£8bn investment in rail, what am I missing....
Discussion
So, why exactly am I the taxpayer paying for a private companies new trains exactly???
They privatised rail, made them responsible for their rolling stock and services, they cost save and reduce carriage numbers, charge more for tickets and generally provide a s
t service.
Now, the government are buying them new carriages???? How the fk does that work?
I understand the track investment as that's now centrally managed by the government through Network Rail isn't it?
I'm just glad I hardly ever have to use it.
They privatised rail, made them responsible for their rolling stock and services, they cost save and reduce carriage numbers, charge more for tickets and generally provide a s
t service.Now, the government are buying them new carriages???? How the f
k does that work?I understand the track investment as that's now centrally managed by the government through Network Rail isn't it?
I'm just glad I hardly ever have to use it.
I spend close to 5 grand a year for a season ticket to get to work and for that extortionate sum I am often sitting on the floor as there aren't enough seats, late because they have been cancelled/faulty/replaced by a bus, and they seem to change timetables on a whim. This morning I travelled from Portsmouth to London in a train with no heating while the outside (and therefore inside) temperate was 0c.
I too wonder why we're supporting the bds!
I too wonder why we're supporting the b
ds!we have to support them. As I said in another thread, there's no money in railways. Nearly all passenger rail services in the world (the UK is unique in privatizing it after nationalization) are state-owned and run at a loss or near loss. India, for example, with hundreds of millions of users and horrific quality, turns over a $9,000 profit a year. They use train carriages made 80 years ago in the UK...
Basically, people moan at the government, who has to subsidize the private companies, to stop spending money on the railways. So, they do. But, this means that for any of these companies to actually exist properly (ie, not get torn apart by angry shareholders) they have to hike up the prices. This happens every year, the government hacks down it's subsidies to the rail companies, who have to raise prices to make up for the short fall.
All of this means they never make any profit (apart from perhaps one line per franchise holder) that is actually big enough to upgrade their fleet or stations.
Another thing to remember with overcrowding is that Britain officially has the oldest railway system in the world. Most of our stations are at least 100-150 years old, built for times gone by. You look at Europe, and what happened? We bombed it all in the war, so they built it brilliantly from scratch, which is why there's is so very much better.
Britain's main problem is that it's badly privatized (most companies are forced to stop at stupid places and miss other stations so they don't compete too much) and incredibly old and overcrowded, and overseen by many successive governments and ministers who don't even want to start trying to fix it, as it will undoubtedly take at least 10 years to get it in to what could be called and acceptable piece of infrastructure.
This is from someone studying transport economics at A-level, so not a typical armchair economist...
Basically, people moan at the government, who has to subsidize the private companies, to stop spending money on the railways. So, they do. But, this means that for any of these companies to actually exist properly (ie, not get torn apart by angry shareholders) they have to hike up the prices. This happens every year, the government hacks down it's subsidies to the rail companies, who have to raise prices to make up for the short fall.
All of this means they never make any profit (apart from perhaps one line per franchise holder) that is actually big enough to upgrade their fleet or stations.
Another thing to remember with overcrowding is that Britain officially has the oldest railway system in the world. Most of our stations are at least 100-150 years old, built for times gone by. You look at Europe, and what happened? We bombed it all in the war, so they built it brilliantly from scratch, which is why there's is so very much better.
Britain's main problem is that it's badly privatized (most companies are forced to stop at stupid places and miss other stations so they don't compete too much) and incredibly old and overcrowded, and overseen by many successive governments and ministers who don't even want to start trying to fix it, as it will undoubtedly take at least 10 years to get it in to what could be called and acceptable piece of infrastructure.
This is from someone studying transport economics at A-level, so not a typical armchair economist...
The trains themselves aren't all that different from the tracks. The franchises typically run for 7 years but the carriages will probably be around for 30 years - in other words possibly seeing 3-4 different franchises. Why would a private company make a substantial investment that it will never see a return on (if someone else takes over the franchise before the investment enters service)?
The other issue is that most of the franchises are not required by contract to invest in capacity when overcrowded. I believe Chilterns is the exception but all the others simply have the option of adding more capacity at their own expense - which brings us back to the issue of the franchises being too short. Hence why the Government has to step in at the moment and increase capacity with public investment.
Anyway it appears most of the new carriages are to run the new Thameslink and Crossrail networks (freeing up some existing Thameslink/London Overground carriages for redeployment). But do the Government actually buy/lease the carraiges rather than acting as a guarantor?
The other issue is that most of the franchises are not required by contract to invest in capacity when overcrowded. I believe Chilterns is the exception but all the others simply have the option of adding more capacity at their own expense - which brings us back to the issue of the franchises being too short. Hence why the Government has to step in at the moment and increase capacity with public investment.
Anyway it appears most of the new carriages are to run the new Thameslink and Crossrail networks (freeing up some existing Thameslink/London Overground carriages for redeployment). But do the Government actually buy/lease the carraiges rather than acting as a guarantor?
Asterix said:
F93 - out of curiosity, how do they compete? How do you rock up with your own train and start stopping at stations?
Probably sounds like a piss take but isn't - I haven't been on a UK train for many a year.
Well, i'll use an example. Probably sounds like a piss take but isn't - I haven't been on a UK train for many a year.
Recently a train company started up that operated services from Newcastle to London. It cost £3 million to set up and they had to rent old train carriages (new ones are prohibitively expensive). However, to stop them from 'competing' too well (they could undercut most of the established train companies because they rented their trains very cheaply) the regulatory authority banned them from stopping at any station south of York. So they could go Newcastle > any stations > York > London.
They'd compete the price down by, let's say, picking up passengers at Peterborough and taking them down to London for a cheaper price than the current firms do there. This would annoy the firms that currently serve Peterborough and they had have to cut their prices to compete. These firms would then lose masses of money, because their franchise agreements mean they must serve peterborough, but now they have to do so at a massive loss. Massive loss = massive increase in subsidy payment for government.
It's daft really, they've bankrupted the system into not making a profit... basically it's very heavily regulated and competition (Which would allow profits and cut prices eventually) never happened because the franchise system is just too slow to respond.
Edited by F93 on Thursday 25th November 23:37
-Pete- said:
Does anyone make a profit from the trains? I'd imagine the private companies pay a dividend. It seems crazy to spend taxpayers money to subsidize private companies providing a p15s-poor service.
Some do, but only on one or two lines per company. For example, the Cambridge to London line turns a profit, however the company that runs it, First Capital Connect (part of First, a major transport company, they do buses too) is allowed to keep those profits. But,they are never, across the country, enough to do anything useful with. The do however have to run many many other routes though that make no money and make losses of millions of pounds, but are vital to the economy. However, the government gives money to make sure they run on these unprofitable routes (Which is, essentially, about 90% of the train routes in the country). On those routes they compete for subsidies, so to speak, ie saying to the government 'hey! we're do it REALLY cheaply so you needn't give us so many subsidies. Edited by F93 on Thursday 25th November 23:52
Fittster said:
Were railways profitable before nationalisation in 1947?
Didn't really matter. During the war, the railways were run centrally by the Government. In between bombing raids and material shortages, the railways were worked extremely hard. Obviously we had neither the time nor the resources to spare in keep it in good condition beyond the immediate future. After the war, this left the railway network in tatters and the big four railway companies (themselves the product of post-WWI enforced consolidation) were effectively bankrupt. The Government were supposed to pay for the wartime use of the railways but they were effectively bankrupt into. So rather than payout, they elected to swap British Transport Stock for stock in the railway companies - quite handily this fitted in with the Government's wider nationalisation agenda at the time.The railways were probably at their peak shortly before the first world war. The intense competition (over 100 companies back then) saw rival lines parallaling each other along the same routes - which proved quite useful in bypassing Luftwaffe damage but not so useful when trying to run a rail network that faces falling passenger numbers and deep debt following failed modernisation attempts. Hence the Beeching Review of the 60s.
As F93 said earlier, you have to remember that many parts of our rail infrastructure is 100-150 years old and has had little investment despite the demands placed upon it at times.
Fittster said:
Were railways profitable before nationalisation in 1947?
Yeah, but only ever before 1913. (It was the same in the US, the New York Stock Exchange around 1900 was dominated by railway companies.) In the UK by 1913 everything worked properly as most companies (All privately owned) had built the system, owned everything and had essentially, corrected the market so it worked fine. There were quite a lot of companies and they all turned a profit. Companies that failed were bought by larger ones and prices were generally acceptable. But most importantly, the industry was rich enough (because of low taxes and little regulation) to buy new carriages and engines frequently and build new lines were they needed.
However, in world war one the government took control of the whole system. This meant that it was used to move troops to ports and goods back into the country. Literally, most of the rolling stock was shoved all over the place and some track previously used frequently was abandoned and some used a lot. This meant that in 1919 when it was handed back, it was a complete mess and all over the place. No companies made a profit, so it merged into four large ones. These started to tick-over fine, but had no money to really do anything, only run themselves. Then the depression came and they all fell apart, along comes WW2 and its government control again, then nationalization.
(Ha, or what he said above )
Edited by F93 on Friday 26th November 00:11
Asterix said:
Cheers for the reply mate.
As usual - the lack of common sense and a real open market means that the consumer, you and (well not me...) suffers.
Surely you gain with it not being a true open market? If it was, then st would've withdrawn, as there would be no subsidy so huge losses and / or obscene prices in all case all the time. This would force more people onto the road and cog up the road system even quicker. Not to mention the bigger losses the motor insurers would make from ore accidents & injury claims on more congested roads, leading to even higher premiums.As usual - the lack of common sense and a real open market means that the consumer, you and (well not me...) suffers.
Oh and then there's the freight issues too, no point maintainign a rail network just for freight, so lets have some more lorries all doing 40 mph and bigger ones, driven by more psychopathic Eastern Europeans too.
I've never understood why railways are so expensive.
I commute to london on a coach. The coaches all look new, I have a guaranteed seat, its immaculate, with a working toilet, free wifi, it picks up in my road, the staff are excellent.
It costs 2/3 of the cost if a rail ticket, and its a profitable business.
The only downside is that it has to move through the congested streets of london, but door to door its only slightly longer then a rail journey.
Pave over the railways and let private coach companies run services
I commute to london on a coach. The coaches all look new, I have a guaranteed seat, its immaculate, with a working toilet, free wifi, it picks up in my road, the staff are excellent.
It costs 2/3 of the cost if a rail ticket, and its a profitable business.
The only downside is that it has to move through the congested streets of london, but door to door its only slightly longer then a rail journey.
Pave over the railways and let private coach companies run services
98elise said:
I've never understood why railways are so expensive.
I commute to london on a coach. The coaches all look new, I have a guaranteed seat, its immaculate, with a working toilet, free wifi, it picks up in my road, the staff are excellent.
It costs 2/3 of the cost if a rail ticket, and its a profitable business.
The only downside is that it has to move through the congested streets of london, but door to door its only slightly longer then a rail journey.
Pave over the railways and let private coach companies run services
wheres that from? does it normally arrive at the same time each day?I commute to london on a coach. The coaches all look new, I have a guaranteed seat, its immaculate, with a working toilet, free wifi, it picks up in my road, the staff are excellent.
It costs 2/3 of the cost if a rail ticket, and its a profitable business.
The only downside is that it has to move through the congested streets of london, but door to door its only slightly longer then a rail journey.
Pave over the railways and let private coach companies run services
98elise said:
I've never understood why railways are so expensive.
I commute to london on a coach. The coaches all look new, I have a guaranteed seat, its immaculate, with a working toilet, free wifi, it picks up in my road, the staff are excellent.
It costs 2/3 of the cost if a rail ticket, and its a profitable business.
The only downside is that it has to move through the congested streets of london, but door to door its only slightly longer then a rail journey.
Pave over the railways and let private coach companies run services
Partly due to the fact that the rail companies employees all belong to fairly militant unions I imagine. I commute to london on a coach. The coaches all look new, I have a guaranteed seat, its immaculate, with a working toilet, free wifi, it picks up in my road, the staff are excellent.
It costs 2/3 of the cost if a rail ticket, and its a profitable business.
The only downside is that it has to move through the congested streets of london, but door to door its only slightly longer then a rail journey.
Pave over the railways and let private coach companies run services
98elise said:
The only downside is that it has to move through the congested streets of london, but door to door its only slightly longer then a rail journey.
That's a huge downside. It took me 20 minutes to get from Raynes Park to Waterloo this morning. That journey by coach or bus would take god knows how long, and they just wouldn't cope with the volumes. Trains are an extremely effective way of transporting masses quickly between urban centres and we all benefit massively from this infrastructure (even if we don't use the train) but unfortunately we don't share the costs equally. Actually, they could divert a few billions from Benefits towards updating the rolling stock and we would all be better for it.Edited by fido on Friday 26th November 09:17
I'm not sure why we should expect rail services to be profitable. They exist to provide a service, not to turn a profit. Privatisation of public transport never made sense to me - do it properly and the non-profitable routes will quickly be dropped, so the rules force the companies to run loss-making routes because they're providing a service for Mrs Miggins to get into town for her cat food purchase. That then means they aren't really privatised, merely made more complicated (and hence costly) for everyone.
ewenm said:
I'm not sure why we should expect rail services to be profitable. They exist to provide a service, not to turn a profit. Privatisation of public transport never made sense to me - do it properly and the non-profitable routes will quickly be dropped, so the rules force the companies to run loss-making routes because they're providing a service for Mrs Miggins to get into town for her cat food purchase. That then means they aren't really privatised, merely made more complicated (and hence costly) for everyone.
I'd agree, for most infrastructure in fact (roads, power, water). Makes more sense for the people of the country to own this stuff rather than multinational companies, in my mind.It's impossible though - if the government runs things, they are s
t, because the government is bad at running things. But anyone else expects a profit, which means either poor service for non-profitable areas, massive prices, or heavy regulation. Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff