Was the Structure Adopted for Passenger Rail Privatisation in the UK More Appropriate to Maintaining the Status Quo?
BIRCH I, Ove Arup and Partners, and SMYTH A, Ove Arup & Partners and University of Ulster, UK
The full title of this paper is "Was the Structure Adopted for Passenger Rail Privatisation in the UK More Appropriate to Maintaining the Status Quo than to Encouraging Growth in Rail's Overall Market Share?" The motivation for this title was a concern th
The full title of this paper is "Was the Structure Adopted for Passenger Rail Privatisation in the UK More Appropriate to Maintaining the Status Quo than to Encouraging Growth in Rail's Overall Market Share?" The motivation for this title was a concern that the economic incentives presented to the new railway operators may not be sharp enough to bring about a major increase in rail's overall market share, let alone the realisation of Railtrack's ambitious vision to create "Over the next ten years . . . the World's Best Railway." How ambitious Ralltrack's vision is in reality depends upon the meaning of "World's Best Railway," although few people would argue that Britain's railway currently merits this status, however defined.
The performance of Britain's railway has come under greater scrutiny since privatisatlon. While patronage growth of approximately 15% was achieved within the first two years of privatisation, there has been a growing perception of under- performance in a number of areas. The issues receiving particular attention include the Train Operating Companies' (TOCs) reliability and punctuality performance, possibly reflected in the record numbers of passenger complaints being made, the provision of reliable information, anomalies in ticket retailing, and Railtrack's failure to achieve the investment targets set for it by the Rail Regulator. However, it is not proposed to undertake a general audit of the rail industry's recent performance in this paper, but to focus on the way the organizational structure is likely to influence the longer term performance of the industry, and in particular its influence on the prospects for appropriate investment in the industry.
The paper firstly attempts to establish some criteria for judgement which both reflect the claims made for privatlsation and the broader national and international transport agenda. International comparisons of the current status of rail travel within various national passenger transport markets are made to demonstrate that the UK has a great deal of leap frogging to do in order to achieve the status of a broadly defined "World's Best Railway" within the next ten years. Moreover they emphasize the need to reassass the suitability of the UK's new passenger rail industry structure for delivering substantial improvements in rail's status as a mass passenger transport mode. Once the scale of the challenge facing the UK rail industry has been demonstrated, the paper will assess the likelihood of it being met. A description of the new UK rail industry structure will be given, and an attempt to rationalise the decision to adopt such a structure will be made. The paper will then examine the adequacy of the micro - economic mechanisms embedded in the institutional structure of the new UK passenger railway. Some options for improving the institutional structure of the industry to better prepare it for its challenge will be provided.
Association for European Transport