Britain Joins Europe In Privatizing Trains
Officials hope for improved efficiency and service
EUROPE'S trains have begun a controversial journey out of the public sector and into private ownership.
British Rail is the latest national train system to be shunted toward a capitalist future. John Major's government has decided to sell off chunks of it, hoping that injections of private capital will boost standards of efficiency and comfort.
At the root of the governments' wish to point trains toward the private sector is a shortage of state investment capital.
Sir Bob Reid, chairman of British Rail, has routinely pleaded for more state funds to replace outdated rolling stock and infrastructure. Last autumn, however, the cash-strapped government told him that BR's current 1 billion pounds ($1.42 billion) a year grant is to be halved within two years.
John MacGregor, Britain's transport secretary, put an end to BR's monopoly on rail travel Feb. 3 by announcing that initially seven sections of the network, accounting for one-third of current ticket revenue, were being earmarked to become private franchises.
Three of the franchises are for services on Britain's profitable inter-city network. The others will give private operators a chance to turn loss-making "misery" lines into money-spinners.
Mr. MacGregor also ordered the creation of a separate company - Railtrack - to manage track, signaling equipment, and other hardware to be used by what he hopes will become an interlocking system of private passenger and freight services. Railtrack will sell private operators rights of passage on the national network.
MacGregor says belief is growing in Europe that passengers' interests will be best served by entrepreneurs with new ideas and the drive needed to raise standards of service. He said Britain shares with Germany, Sweden, and other European countries a growing shortage of government funds for investment in railway systems.
Germany opted last year for a long-term privatization strategy. The east and west German rail systems will be merged by the end of 1993, when a single public sector company will be formed.
The company will be divided into passenger, freight, and infrastructure sections, each with commercial objectives. By the year 2000, officials expect the three sections will be ready for privatization.
In Sweden, a separate track authority provides infrastructure for long-distance services which remain in state ownership, and for local services which are being run by local government authorities boosted by private cash. The Swedish track company enjoys a state subsidy. Britain's Railtrack, however, will be expected to make an 8 percent return on investment.
The British government's move has been denounced by opposition politicians and some government supporters who say Britain will end up with a chaotic rail system in which unprofitable services will disappear, leaving large parts of Britain, including important tourist areas, inaccessible by train.
John Prescott, transport spokesman for Britain's opposition Labour Party, dismisses MacGregor's plans. "By selling off the most profitable routes, the government is pleasing its capitalist friends and ensuring that the rest of the BR system will wither," he said.
Rail travelers have expressed their misgivings, too. Transport 2000, a citizens' pressure group, greeted the MacGregor plan with a volley of criticism.
Stephen Joseph, its director, said new rail privatization laws could lead to fare rises, cuts in services, and line closures, and produce jams and pollution on Britain's already crowded roads.
But the government insists that its aim is to sell off BR bit by bit. "The ultimate goal remains complete privatization," MacGregor said.
The MacGregor blueprint also has been attacked by Conservative members of Parliament worried that their constituents will be adversely affected by a breakup of the BR network.
Lord Ridley, a former transport secretary under Margaret Thatcher who cheerfully describes himself as a "dedicated apostle" of privatization, angered Prime Minister Major by forecasting that putting the train system into private ownership would lead to "fewer customers riding clapped out trains at higher fares."
"There are some things that should not be privatized," he said. "BR is one of them."