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British government-run intercity passenger service to be privatized
The problem with the private operators on the East Coast Mainline was that if a train operating company has a bad year and can’t pay the full annual franchise premium to the government, the DfT terminated the franchise, no negotiating.
There is also the problem that competition between private operators during re-franchising process causes the winning company to overbid, promising to pay much money to the government based on rosy ridership and revenue estimates.
These two problems both occurred with GNER, its parent company Sea Containers fell into financial trouble and was unable to make its promise franchise payment. These two problems were also at the heart of the battle between Virgin Trains, FirstGroup, and DfT during the failed West Coast re-franchising.
The a railway under government ownership can be run well is not surprising, British Rail before privatization was the least subsidized and most productive national railway in Europe, it ran more passenger trains at +100-mph than any other railway including the TGV and Shinkansen, on an upgrading Victorian network to boot.
GNER did a good job while they had the East Coast franchise, the repainted and renovated rolling stock looked real classy… but that counted for little when the overriding demand is to maximized revenue (thru franchise premiums), the Exchequer still trying to pursue the goal of turning the rail system into a money machine for the government.
Privatization can be done, but the model should be Japan where JNR (which compared to BR was an utter financial and labor productivity disaster) was divided into regional vertically integrated railways, some today still financially backed by the government and others now successfully publicly traded non-subsidized companies.
The British would be better off I think if the private train operating companies where given open ended contracts, to operate the franchises in perpetuity baring a failure to meet certain performance criteria. This
Get that the Government run franchise is more efficient then the Free Market franchises hmmmm!
Ronald, do you need to post EIGHT times with EXACTLY the same content?
Ronald, do you need to post EIGHT times with EXACTLY the same content?
Part of the problem here is Mr. Sheck’s, in that he just can’t wait to see his comment has been accepted. The greater fault is with Trains because it takes what is seemingly forever and a day to find out a comment has been sent.
Bring back the LNER and the GWR
Bad headline. This is not privatization, it is government franchising of passenger service in the UK and has been in effect for a couple of decades. Much better service, and more of it, than when I first visited the UK in 1979. I have been very impressed on trips on Arriva and Virgin trains.
Bad headline. This is not privatization, it is government franchising of passenger service in the UK and has been in effect for a couple of decades. Much better service, and more of it, than when I first visited the UK in 1979. I have been very impressed on trips on Arriva and Virgin trains.
Bad headline. This is not privatization, it is government franchising of passenger service in the UK and has been in effect for a couple of decades. Much better service, and more of it, than when I first visited the UK in 1979. I have been very impressed on trips on Arriva and Virgin trains.
Bad headline. This is not privatization, it is government franchising of passenger service in the UK and has been in effect for a couple of decades. Much better service, and more of it, than when I first visited the UK in 1979. I have been very impressed on trips on Arriva and Virgin trains.
Bad headline. This is not privatization, it is government franchising of passenger service in the UK and has been in effect for a couple of decades. Much better service, and more of it, than when I first visited the UK in 1979. I have been very impressed on trips on Arriva and Virgin trains.
Bad headline. This is not privatization, it is government franchising of passenger service in the UK and has been in effect for a couple of decades. Much better service, and more of it, than when I first visited the UK in 1979. I have been very impressed on trips on Arriva and Virgin trains.
Bad headline. This is not privatization, it is government franchising of passenger service in the UK and has been in effect for a couple of decades. Much better service, and more of it, than when I first visited the UK in 1979. I have been very impressed on trips on Arriva and Virgin trains.
Bad headline. This is not privatization, it is government franchising of passenger service in the UK and has been in effect for a couple of decades. Much better service, and more of it, than when I first visited the UK in 1979. I have been very impressed on trips on Arriva and Virgin trains.
I don’t understand this. I thought that I had read that the privitazation of the railroads in England was a big mistake! Yet, the government wants to do this. Oh, well. I guess in a few years, we’ll be reading about the collaspe of another british railroad.
Virgin made huge improvements to the London Manchester route between 2001 and 2006 when I used to regularly use the train between Macclesfield and London. I was astonished when they failed to get the franchise. British Airways and British Midland lost a lot of business to Virgin - not that it was cheaper but was far more convenient for central London.