Plan that might derail

IN recent year, Railtrack has become virtually a term of abuse. The private company charged with ownership and maintenance of railway track and stations in the United Kingdom has been the subject of severe criticism following two serious rail accidents. After the second, at Hatfield, just north of London, it proved necessary to carry out repairs on many kilometres of track throughout the country. Services were badly disrupted.

Why, people asked, were these emergency repairs necessary? Was it because Railtrack had been failing to carry out routine maintenance? Was profit taking precedence over safety?

I have written about Britain's railways, and Railtrack, before. I return to the subject because at last Railtrack has been called to account. The Secretary of State for Transport, faced with yet another request for Government handouts to keep the company solvent, went to the High Court to ask that it should be placed in administration. Railtrack is now being run by a firm of accountants, Ernst & Young, who have been appointed administrators.

It is hard to find people who have sympathy for Railtrack. Its management of the railway system has been disastrous. It has also been inept in its public behaviour, paying a dividend to shareholders, for example, at a time when it was increasingly dependent on government funds. The five years of Railtrack have been described as a ``reign of error and handout-hunting''.

In the wake of the decision to put the company into administration — in effect to declare it bankrupt — there have been complaints from the financial sector that the shareholders have been treated badly, that they should receive compensation, and that there are implications for other proposed public/private finance partnerships.

Such complainants may be held to have a case. Whether they do or not, however, the fundamental lesson from the Railtrack fiasco is clear: The privatisation of the railways by the previous Conservative government was a disaster. It was badly conceived. It was driven by ideology rather than an understanding of transport needs. It was thoroughly irresponsible.

It is clearly possible for private companies to provide services more efficiently, and more economically, than nationalised corporations. The British telephone system is a good case in point; it is far more efficient than it was when it was a Post Office monopoly.

It made no sense at all, however, to break up the British railway system into a complex network of different train operating companies, none of them having any incentive to collaborate in the provision of a coherent service for passengers (or customers as they are now called: in itself an indication that the prime purpose of the providers has changed).

Nor was it honest to claim that the new organisation had replaced a monopoly — the old British Rail — with private companies subject to market forces. Railtrack, for example, was a monopoly. As such, it was not subject to the market. There was no competitor to force it to do its work more efficiently — or lose it. If there had been, the dismal incompetence of Railtrack would surely have led much earlier to its demise.

The method of its creation by the previous Conservative government was widely criticised at the time, not least by the labour party, then in opposition. Railway experts warned that the new system would not work. Shareholders, therefore, many would think, bought into a company whose prospects were not bright. They took a risk, and it has not paid off. My own instinctive reaction to that — and I am not alone — is ``tough''. As a taxpayer, I certainly do not want more of my money to be used to compensate shareholders; quite enough will be required to pay for the work that has to be done to get the railway system working properly.

As all this goes on, there is another potential disaster waiting to happen, namely the Government-favoured plan for the London underground which is similar to the discredited Conservative government arrangements for the national railway system. The Financial Times summed up what most people feel: ``There is now no easy solution for a fragmented railway system'', the paper declared, adding ``But the Government can and must go back on its plan for a similarly botched structure for the tube''. Hear hear to that. The Conservative government's approach was one hell of a way to run a railway, as anyone who has suffered rail travel in recent months will surely agree. The present Government would be equally irresponsible if it repeated its predecessor's mistake in London.

BILL KIRKMAN

The writer is an Emeritus Fellow of Wolfson College, Cambridge. E-mail him at wpk1000@cam.ac.uk

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