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| Public v private: what next for the ownership of Britain's railways? | Public v private: what next for the ownership of Britain's railways? |
| (6 months later) | |
| The man charged with being the voice of rail passengers is peering over a locked gate to an empty platform at Alton station in Hampshire, now the end of the branch line. | The man charged with being the voice of rail passengers is peering over a locked gate to an empty platform at Alton station in Hampshire, now the end of the branch line. |
| In the 1970s, the track onwards to Winchester was deemed surplus to requirements and closed by British Rail; today, when the industry is clamouring for more capacity, that track and platform is used for a steam heritage railway, the Watercress Line. | In the 1970s, the track onwards to Winchester was deemed surplus to requirements and closed by British Rail; today, when the industry is clamouring for more capacity, that track and platform is used for a steam heritage railway, the Watercress Line. |
| Back on the main station, a South West Trains service waits to carry Alton’s £4,000-a-year commuters for the hour-or-so journey to London Waterloo. | Back on the main station, a South West Trains service waits to carry Alton’s £4,000-a-year commuters for the hour-or-so journey to London Waterloo. |
| “That train is owned by a bank, leased to a private company, which has a franchise from the Department for Transport to run it on this track owned by Network Rail, all regulated by another office – it’s complex,” ruminates Anthony Smith, chief executive of watchdog Transport Focus. | “That train is owned by a bank, leased to a private company, which has a franchise from the Department for Transport to run it on this track owned by Network Rail, all regulated by another office – it’s complex,” ruminates Anthony Smith, chief executive of watchdog Transport Focus. |
| Another shakeup of the UK rail network’s complicated ownership structures is on the cards and Alton, famous for “sweet Fanny Adams” – a young girl murdered here in 1867 – could be a small part of the test bed. | Another shakeup of the UK rail network’s complicated ownership structures is on the cards and Alton, famous for “sweet Fanny Adams” – a young girl murdered here in 1867 – could be a small part of the test bed. |
| A review into the future financing of the railway is due to be published alongside the budget next week – a document, campaigners and unions fear, that could usher in a stealth privatisation of Network Rail. | A review into the future financing of the railway is due to be published alongside the budget next week – a document, campaigners and unions fear, that could usher in a stealth privatisation of Network Rail. |
| “Devolution” and “alternative finance” are the buzz phrases, and this so-called Wessex route operated by South West Trains, with various veins threading out from Waterloo through south-west London suburbia to Southampton, Portsmouth and Dorset, has been mooted as a possible first stretch of the British railway network to be either sold or let as a concession to an operator with responsibility for both the track and trains. | “Devolution” and “alternative finance” are the buzz phrases, and this so-called Wessex route operated by South West Trains, with various veins threading out from Waterloo through south-west London suburbia to Southampton, Portsmouth and Dorset, has been mooted as a possible first stretch of the British railway network to be either sold or let as a concession to an operator with responsibility for both the track and trains. |
| The review, conducted by HS1 chief executive Nicola Shaw, was commissioned by the Treasury last summer in the aftermath of the meltdown of Network Rail’s £38.3bn five-year investment plan. The chairman was axed and ministers pointed angry fingers: the Shaw review had the look of bringing the track owner to heel. | The review, conducted by HS1 chief executive Nicola Shaw, was commissioned by the Treasury last summer in the aftermath of the meltdown of Network Rail’s £38.3bn five-year investment plan. The chairman was axed and ministers pointed angry fingers: the Shaw review had the look of bringing the track owner to heel. |
| The potential break-up of the national network, selling it off route by route to private firms in the manner of utilities, or operating long-term concessions – much as the stretch of high-speed track Shaw herself runs – looked to be clear avenues. | The potential break-up of the national network, selling it off route by route to private firms in the manner of utilities, or operating long-term concessions – much as the stretch of high-speed track Shaw herself runs – looked to be clear avenues. |
| Full privatisation had been politically toxic since the days of Railtrack, which spent six years presiding over a series of disasters in which passengers were killed, before going bust. But Shaw insisted all options were on the table. | Full privatisation had been politically toxic since the days of Railtrack, which spent six years presiding over a series of disasters in which passengers were killed, before going bust. But Shaw insisted all options were on the table. |
| The mood music, though, appears to have changed. Instead of the Shaw review being a turning point, it now appears more a staging post on a journey Network Rail has already embarked on, to the satisfaction of the Conservative government. | The mood music, though, appears to have changed. Instead of the Shaw review being a turning point, it now appears more a staging post on a journey Network Rail has already embarked on, to the satisfaction of the Conservative government. |
| Mark Carne, Network Rail chief executive, speaks enthusiastically of the capital discipline now imposed on a sector where all parties – including politicians eager for new development – had turned a blind eye to the maxed out credit card. | Mark Carne, Network Rail chief executive, speaks enthusiastically of the capital discipline now imposed on a sector where all parties – including politicians eager for new development – had turned a blind eye to the maxed out credit card. |
| In a recent speech to industry leaders, transport secretary Patrick McLoughlin struck a conciliatory note: “Perhaps the government was overambitious … we all made mistakes.” | In a recent speech to industry leaders, transport secretary Patrick McLoughlin struck a conciliatory note: “Perhaps the government was overambitious … we all made mistakes.” |
| Most importantly, perhaps, McLoughlin sent a clear signal that he was expecting “evolution not revolution” and that if Shaw’s report was advocating a radical upheaval, the government might not be responding any time soon, even if there wasn’t an EU referendum to ensure the delay. | Most importantly, perhaps, McLoughlin sent a clear signal that he was expecting “evolution not revolution” and that if Shaw’s report was advocating a radical upheaval, the government might not be responding any time soon, even if there wasn’t an EU referendum to ensure the delay. |
| Shaw is tight-lipped on the contents of her report, but hinted at something relatively consensual: “Dictatorial isn’t really my style.” | Shaw is tight-lipped on the contents of her report, but hinted at something relatively consensual: “Dictatorial isn’t really my style.” |
| But some element of private money in the infrastructure appears inevitable. In an email to all staff in February, Carne wrote: “You will read a lot about ‘privatisation’ versus ‘nationalisation’. These definitions miss the point.” | But some element of private money in the infrastructure appears inevitable. In an email to all staff in February, Carne wrote: “You will read a lot about ‘privatisation’ versus ‘nationalisation’. These definitions miss the point.” |
| New Network Rail chairman Peter Hendy’s own review of its problems, published in late autumn, offered to stump up £1.8bn by selling off railway arches and station retail space, to make sure the five-year plan could go ahead, with the chancellor granting an extra £700m. | New Network Rail chairman Peter Hendy’s own review of its problems, published in late autumn, offered to stump up £1.8bn by selling off railway arches and station retail space, to make sure the five-year plan could go ahead, with the chancellor granting an extra £700m. |
| On Friday, Network Rail went further, announcing it had hired KPMG to market its power lines to global investors, and would also be looking to raise money from its telecoms assets. | On Friday, Network Rail went further, announcing it had hired KPMG to market its power lines to global investors, and would also be looking to raise money from its telecoms assets. |
| This was quickly denounced as the “thin end of the wedge” by the RMT rail union; if Network Rail had clung to a distinction when announcing the sale of “non-core assets”, the electricity substations and overhead lines that power most trains clearly cross the operational line. | This was quickly denounced as the “thin end of the wedge” by the RMT rail union; if Network Rail had clung to a distinction when announcing the sale of “non-core assets”, the electricity substations and overhead lines that power most trains clearly cross the operational line. |
| Long-time industry observers are scathing: Roger Ford, industry editor of Modern Railways, described proposals to flog off its power and telecoms networks as “madness on a stick” that highlighted the inexperience of the board in rail. Telecoms infrastructure, Ford said, had indeed been sold off before under Railtrack – and expensively rebuilt. | Long-time industry observers are scathing: Roger Ford, industry editor of Modern Railways, described proposals to flog off its power and telecoms networks as “madness on a stick” that highlighted the inexperience of the board in rail. Telecoms infrastructure, Ford said, had indeed been sold off before under Railtrack – and expensively rebuilt. |
| “They’ve been through this once and it was a disaster. The Germans and the French tried it too and had to rebuild the networks. It’s gone wrong in three countries – why do they think it’s going to be any different now?” | “They’ve been through this once and it was a disaster. The Germans and the French tried it too and had to rebuild the networks. It’s gone wrong in three countries – why do they think it’s going to be any different now?” |
| Even those who believe private finance can usefully be brought in balk at this. Jon Hart, transport legal expert at Pinsent Masons, points out: “If I am a commuter on the late running 7.15am, is that down to the train, the operator, poor track or the fact Newco hasn’t paid its utility bill? This model could introduce a new layer of complexity to a complex model.” | Even those who believe private finance can usefully be brought in balk at this. Jon Hart, transport legal expert at Pinsent Masons, points out: “If I am a commuter on the late running 7.15am, is that down to the train, the operator, poor track or the fact Newco hasn’t paid its utility bill? This model could introduce a new layer of complexity to a complex model.” |
| Under current plans, responsibility for individual routes will be devolved. The Wessex route was also the basis for an experiment that saw a so-called “deep alliance” between Network Rail and the train operator, Stagecoach-owned South West Trains, with a joint management team responsible for the track and trains that was regarded as positive despite eventually breaking down over money. | Under current plans, responsibility for individual routes will be devolved. The Wessex route was also the basis for an experiment that saw a so-called “deep alliance” between Network Rail and the train operator, Stagecoach-owned South West Trains, with a joint management team responsible for the track and trains that was regarded as positive despite eventually breaking down over money. |
| Elsewhere, different targets and financial incentives for Network Rail and train operators have routinely led to a blame game. Hendy suggested last week that Shaw could help align those incentives for all parties, saying he was “optimistic that we can live in greater harmony to deliver a better service on a daily basis”. | Elsewhere, different targets and financial incentives for Network Rail and train operators have routinely led to a blame game. Hendy suggested last week that Shaw could help align those incentives for all parties, saying he was “optimistic that we can live in greater harmony to deliver a better service on a daily basis”. |
| All will hope so. Smith’s organisation surveyed passengers last time a major overhaul was taking place, the abolition of the Strategic Rail Authority in 2005 – where Shaw was chief operating officer – and he recalls: “People only had a very rough idea of who did what. When you explained it, people lost the will to live – or were amazed anyone got the trains running at all.” | All will hope so. Smith’s organisation surveyed passengers last time a major overhaul was taking place, the abolition of the Strategic Rail Authority in 2005 – where Shaw was chief operating officer – and he recalls: “People only had a very rough idea of who did what. When you explained it, people lost the will to live – or were amazed anyone got the trains running at all.” |