My suggestion for maximising effectiveness and accountability is to convert Network Rail into a special form of private limited company where the shares are owned solely by the train operating companies. Shares would be given as part of the granting of an operating licence, and would be forfeited upon ending of the licence. It would not be possible to buy and sell these shares, or otherwise acquire and dispose of them. Dividends would not be allowed. The operating companies would pay the infrastructure company for the use of the infrastructure.

The shareholders would set policy, the infrastructure company would be run by a board to implement the policy. The infrastructure company would have to be run in the best interests of the operating companies. It is in the operating companies interests that the infrastructure company is operated in the most efficient and effective way. Capital infrastructure projects would have to be funded out of profits, which in turn comes from fees charged to the operating companies. So policy would have to be set such as to balance costs against revenue from passengers and freight.

Thus, there is a virtuous circle of common interest between those directly responsible for the infrastructure and those directly responsible for operating trains. It is in both their interests that the end users are satisfied. If things go well the operating companies make a good profit; if things go wrong they are ultimately accountable, both to their own shareholders and the public at large.

I appreciate it will be possible to ague in many detailed why such a scheme might not work, but if the BIG PICTURE is fundamentally sound then the details can be got right (assuming a sensible and competent government, of course).

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Forget carbon credits, global temperatures are falling. The Met Office have never got one of their year forecasts correct.

The road network generates a profit. A huge profit for the government.

Hypothecate all the taxes such as VED and fuel duty on desiel and petrol for vehicles to maintaining the road system, plus a bit for new roads and policing. Then set the level of VED and fuel duty the same all over.

If you want carbon taxes, start putting carbon taxes on all things, including electricty generated from coal, heating oil the works. I think you will find that you’re the target for the lynch mob

Nick

What does that mean, exactly?

> They claim it to be more environmentally friendly.

So is it to do with environment impact? but environmental impact, really, is simply one of the costs of a given form of transport. To properly pay for a form of transport, you must pay all the costs, and this is simply one of them.

Now, it may well be that rail has a lower environment cost than road, but what about all the other costs? another reply here asserts rail is four times as expensive as road. I wonder if that includes an environment cost assessment? if it does, then rail may well have a lower environment cost than road, but its other costs are so much greater, its still much more expensive. If not, road will have to have one hell of an environmental cost to make rail competitive.

The thing about environmental cost is this; if you pay that cost, you ameilorate the environmental damage. That’s the point of it. So if you’re doing that, the amount of cost is per se meaningless; all that matters is the overall cost of a given form of transport. There’s nothing magical about a given form of transport having a low environmental cost, which means that it then inherently becomes a good choice.

That is what China used to do but then people could afford cars, cars polluted the cities and it went the same way the UK has

Ban the car from cities and make people cycle. Cures the obesity epedemic, parking problems and reduces pollution a lot (which saves NHS costs) as well as reducing accidents. It also dramatically reduces the enormous amount of state money burned every year on road repair, rebuilding, and infrastructure.

Cars kill 1000 people a year – thats more than gun crime. Car accidents and poor drivers maim hundreds of children a year.

The US has enormously subsidized road networks, they still have railroads mostly for freight and despite the huge distortions caused by the road subsidy they are profitable. Remove all the subsidies and most long distance road transport is uneconomic.

Labour inherited the mess and made it worse by creating Network Rail rather than making it nationalised (the road network you will note is nationalised and works…). This was all done to keep the debt involved off the government figures so they could try to join the eurozone (along with other crud like PFI) but also meant the debt wasn’t government debt so the costs of debt servicing were far higher.

On British Rail costings the current railway network and ticket prices would be very profitable. Probably the same would be true of a non screwed up privatisation. Elsewhere in the world private railway networks are almost uniformly arranged so that they own their own track, trains, stations except where they share running rights with other companies. In Japan on a private railway line you know who is to blame for a problem, you know who is to thank for good service. In the UK everyone is busy finger pointing and funding an entire industry that exists solely to apportion blame.

As to removing subsidies – this would only work if airlines paid fuel duty, and the road network was also required to break even and buy carbon credits. The sudden appearance of enormous road tolls everywhere would destroy the country because the nation is now built on subsidised transport – road, rail and air.

Robert what you missed or not articulated is how the interest on the bonds gets paid.

A bond is just another form of borrowing.

Either the users pay for the interest and capital repayments via tickets, the company goes bust, or someone else pays for the users to get their tickets on the cheap.

There is no other choice.

Nick

Private vehicle ownership and road travel is to be discouraged.
Pedestrianisation and bicycles are to be promoted.
When i look back, pedestrianisation of city centres has been happening for decades, forms of public transport like trams and railways and ‘underused’ means such as waterways, are supposed to be encouraged. Private vehicles, especially automobiles and road use, discouraged.
Channel Tunnel is a rail link not a road link, the European Federation is being connected up by rail.

They claim it to be more environmentally friendly.

Thats the reason. Believe it or not as you choose.

It is disengenuous to blame the EU for this one. What the EU directive said was that national governments were required to separate the accounts for the operation of the track and the trains. There was nothing in it about privatisation or breaking up train operations or track maintenance into small profit-seeking units. Other countries across Europe have complied with this directive, but generally have a single state-owned operator while drawing in private capital in certain areas – particularly rolling stock leasing. In some instances, local and regional governments have put services out to tender in competition with the state operator leading to a better deal for the taxpayer

I’m still waiting on the Star-Trek transporter but you now have me wondering how many people I can fit in a Chinook helicopter, how fast they fly and how much people would pay to fly-in with Wagner* blasting out as we approached South London’s communists? Also how long it would be before Green Peace found fault with it.

(‘Apocalypse now’ reference for those of you who haven’t seen it).

The inexorable questions is then; *why do we have railroads?*

If we can get from A to B at a cost of say 5 units, why on earth would we use – and keep using, and massively subsidized – a method of getting from A to B that costs 20 units?

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And how pays the interest and repayment of capital on the bonds?

Ticket payers, or there is a subsidy going on.

The problem is that with Crossrail, the cost of building when funded by bonds, the ticket cost still can pay for the interest.

It’s a bonkers.

I suspect a major reason why John Redwood is in favour is that it goes near his constituency. Quite a few of his constituents then get a huge subsidy. It might be a good policy for an MP, but is still pork.

Nick