Monday, May 02, 2005

Rail Renationalisation

...was the demand of British transport union protesters last weekend in London.

Thatcher hater national rail, but even she didn't dare to start rail privatisation. It was her successor John Major who started this mess, but only under Tony Bliar's New Labour government was it fully going. The result was: both the numbers ond dissatisfaction of passengers rising, safety levels falling, private investment into infrastructure low, infrastructure costs spiralling out of bounds. No convincing examples elsewhere either.

In Sweden, a number of companies went bankrupt, and the remains of state company Sj is struggling too. Like elsewhere, tilting trains proved no substitution for investment into upgrading infrastructure.

Privatisation advocates would then point to the Eldorado of railways, Switzerland, where nationalisation was never all-encompassing. However, they'd ignore that most "private" companies fell progressively under the control of state, canton and local governments, or that of their supposed rivals - which of course made coordination easier -, that the state company SBB took over some services, and that current plans foresee the consolidation of major "privates" into two majority-public-owned regional bigs.

But despite the lack of positive examples, most major parties in all European countries support the basic idea of rail privatisation - even those who attempt some protectionist measures to defend their own national railways. Yet this basic idea is faulty even on capitalist terms. The lack of competition can't be the problem of railways, for there is already quite strong competition: from roads and airways.

The problem more lies in something that can't be solved for free, with a few new regulations: decades of lack of investment, while at the same time there was a lot of investment into competitors (new roads, airports, tax-free airplane fuel etc.). Worse, railways got most subsidies to keep (a part of) services at level, rather than to keep them competitive (i.e. improve steadily as the competitors).

Furthermore, there is a false philosophy that predates the privatisation madness, but whose bad effects are enhanced by it: the idea to break down railway profitability into the profitability of single lines. However, capping a branchline won't just mean losing those living nearby as passengers, nor just losing some mainline passengers who'd transfer from this line. It also means that people along mainlines who may not travel often along this line, but who now will have to use a car anyway, could abadon train travel altogether and drive to other destinations as well. (Yes, this is stating the bloody obvious - but obvious to passengers, less so to company car-riding bureaucrats and managers.) Railways are networks, and should be seen as whole. If "profitable" mainlines are opened to competition of private companies, those will eat up (with price cuts and dividend payments) all the surplus that could have been used to maintain other parts of the network.

Those are already serious problems, and I haven't even mentioned the usual problems with private companies - the pricing tricks, the sparing on safety and investment, the instability (from financial to that of services), the exploitation of rail workers (again leading to safety problems) etc. - there was a reason rail became a public transport.

As a sidenote, not all is bad in current EU rail policies. One reason that rail's market share of freight transport in the USA far exceeds that in Europe is borders. In Europe, borders usually mean system changes, which mean time-consuming locomotive changes, paperwork, different rules. The EU's aim of synchronising approval processes, safety standards and systems, and subsidizing cross-border projects are all sorely needed.


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