Looking to Great Britain: Privatization with serious consequences

The majority of transport politicians in the region often look to Great Britain, a country that years ago privatized rail transport – with mostly extremely negative consequences. In Great Britain, the sentence that it is safer to bet on a racehorse than to arrive by train in time has almost become proverbial. The notorious delaysare just the tip of an iceberg of problems stretching between Brighton in the south and Inverness in the north. The British press, including high-reach newspapers such as the Daily Mirror and the Daily Mail, regularly publish entire series of reports in which readers have their most curious and sometimes hair-raising experiences with the so-called “worst railway systemdescribe Europe”. But the difficulties go far beyond chronic unpunctuality; The booking system with up to 16 different tariffs per route also causes great confusion and confusion, very similar to Deutsche Bahn.

Customer frustration and rising prices: the effects of railway privatization

Not only the tariff system is opaque, the staff is also often overwhelmed. Only a few conductors can provide reliable information about delays, train cancellations or connections from other operators. However, for British rail customers it is particularly difficult to see that ticket prices have risen noticeably after privatization: Even with special quotas, theAverage prices around a quarter. On main routes, regular prices even exploded by up to 245 percent. At the same time, customers report a striking loss of quality: Numerous complaints about failed trains, defective doors, overcrowded wagons and even seats infested with fleas have resulted in the Strategic Rail Authority being licensed to the Connex company.withdrawn important connections. Many of these grievances are a direct consequence of the railway sector’s underfunding, which has been underfunded since the mid-1960s, but was massively intensified by the railway reform in the early 1990s.

Turbo privatization under John Major: Disassembly of a state company

The reform process, which began under Prime Minister John Major in 1993, set in motion an unprecedented wave of privatization. Margaret Thatcher had hardly dared to take the railway during her long reign; Only hotels and some ferry connections were sold. Her successor, John Major, on the other hand, smashed British Rail completely. This was done by conviction that thestate should stay out of business. The infrastructure company RailTrack was brought to the stock market in 1996, but filed for bankruptcy after just five years. Since 2002, it has been publicly reintroduced as a network rail – a renationalization that caused high costs for taxpayers.

Consulting fees, staff reductions and route fragmentation

The government consulted numerous external advisors who were oriented towards short-term revenues and often ignored the specifics of the railway sector. A total of around one billion pounds were spent on consulting services. At the same time, a massive downsizing set in: The number of employees fell from almost 47,000 in 1996 to just over 38,000 five years later – aTrend, which had been initiated by the Serpell Committee’s recommendations since the 1980s. Labor productivity increased, but also the burden on the remaining employees.

Winners and losers of privatization

Institutional investors and upper management in particular benefited from material privatization. The Rolling Stock Companies (Roscos) made high profits, and leading managers received double-digit millions. Meanwhile, the maintenance of the infrastructure was outsourced to various private companies, causing the responsibility to fragment. The logistic divisionwas taken over by large companies such as Deutsche Bahn, which further fragmented the British market.

Fragmentation and the Consequences for Safety and Reliability

The railway reform smashed British Rail vertically – through the separation of infrastructure and operations – as well as horizontally through the split into over a hundred individual companies. This fragmentation weakened the integrative force of the railway system. Operators were no longer responsible for the entire route network, but only for individual elements, resulting in short-term thinking and apassed on risks. The granting of operating licenses created regional monopolies and there was no real competition.

Monopoly formation and lack of competition

Competition rarely exists in the British railway system. Few big companies like National Express, Arriva, Virgin/Stagecoach and the First Group now control the majority of the travel kilometers and revenue. In practice, there is usually only one operator per route, so travelers have hardly any alternatives. In bus transport, too, regionalMonopoly that allow companies to largely set prices and offer themselves.

Security crises and catastrophic consequences of fragmentation

The Hatfield train accident in October 2000 marked a turning point. The crack on the rail head, which was not remedied for years due to disputes, four people died and numerous others were injured. The reason was clearly in the lack of coordination between the various companies, which were now separated from one another. Numerous routes had to be used as slow driving pointsbe marked or blocked. The effects were devastating: Half of the trains were late, the number of passengers collapsed and enormous economic losses were incurred.

Bureaucracy, Costs and Renationalization

The large number of new business units, subcontractors and leasing companies has made the system extremely confusing. The operators are trying to maximize short-term profits by reducing staffing and stopping investments, but this will degrade infrastructure and service in the long term. The withdrawal of the infrastructure in the hands of the state and upcoming modernizationscontinue to cause high costs. To date, only a third of the British network is electrified – and passengers pay the bill: since the privatization, ticket prices have more than doubled on average.

Political Motives and International Teachings

The privatization of the British railway system was not promoted out of business necessity, but above all from political calculations. The short-term income generated should relax the budget situation. Historians point out that railway privatizations were often ideologically motivated. British Rail showed remarkable things in the year before the reformIncome from transport services – values that were otherwise only achieved by the Swedish state railway.

Doubts about the railway privatization as a model for success

British rail privatization is now considered a deterrent example for other countries. The fragmentation, the neglect of the infrastructure and the loss of quality of service, as well as the high costs for the state and passengers, show that competition does not automatically lead to more efficiency. The development in the UK suggests that a rail transport system is based on integration,State responsibility and long-term planning should be based – and not on short-term gains and breaking down into countless units for the benefit of fewer investors.