Trouble in open access paradise?

[Anonymous]

Taking a cue from Simon Reed's contribution, my take on the privatisation/open access situation in the UK is:-

1. Open Access freight is probably the best thing to have happened to rail freight since BR was formed in 1948 - even allowing for economic growth and changing traffic patterns (e.g. power station coal traffic switching to imported coal with longer hauls) it's reversed the relentless decline in rail freight and made it a truly competitive (between operators) business for the first time since 1825.

2. To make open access work, I think you need to separate the infrastructure from the train operators and provide some sort of independant regulator to sort out disputes and keep the playing field fair and level - they got that bit basically right. One thing that seems to have 'matured' since privatisation is the attitudes of operators and Railtrack/Network Rail towards each other when problems happen on a day-to-day basis - they've realised (re-discovered ?) that the railway is a complex system and keeping it running smoothly needs co-operation, not laywers arguing with each other over the fine print in the contracts.

3. The big mistake was setting up Railtrack as a 'virtual' company as far as maintenance was concerned (it was all contracted out), and splintering the ex-BR maintenance function into so many small pieces. All this really achieved was increased costs and a crucial core activity which was far more difficult to control and monitor - and it's taken even more effort/money to put the  maintenance function back together under Network Rail.

4. I think open access passenger operations could work here on a larger scale, now that the industry has recovered from the initial 'nuclear explosion' and has (in some cases) re-learnt how to run a railway. The big problem I see is how do you handle socially necessary subsidised services, without the subsidies directly or indirectly contributing to the profits of an open-access operator on the route - the franchise model seems to be the best compromise anyone has come up with so far. One thing to keep in mind is that there is actual competition between operators on some routes e.g. GNER, Virgin and TPE between York and Newcastle (while operators are required to sell and accept operator-agnostic tickets, they are free to sell cheaper operator-specific tickets if they want to, and run more trains than their basic franchise commitment mandates). I think the recent round of franchising changes have been a retrograde step in some cases because they've reduced the competion possibilities e.g. all of the services from Paddington (First Great Western) and Liverpool Street ('one' Railway) are now in the hands of a single operator where before they had different commuter and long-distance operators.

5. I suspect one reason why the politicians didn't want to risk more open access passenger operations at the start is because of earlier experiences when bus operations in most parts of the UK were privatised and de-regulated. It basically went from regulated monopolies through a period of instability (in some cases schedules and routes changing every week, lots of buses on prime routes and very few on others etc - not very useful if that was the only way you had of getting to work etc), then slowly the bigger operators either bought out or forced off the road the smaller ones (by undercutting the fares and/or swamping the route with buses) until we ended up with a different set of regional monopolists - e.g. Stagecoach, First Group and Arriva (sometimes known collectively as the 'bus bandits'). If the bus services in my area are typical, overall they have improved compared to pre-regulation, but things took a long time to settle down and in some cases there is a clear separation between commercial services (basically morning to early evening, mon-sat) and subsidised (run under contract from the local council) services at other times e.g. a different operator.

So, overall - I think it's been a successful experiment (but expensive), and I don't think I'd want to go back to BR - that had it's problems too.

Comments ?

Tony

An excellent synopsis.  But I still don't know your take on the whole "was it the privatization, or was it the quasi-open access" argument as it relates to the problems experienced.  Surely they overdid it with the break up into 100+ entities - do we put that one in the "privatization" catagory or the "open access" category?

[Hugh Jampton]

A quick nose around the rest of Europe and elsewhere shows privatisation as the root of all evil.

[beaulieu]

An excellent synopsis.  But I still don't know your take on the whole "was it the privatization, or was it the quasi-open access" argument as it relates to the problems experienced.  Surely they overdid it with the break up into 100+ entities - do we put that one in the "privatization" catagory or the "open access" category?

The extreme breakup was done to extract the maximum amount of money out of the sale. Most people will agree with that. Some people add that another reason was to make it nearly impossible to undo the privatization, I think that part would be hard to prove as they have moved back closer to BR with Network Rail. I don't think anyone on either side in British politics wants to take back the freight business. Another unknown is whether or not the government that privatized BR really knew what it would cost them in the long run, or if their attitude was we need to do this to get reelected and then we'll fix the problems later. Call those problems badly handled Privatization problems rather than an Open Access problem. No Country in Europe right now has more than a token amount of Open Access for passengers. Open Access is really about freight.

If Open Access were to come to passenger service you would need a strong referee over network capacity. Unlike with a bus on a motorway a small DMU or EMU takes up just as much track capacity as a Eurostar or HST, of course you don't run a stopping service with a Eurostar either. What has to be balanced is the needs of the larger cities - longer distance services with the needs of smaller towns and their people, because there will never be enough capacity for both unless someone enforces a rationing system as opposed to a system where "he who has the most money rules". There is an ongoing discussion right now over stopping services on the WCML eating up pathing for both freight and Intercity passenger. Another case is with the Crossrail project, the freight hauliers are very concerned that they will be forced off the inner portion of the Great Western Main Line, between all the trains of First Great Western, Great Western Connect, Heathrow Express, and the new Crossrail services (8 trains per hour?) on a 4 track mainline.

[beaulieu]

A quick nose around the rest of Europe and elsewhere shows privatisation as the root of all evil.

Water, Gas, Electricity etc. yes. But Estonia, is the only rail privatization otherwise. Well you could consider the Dutch and Danish freight services privatized.

[Hugh Jampton]

A quick nose around the rest of Europe and elsewhere shows privatisation as the root of all evil.

Water, Gas, Electricity etc. yes. But Estonia, is the only rail privatization otherwise. Well you could consider the Dutch and Danish freight services privatized.

Yeah, but I bet they didn't fragment it into half a million different companies though.

[Simon Reed]

I've not been able to reply before now but Owlsroost has done it very eloquently for me - thanks.

Beaulieu - your point about WCML stopping services illustrates precisely what is good, and bad, about open access passenger service.

A passenger travelling between London Euston and Birmingham (Britain's second biggest city) have the option of travelling with Virgin or Silverlink.

Virgin provide an express service with 140MPH capacity tilting trains. Silverlink provide far less opulent accomodation and probably take nearly twice as long.

I could'nt immediately give you the respective fares but the Virgin train is going to be by far the most expensive option. If, however, you are of restricted financial means you can still make the journey on the Silverlink train.

I fully accept that this is a nod towards the class differentials imposed on the very earliest rail travellers but it provides a semblance of a different type of Open Access - ie the provision of options for the passenger.

The bad part of this is that the authorities have a tendency to be swayed by the financial, rather than social, value of the franchise. The SRA seemed to be a subsiduary of Virgin on a number of occasions, and the regulatory authority of the DfT is so weak that it's taken Civil Law to stop GNER bullying Grand Central.        

[owlsroost]

Actually, the London - Birmingham route(s) are a good example of both competing operators on one route and competition between routes.

If we restrict the comparison to standard class 'walk on' fares (no advance booking needed) - the tickets most people buy - then :

Chiltern Railways (Marylebone - Moor Street route, 140 minute journey time) offers 15, 26 and 65 GBP returns.

Silverlink + Central Trains (Euston - New Street, 135 minute journey time with a change at Northampton) offers 21, 23 or 42 GBP returns.

Virgin WC (Euston - New Street, 90 minute journey time) offers 36 or 108 GBP returns (also valid on Chiltern and Silverlink). All the cheaper VWC tickets are advance booking only, from 20 GBP return upwards.

The cheaper tickets of course have more restrictions on which trains they can be used on, and the 36 and 108 GBP returns are any operator/any route tickets - so you could add Paddington - New Street (FGW + Virgin CC, 135 minutes, change at Reading) to the list too !

All of the operators above are franchisees, not open access.

Tony

[owlsroost]

The bad part of this is that the authorities have a tendency to be swayed by the financial, rather than social, value of the franchise. The SRA seemed to be a subsiduary of Virgin on a number of occasions, and the regulatory authority of the DfT is so weak that it's taken Civil Law to stop GNER bullying Grand Central.        

There's some interesting stuff regarding the outcome of the application for a Judicial Review initated by GNER concerning open-access passenger operators on the ECML here - http://home.ezezine.com/759/759-2006.08.21.00.01.archive.html

If you follow the link to official judgement - http://dspace.dial.pipex.com/town/square/ca14/ALYCIDON%20RAIL/PDF%20files/Judgment___approved___27_July_2006.pdf - some of the comments are quite entertaining - particularly paragraph 89 on page 26 (basically, if the track access charging regime is so favourable towards OA passenger operators, why aren't there more of them ?). The answer of course is that it's financially riskier being an OA operator compared to a franchisee.

There's a bit more background to the GNER situation here - http://www.alycidon.com/ALYCIDON%20RAIL/INFORMED%20SOURCES%20ARCHIVE/INF%20SRCS%202006/Informed%20Sources%2005%202006.htm

Tony