buses. If memory serves me correctly they also came after the remaining trams. In the 1940s they nationalised the trains. Since then steady decline has been the order of the day.

Nowadays, the chief problem we face is road congestion. But who owns this road if not the State? It is the State's failure to manage its own property that has led us to the gridlock we currently face. To congestion we can also add the horrors of poor surfaces, potholes, traffic calming measures and traffic engineering.

In a free market there would be tolls and there would be an initial battle to determine the best technology. After that roads would start to compete with each other. They would compete on things like speed, ride quality, price and safety. Who knows we might even see Brian Micklethwait's 3ft-high Ferrari-only tunnels.

But where will people go if they are priced out of their cars? Surely, they need an alternative? The answer is that people who are priced out of their cars will go nowhere. They will continue to use the very same roads but switch to other means of transport whether it be buses, coaches, bikes or motor bikes.

Charging simply leads to a more efficient allocation of resources. Roads will be free flowing and predictable. It will then be possible for bus companies to introduce reliable timetables and hence services that are competitive against both car and rail. It is one of the great ironies that as more people drove into London so fewer people came into London by road. Buses suffered the same jams as everyone else and lost competitive advantage.

It is possible that, initially at least, there won't be enough buses and there may be an initial period of high prices. This will quickly send out the signal that there is a gap in the market and the response will be to build more buses. It maybe a rough time but far less rough than the ten more years of gridlock we face while the State works out what it is going to do.