SafeSpeed wrote:
PeterE wrote:
The passenger numbers certainly aren't spin, and haven't been achieved through using subsidy to provide particularly low fares - indeed, people are often heard complaining about the high level of many rail fares.
I see no reason in principle why the state shouldn't fund the provision of transport infrastructure - by the same line of argument, all pavements and footpaths are subsidised. Also many road improvements in more remote areas (such as, say, all the improvements on the A9 north of Inverness) cannot be regarded as "profitable" in a strict sense.
The current level of subsidy (which I agree is much too high) largely stems from
(a) the complex and fragmented way in which the railways were privatised, which removes much incentive to operate more profitably, and
(b) the misguided public view that any price is worth paying for rail safety, which leads to much unnecessary gold-plating
In the later years of British Rail, when they had the commercially-focused Sector organisation, the overall level of public subsidy was less than a third of what it is now.
I don't think you have come anywhere close to answering my question.
I don't object to public investment in transport infrastructure, but I can't think of a single reason why a transport system that's desired and well used shouldn't become a profit centre. I appreciate that there would be a need for unprofitable routes, but why shouldn't the profitable routes provide enough profit to cover the unprofitable routes?
In my view the current levels of rail subsidy are far too high - and the fact that they are three times what they were in 1997, despite record passenger numbers, suggests gross mismanagement, particularly at the political level.
The way the railways were privatised was a total dog's dinner, and the present government were very slow to realise this and make any attempt to get to grips with the problem. In principle, I fully support privatisation of rail operations, by the way - I just question the way it was done.
I'm pretty certain there is a core railway network, perhaps amounting to between half and two-thirds of the current network, that could be operated profitably. Anyone charged with running a profitable railway would immediately take the red pencil to a lot of routes and say "if you want to keep these open for reasons of social or regional policy, then pay us to run them, but they'll never be profitable on their own". This would obviously include the railway line that runs a couple of miles from your house, Paul
As well as the two points mentioned above, there are other factors inhibiting railway profitability, including:
- obligations from the government to run particular patterns of services, and to adopt particular fare structures
- trade union power which prevents the adoption of regional pay scales and more flexible working patterns
- the insistence on main-line standards of safety and maintenance for even the most lightly-used branch lines
It should also be pointed out that the freight operator
English Welsh & Scottish Railways is profitable - maybe why it so rarely gets a mention in the news. It was sold off
en bloc in 1996 to an American company widely portrayed as being somewhat ruthless - but they seem to have sorted it out, and claim a 50% increase in freight tonne/km since then.
Quote:
The bottom line is that I tend to believe that the market makes good choices. If the market doesn't want rail at its true cost then we'd need some amazingly compelling reasons to waste cash providing it.
In general markets do make good choices, but their efficiency diminishes as you move from the micro to the macro level. Land use and transport planning are not suitable areas to leave entirely to market forces.
Even in the 1830s and 1840s when much of the current rail network was being planned, it was all approved by Act of Parliament, in return for which the railway companies accepted restrictions on fares, conditions of carriage etc. - it was never a totally free market system.
Decisions to close particular stretches of railway, and maybe convert them into roads, are taken ultimately by government, and generally involve considering non-economic factors.
In fact it's arguable that if you took a more rigorous market-based approach to railway economics, but permitted lower safety, maintenance and labour standards on minor routes, you might actually end up with more operational railway mileage rather than less.
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Are you saying that relief efforts are currently using rail transport?!
