Reply to post: Re: The Purpose of Government.

Why OH WHY did Blighty privatise EVERYTHING?

Sean Timarco Baggaley

Re: The Purpose of Government.

@Tim:

Commuter services invariably cost more money than they make, while inter-city rail services often turn a profit.

This is one of those pioneering mistakes I alluded to in my earlier post: conventional rail is optimised for moving lots of stuff in bulk, over long distances, at speed. As long as there was no better alternative, the short-haul commuter services did fine, but they were never anywhere near as profitable as long-haul express services.

Once electric trams and, later, motor cars and buses appeared, the railway lost its monopoly advantage and their commuter services haemorrhaged money. The two world wars provided temporary boosts at best, but left the network utterly knackered and worn out, which is why the mainline railways and London's own Underground network were all nationalised shortly after WW2. There was simply no money to repair the damage. The various Underground companies were also in financial trouble too. London couldn't afford to lose either the mainline railways or the Underground as they provided essential services, so taxpayers effectively bailed out the shareholders through nationalisation.

TL;DR version: the only part of a rail network that makes any profit is long-haul express passenger services. This is why the Japanese and French didn't build high-speed metros, but high-speed *express* trains. That's where most of the money in rail transport is.

Residual railway property is peanuts by comparison, so if George Osborne is looking to flog off more bits of railway land, (and both Railtrack and Network Rail have already thought of this, so all the low-hanging fruit has already gone), he's going to be disappointed by the return. I've read that he expects to make £1bn out of it, but that's barely six months of construction work on Crossrail. There's no scope for a windfall here.

If Osborne wants to cut the burden of commuter railways on the taxpayer, I'd advise him to look into why it costs so f*cking much to build *anything* in the UK these days. HS2 isn't a bad idea in principle, but its price tag is ludicrously high. Phase 1 is just 100 miles of railway through piss-easy rolling countryside. There's absolutely no excuse for it to cost that much. None. Even allowing for HM Treasury's moronic "Optimism Bias" rules, it's taking the piss.

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