[Anonymous]

[canucklad]

The government has decided to re-privatise the East Coast line,

Presently the operator has returned £640m to the treasury and £40m reinvested in infrastructure…i.e making the customer experiance better….

In my view, dogma is taking over and the decision to re-privatise is being rushed through before people (taxpayers) notice how well this franchise is running and the argument for full re-nationalization starts to become to the fore!!

[VintageKrug]

Could you expand on how a train company can “return £640m to the Treasury” on just a couple of years of publicly owned operation?

That’s almost £1m per day over the past two years…???

I cannot believe it’s that profitable, or indeed could be sustainably that profitable going forward.

I don’t think the current operators have got it right, but nor do I think the current franchise system (which was watered down from a truly free market) serves passengers or the country well.

It is a truth universally acknowledged that a properly privatised free market will, in the long run, work more efficiently than a State owned enterprise.

In this case “properly privatised” probably does mean some market incentives to deliver the sort of outcome regulation presently delivers, and that might be difficult to concoct.

Either way, it will be good to see the private sector taking on this entity once again, allowing the government to return to running the country, rather than clipping tickets.

Having said that, my recent experience of the service is excellent, and the employees seem a happy bunch – suggests room for some savings, then.

[canucklad]

Morning VK….

Figures from “the Independant ” business section…….

I find myself agreeing with the opinion that it’s far more credible as a taxpayer and a rail user (on this line) that the £40m profit gets re-invested in the service rather than being used to pay Shareholder dividends !

[SimonS1]

Amazing what you can do with above inflation pay rises really.

Another good opportunity for the DfT to demonstrate its world class skills in the railway arena.

[VintageKrug]

Surely you mean “The Independent”.

Oh, here is the article:

http://www.independent.co.uk/news/business/news/anger-as-plan-is-rolled-out-to-reprivatise-east-coast-rail-franchise-8550809.html

[canucklad]

Don’t make me laugh VK……..

“Either way, it will be good to see the private sector taking on this entity once again, allowing the government to return to running the country, rather than clipping tickets”

The further away we can keep this lot from running the country the better………”TICKETS PLEASE”

and ……”.It is a truth universally acknowledged that a properly privatised free market will, in the long run, work more efficiently than a State owned enterprise”……….VK……have you seen the state of our railways, an absolute shambles, especially compared to Europe and dare I say it…….probably India too !!!

[LuganoPirate]

I think Canucklad, you were looking at turnover. I believe the actual figure was £190m before tax and service payments.

Nonetheless it’s a good result with none of the bleating demands for more money usually associated with old beardie.

I think there’s a good case here for the re-nationalization of the railways.

[VintageKrug]

No case whatsoever.

How quickly we forget just how bad British Rail was, old unreliable trains, limited frequencies, miserable staff and inedible catering.

There has been massive investment in railways, particularly in safety, aligning with a huge increase in users since privatisation.

Sure, things are creaking a little, but had the injection of private cash not happened then they would be on their knees.

Continued private involvement is essential. Governments should not run railways, most especially while the likes of Bob Crow still roam the earth.

[JordanD]

I’m sure I’ve read in a publicly available trade magazine (admitedly I can’t remember the source at the moment), that some of these “payments” are a case of the left hand giving and the right hand taking.

Directly Operated Railways [DOR], effectively a part of DfT, are paying a franchise payment every year to DfT/Treasury. So how much of this money is double counted, I don’t know.

This all being said, one looks at Chiltern Railways (part owned DB, German national rail operator) who have a long term franchise and have regularly been cited for investment in the railways, an who have invested in significant infrastructure works – the Evergreen projects.

[Shearer]

Until this country knows what railways are for we will be stuck with this mock privatization. I agree that this decision is driven by dogma rather than reality.

It’s a fallacy to say that we have a privatized railway when the TOC’s (who, are godawful for the most part) have to ask permission from the DfT to even increase services, and who have extracted hundreds of millions from the taxpayer.

But who can blame them?
FGW walks away from the last three years of the Great Western francise just as it becomes a premium franchise rather than a subsidised one, and er, gets handed an extension for er, three years.

Trebles all round!

London Overground is a good example how it should be done.
Or Northern Ireland Railways, still state owned and doing very well.

[VintageKrug]

The issue is that the original privatisations were “fudged” by having to compromise too much to get the legislation passed.

LU is an interesting example; the demand is huge, so cashflow and income are less of an issue. Can’t really be compared with the high costs and limited income from many regional services, for instance.

Though the recent re-assertion of local government control is working well, it should be remembered that it is implementing plans costed and developed under the previous public/private partnership. Would these have happened at all had LU never been at least partially exposed to the market?

Remarkable things happen when the Kimono of Statism is opened to reveal the free market temptations underneath……

[canucklad]

VK……again i’m not a train spotter anorak type……however the most serious accidents occurred, if memory serves me correct when Railtrack was ehhhhhh….

Privatised !!…..and chasing dividends

I am more than happy to be corrected !

[Henkel.Trocken]

Having used East Coast services regularly in all its guises since it was British Rail, I must say that at present it is a far better, more reliable service than it has ever been.

I would be in favour of it being left alone as it is clearly well managed and efficient. Compare it to the very sad offering on the west coast of run down trains and demoralised staff and perhaps East Coast should take over that too.

Sadly, it’s likely to be the other way around and we’ll see loads of over promise and years of under delivery like everything else old beardy touches.

[VintageKrug]

One of the lingering issues with contributors here is the expectation that a large corporate – and especially a former State Owned entity – immediately transforms under new ownership.

There seems to be a belief that anything bad which happens on the “new” watch can be laid squarely at the feet of the private sector – even just a few years later.

Not the case.

Just as is the case with the current government battling hard to right the wrongs of the previous Administration (while being barracked and criticised by those who got us far worse into this situation than might otherwise have been the case had Prudence not in fact been the Whore of Babylon), the new entity could not be held responsible for decades of mismanagement and underinvestment under government control.

That underinvestment started in the worst stages of the 1960/70s Slump. This continued during the 1980s as for the Conservatives, the priority at the time (and for lots of reasons too complicated to go into more detail) was roadbuilding – and that was a very successful programme indeed.

Railtrack inherited a Dog’s Breakfast which would take decades to sort out, and it made very good strides to addressing some of the structural issues. The monies required for the safety improvements following Paddington Rail Disaster were largely privately funded, and would otherwise have been a severe drag on the Public Purse.

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