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Wednesday, 20 October 2010

Railway Privatisation Horro as Chickens Come Home to Roost

Railway Privatisation Nightmare Chickens Come Home to Roost

The announcement that rail fares are to rise by around 40 percent over the next four years is the inevitable result of the Tory-generated and Labour-supported railway privatisation project.
Despite the much-vaunted “privatisation” programme having stared in 1993 with legislation enacted by the John Major government, the railways network has remained chaotic, particularly with the splitting of track ownership from the train operator companies.
Furthermore, although the original idea was to “save the taxpayers money,” the reality is that the state has been forced to continue subsidising all the railway companies, and in some cases, even take them back under state control.
This happened as recently as last year with the National Express East Coast company, which took over the Scotland-London route running through Anglia. That company is still directly owned by the Department for Transport through a subsidiary, Directly Operated Railways Limited.
Exactly how much the “privatised” rail network costs the British taxpayer is still the subject of much speculation. According to an article published by the authoritative Daily Finance website, the total UK rail subsidy runs into the £5 billion a year figure.
According to that analysis, state “money changes hands between track owner Network Rail and train operating companies on a weekly basis, wasting millions of pounds of taxpayers' money” because of the complex system of multiple ownership of the network.
“Network Rail pays the train operating companies, such as Virgin Trains, when its equipment causes delays. But the companies pay Network Rail when it does better than expected,” the Daily Finance continued.
“Network Rail claims that in the six months to November 2009, the companies paid it a net contribution of £58m.
“Exactly how much each train operator is paid or the most paid for a single incident is, apparently, ‘commercially sensitive’ but Network Rail can pay out anything from £20/minute of delay to £400/minute. Delays to south-east commuter trains are the most expensive.
“There's a rail regulation department with a boss on not far short of £200,000, though, on top of National Rail, whose boss gets more than £600,000 in basic, plus a near 50 percent bonus for the great running of the service. The trains may not run on time, but there's a chuffing lot of money going round,” the article concluded.
Now, commuters have been told that rail fares are set to rise by as much as 30 or 40 percent as a result of “changes to subsidies” to be announced next week.
According to reports, Transport Secretary Philip Hammond is “known to want to continue investment in the railways and is not ruling out fare rises to help pay for it during a time of retrenchment in public spending.”
Apparently Mr Hammond has fold train operating companies that the formula by which regulated rail fares are set may have to be changed.
What he actually means is that their taxpayer-funded subsidy will be cut, which will leave them with no alternative but to increase their fare prices dramatically, if they still want to pay profits to their private investors first.
Currently, almost half of all train fares are regulated, including popular commuter routes, season tickets and long-distance off-peak journeys.
Once again, it is the taxpayer and consumer who will be forced to pay for the ongoing disaster inflicted upon us by the Westminster parties.