Saturday, April 27, 2002
Some More On Vertical Integration
I believe that railways work best when they are vertically integrated ie. that the operator of the trains owns the track. I got more support for that view from Central Railway.
Central Railway (as I mentioned yesterday) is planning to build a 400 mile freight railway from Liverpool to Northern France via the Channel Tunnel. They are desperate to keep control of both the trains and the track. Why? They know their business will stand or fall on reliability. If goods do not arrive on time, or pretty close to it, customers will find an alternative. Reliability is built on reliable trains running on well kept tracks. Both parts are vital. It is of course, possible to divide the two and manage the interface by contract. That is precisely what has been tried on Britain's railways, without conspicuous success. It seems that managing a railway by contract is just too difficult.
The difficulty in the fragmented approach comes into sharp focus with the issue of engineering works. The operator wants the work carried out at night. That way he can keep his trains running during the day. The contractor, on the other hand, wants the work carried out during the day. That way, he has more time, can do the job in fewer "goes" and doesn't have to fork out a fortune in overtime payments. In a contractual arrangement there is a constant tension between these two points of view. But if there is no contract and the operator and contractor are part of the same company, one person at the top can decide which approach should be taken according to the specific circumstances involved.
Thursday, April 25, 2002
The Central Railway
Imagine, if you will, an entirely new railway starting at Liverpool and calling at Manchester, Sheffield, Leicester and the West of London before travelling through the Channel Tunnel on its way to Northern France.
Imagine it being fully electrified and capable of taking fully-laden lorry trailers (something that no UK railway can currently do.)
Imagine this railway taking 3 million lorry journeys off the roads every year.
Imagine reasonably generous compensation being made to those affected and imagine the whole line being built in the private sector without a penny of government subsidy.
Too good to be true? Not if the Central Railway has anything to do with it.
The Central Railway was set up in the early 1990s to make this dream a reality. Its directors believe that there is a potentially huge market for its services and that it will make a handsome return to its shareholders. In doing so, it would take huge numbers of lorries off our roads, make trade with the Continent faster and cheaper and go a long way to meeting the Government's freight on rail targets. It would also provide additional passenger transport capacity on parts of its route as well as electrifying part of the diesel-only Chiltern line North West of London.
This project comes as close as anything on the railways to the libertarian ideal. So why hasn't it been built yet?
Two words: the State. New railways need parliamentary approval. They need it in order to slice through the UK's convoluted planning system and to secure the compulsory purchase of land along the route. An attempt was made to gain approval in 1996 but foundered when it failed to get Government time and was "talked out" by backbenchers. Now, six years later Central Railway is gearing up for another bite at the cherry. One can only hope it succeeds.
If it does succeed (and that's a big "if"), that will mean it has taken the thick end of 10 years to get approval for one railway. In the 1840s (if my memory serves me correctly) hundreds of railway bills were pushed through parliament. In a brief whirlwind of activity the foundations were laid for the best railway anywhere in the world. It's not as if it can't be done, so why the delay?
Part of the reason stems from the vast increase in the amount of (usually bad, usually unnecessary) legislation that the Government lays before Parliament. Getting time for bills like Central Railway's is no laughing matter. But there is another factor here: the Government's own involvement in the railways.
In the 1840s, the Government couldn't care less. "You want a bill? Fine, here's the approval. But if you go bust that's your neck on the block." But here and now in the noughties, Governments do care. They have ministries, regulations, European regulations, subsidies and strategic authorities. They are up to their necks in railways and the voters know it. If things go wrong it is the government that gets the blame. If the Central Railway were to go bust it could become the government's problem. They might have to pay for it to be completed just like they are having to with the Channel Tunnel Rail Link. Not a happy prospect.
So, the government is undertaking its own assessment of Central Railway's viability. The fools. Don't they realise that this makes their position a whole load worse? Don't they realise that if they give their imprimatur to the project and it fails they'll be under even more pressure to bail it out?
It's not just the viability issue that is holding things up. The Government has targets for rail freight. It wants an 80% increase by 2010. But Central Railway, by taking such a huge amount of freight off the roads affects this target. Now, it would seem that this is all to the good. Surely, if someone is offering to help you out and it's not going to cost you a penny you should take them up? But it is not that simple. If the Central Railway succeeds, it would go a long way to showing that government intervention and "strategic" thinking aren't necessary. People would start to wonder if we really need all those Ministry of Transport civil servants. It could be P45s all round. Expect some tortured arguments as bureaucrats find ever more esoteric ways of hanging on to their jobs.
Tuesday, April 23, 2002
Monday, April 22, 2002
Safety is Dangerous
U-turns are normally confined to public highways but according to this article it seems it is about to tried out on the railway. A government-appointed, totally independent, expertly-advised commission has stated that ERTMS, the all singing, all dancing safety system is dangerous. It is dangerous because it will reduce capacity hence forcing people onto the roads which are something like 50 times more dangerous than railways. This is strange because not six months ago another government-appointed, totally independent, expertly-advised (and shockingly expensive) commission (the Cullen Inquiry) was telling us that ERTMS was absolutely essential. So which are the bunch of morons, Prime Minister? From whom should we seek an apology and our tax money?
Of course, it doesn't work like that. Governments are short term and we are merely seeing the latest flip-flop. As I pointed out a few weeks ago, now that Railtrack has been nationalised the government has to pay the bills. It was quite happy to saddle the privatised Railtrack with no end of obligations (one of the reasons it got into difficulty) but sees no reason why consistency should ever apply to such a noble undertaking as the state.
Sunday, April 21, 2002
Graffiti and Vandalism
I was interested to see this article in the Independent. I have complained about glass and other kinds of graffiti before and I am somewhat surprised to hear that the Train Operating Companies and the British Transport Police are on the case. I am just not sure I entirely believe it.
Yesterday, I was passing a branch of Cafe Nero in Central London. What caught my eye was the guy outside who appeared to be buffing away a piece of glass graffiti on the front door. So, it can be done. And if so, why aren't the train operators doing it?