UK Govt Inquiry Concludes Private Rail A Rip Off


londonAs we await the expected Government rail funding decision involving some joint private enterprise component, a report today from the UK House of Commons should serve as a warning.
UK’s House of Common’s transport committee has released a blistering report on what a disaster Britain’s “muddled” rail franchising model has been and warns that in the recession, there’s no guarantee more companies won’t go broke and walk away from their obligations to provide services.
In the report, the MPs:

  • accuse the companies of making money but having no obligation to serve the public
  • say the companies don’t give a toss about the needs of passengers
  • are disturbed how the companies have blatantly put up fares six or seven times the rate of inflation
  • note that a bit like some local property developers and finance companies here, the UK rail companies have set  up their company franchise so they protected from any financial fallout or legal threat
  • In short when it comes to private rail: “There is no point in involving the private sector if it simply takes the profits in the good times, leaving the taxpayer to pick up the tab in bad times”

The report comes after the biggest contract National Express will have to be nationalised. It says the second collapse of the East Coast mainline franchise in three years was “typical of a model that lets such companies make money in good times then abandon obligations in hard times.”
Ahead it says based on its findings, other transport projects involving private money could be at risk “if the taxpayer is forced to pick up the bill for the failure of other franchises.” These include:

  • Crossrail, a new high frequency, convenient and accessible railway for London and the South East. From 2017 Crossrail will travel from Maidenhead and Heathrow in the west to Shenfield and Abbey Wood in the east via new twin tunnels under central London. It will link Heathrow Airport, the West End, the City of London and Canary Wharf.
  • road upgrades
  • a new high-speed rail line

The system has been questionable for years. Companies could bid for the right to run trains on routes. The train company offering the highest premium payments or the lowest level of state backing often won it. Too bad if the company sucks at delivering great customer-focused services.
The recommendations don’t do away with franchising as such but urge the government to drop the current model and try different forms of franchising, including letting them for longer terms with options to cancel if performance is unsatisfactory.

And it insists any future franchise must be more passenger- focused such as a recently let South Central franchise that will include cycle and car parking spaces at stations.

The other day I reported a Victoria governemnt inquiry into its train service woes.

The UK Government is finally cracking into the years of complaints. It’s just announced that the House of Commons Transport Select Committee will conduct an update inquiry into the London Underground and the Public-Private Partnership Agreements. Following its report on these issues in 2008,  the Committee will review the progress that has been made since that time, the evidence that has come to light and the prospects for the future of the London Underground.
In particular, the inquiry will address the following questions:
1. What lessons can be learned from the collapse of the London Underground PPP Agreement with Metronet?
2. Are these lessons being applied to the London Underground PPP Agreement with Tube Lines?
3. How has the upgrade work progressed since the demise of Metronet?
4. What contractual arrangements are appropriate for the future?
5. What risks, if any, are associated with the PPP Agreement with Tube Lines?
6. What impact is the current economic situation having on transport PPP and PFI schemes and what are the financial implications for other transport schemes?
7. What role has the Government played in these matters?
Meanwhile the UK government will mask the bad news with an announcement of a major investment in train electrification later this week.
A multi-million pound investment will see the Great Western line electrified from London Paddington to Cardiff in Wales and a line from Manchester to Liverpool under the Northern Rail Company franchise also expected to be electrified.




  1. William M says:

    Reminds me of the state of independent television in the UK before it was almost swallowed up in the late 1990s. Surely the UK Government have set up an independent body to regulate the industry, force franchises to bid for access based on quality of service and not just the monetary bid they put in. Ofcom and its predecessors in the UK (ITC, IBA and ITA) did exactly this with the independent television sector in the UK, and would manage complaints from all stakeholders, and usually did a good job. The fatal mistake they made in the late 90s was to allow for each of the regional franchises to be swallowed up whole by others, and eventually, the things that made those regional franchises special disappeared. The same may happen to rail in the UK, but you still have to ask where the independent regulating body is. Even if I miss British Rail dearly ;-)

  2. @William M - as a long suffering customer of the UK rail franchise system, the reality is that the companies have managed to ensure they negotiated easily achieved targets.

    In three years of travel, I have never once seen the Customer satisfaction surveys used as part of the performance measurements being carried out on the overcrowded commuter trains that most passengers use every day. Customer complaints forms are hard to get


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