British Railway Operations

[daveklepper]

I think we would all appreciate knowing if British crews can work through freights into France . Would not French crews then be able to bring through Chunnel freights to London and maybe even Manchester and Scottland? Can you find out?

[Tulyar15]

QUOTE: Originally posted by Murphy Siding

FM: wouldn't "rejected" short haul opportunities (by a dominant rail carrier) be the "opportunities" that don't make money? If the big boys have decided that it's not worth the effort, why would an upstart want to jump in?

Judging by what's happening in Britain at the moment, EWS's overheads are too high which is why the smaller operators are able to take traffic which EWS dismissed as unprofitable. The Royal Mail contract is a case in point.

To answer your other question about inter-operability between Britain and France: for years before the Chunnel opened we've had through freight trains to the continent by train ferry. Up to 1980 there was also the "Night Ferry" overnight train from London Victoria to Paris Gare Du Nord which was formed of French sleeping cars with British day coaches added/detached at Dover.

I'm not sure what happens about crewing freight trains in France but British Eurostar crews work through to Paris and Brussels; likewise French and Belgian crews. During the winter Euorstars run through to certain French ski resorts and on summer Saturdays there's a return London - Avignon Eurostar trip but I dont know how far British crews work these. I suspect they only go as far as Paris. A few years ago when French crews went on strike the French Railways (SNCF) used Eurostar trains with British and Belgian crews to operate a limited service between Paris, Lille and Calais.

[Murphy Siding]

FM: I see your point. Where do I sign up?[:)]

[Anonymous]

QUOTE: Originally posted by Murphy Siding

FM: wouldn't "rejected" short haul opportunities (by a dominant rail carrier) be the "opportunities" that don't make money? If the big boys have decided that it's not worth the effort, why would an upstart want to jump in?

Murphy,

Isn't the history of business filled with examples of someone who found an opportunity that had been rejected by someone else and, using a little trial and error and innovation, turned it into a profitable venture? Besides, what isn't "profitable" for a big firm can often be profitable for a smaller outfit. Where is it written that ROI's just have to be 15% or more to justify investment? Who's to say that for some people a 5% ROI will be just fine? Some of those smaller outfits may have lower cost structures to start with. An owner-operator can make a profit at ventures that would be unprofitable to a company paying their employees to do the same thing. Granted, we probably wouldn't want these small outfits out on the heavily used mainlines, but they may fill a void on these less used lines (not limited to shortlines).

Finally, how many folks are out there who would jump at the chance to drive their own consists? The call of road is not limited to asphalt. I'll bet there are folks in this forum who would gladly PAY for the opportunity to run their own trains.

[Murphy Siding]

FM: wouldn't "rejected" short haul opportunities (by a dominant rail carrier) be the "opportunities" that don't make money? If the big boys have decided that it's not worth the effort, why would an upstart want to jump in?

[Anonymous]

QUOTE: Originally posted by Tulyar15

QUOTE: Originally posted by futuremodal

One question regarding the makeup of freight. Since the Island is relatively small from a U.S. rail perspective (meaning U.S. railroad executives would say it's impossible for freight trains to make a profit 'cause it's all shorthaul 'cept for the Chunnel bound traffic), how much of the freight is domestic (in which I would include freight from the interior bound for export to a British port) and how much is Continental?

Most of the freight in the UK is domestic. Channel Tunnel freight is well below expectation, partly due to recent problems with asylum seekers trying to hitch a free ride on trains. But the French railways dont seem to have done much to encourage it either. EWS are now trying to get the class 66's approved for use in France so they can work trains there. (They're approved in most European countries where examples can be seen at work but not yet France!). The French seem to be dragging their feet though. Mr. Heller, the current head of EWS has said its a pity the chunnel doesnt go to Belgium! The Belgian Railways (SNCB) are more helpful and class 66's are already approved for operation there.

Coal is still the no 1 freight commodity in Britain, much of it imported, though there are still a few mines in Scotland. Steel traffic is still healthy; despite recent plant closure Corus (formerly British Steel) is still the 5th largest steel maker in the world. Automotive traffic is booming too. When the chunnel first opened Rover and Fiat used the same haulage company to distribute their cars. This company subcontracted long haul moves to BR with the result that the carr flat wagons would run from Britain to Italy with Rovers and come back with Fiats! Much of the traffic passing through the Chunnel is bound for Italy; we do as much trade with them as with France and much more than with Germany.

Thanks for the information. The reason I ask about domestic freight volumes is that it is my belief that under open access "rejected" short haul opportunities (by a dominant rail carrier) would be picked up by a new upstart rail operator, rather than defaulting to highway movement. It's still just a theory of mine, and hard to compare the predictive value of the theory against the current British experience, but still worth the analysis.

[Murphy Siding]

owlroost: Thanks for the input. I find this somewhat perplexing. It sounds like a turf battle in regards to the French. If a British locomotive were to go beyond Calais,I gather it would have to be with a French crew? What would the French Union have to lose from that? If the British locos turn around at Calais and return home, do the French units do the same thing on the British side? or is everything exchanged on the French side? What about cars? Are they free roaming throughout the European system?

Thanks

[owlsroost]

The French public-sector unions are generally very protective of their jobs and benefits, so yes it's basically protectionism. The unions know that once open access operators get established in France it's likely to demonstrate just how inefficient the SNCF freight operation currently is, and will result in a lot of pressure on them to agree to job cuts, longer working hours etc. to try and compete.

We've been here before - the Class 92 electric locos which haul all freight trains through the Channel Tunnel were designed to be capable of running over the general French rail network as well (e.g. to Lille, a major rail centre in northern France). As far as I know, they've never strayed beyond Calais because the French rail unions refused to drive them, claiming they didn't meet the crashworthiness requirements (despite having been specifically designed to meet them) - but I don't think many people believed this was the real reason...

(Incidentally, at 6700hp the Class 92's are the most powerful locos running on the general UK rail system. The Eurotunnel shuttle train locos are considerably more powerful but are restricted to the Eurotunnel system only).

Tony

[Murphy Siding]

Tulyar 15: Any thoughts on why the French would be dragging their feet on the Class 66 issue? Protectionism of some sort? It would seem that France would benefit from the use also.

[owlsroost]

QUOTE: though there are still a few mines in Scotland.

There are also 7 active deep mines in England + some surface extraction (producing about 4.6 million tonnes in the first six months of 2005) - see http://www.rjb.co.uk/

The rail freight situation in France is probably one of the worst examples of traditional state railways in the EU - high costs, obstructive unions, falling traffic due to poor service at high prices, and hence having to be propped up by the French taxpayer. There is an analysis of the situation here - http://www.rfg.org.uk/library/?pid=3158&lsid=3290&edname=17546.htm&ped=17546 (RFG is the rail freight industry pressure group in the UK).

Tony

[Tulyar15]

QUOTE: Originally posted by futuremodal

One question regarding the makeup of freight. Since the Island is relatively small from a U.S. rail perspective (meaning U.S. railroad executives would say it's impossible for freight trains to make a profit 'cause it's all shorthaul 'cept for the Chunnel bound traffic), how much of the freight is domestic (in which I would include freight from the interior bound for export to a British port) and how much is Continental?

Most of the freight in the UK is domestic. Channel Tunnel freight is well below expectation, partly due to recent problems with asylum seekers trying to hitch a free ride on trains. But the French railways dont seem to have done much to encourage it either. EWS are now trying to get the class 66's approved for use in France so they can work trains there. (They're approved in most European countries where examples can be seen at work but not yet France!). The French seem to be dragging their feet though. Mr. Heller, the current head of EWS has said its a pity the chunnel doesnt go to Belgium! The Belgian Railways (SNCB) are more helpful and class 66's are already approved for operation there.

Coal is still the no 1 freight commodity in Britain, much of it imported, though there are still a few mines in Scotland. Steel traffic is still healthy; despite recent plant closure Corus (formerly British Steel) is still the 5th largest steel maker in the world. Automotive traffic is booming too. When the chunnel first opened Rover and Fiat used the same haulage company to distribute their cars. This company subcontracted long haul moves to BR with the result that the carr flat wagons would run from Britain to Italy with Rovers and come back with Fiats! Much of the traffic passing through the Chunnel is bound for Italy; we do as much trade with them as with France and much more than with Germany.

[Murphy Siding]

Thanks Guys. These Brits are always an interesting read!

[Anonymous]

One question regarding the makeup of freight. Since the Island is relatively small from a U.S. rail perspective (meaning U.S. railroad executives would say it's impossible for freight trains to make a profit 'cause it's all shorthaul 'cept for the Chunnel bound traffic), how much of the freight is domestic (in which I would include freight from the interior bound for export to a British port) and how much is Continental?

[owlsroost]

I'd generally agree with Cogload's analysis of the situation.

I should have made it clear that when I was referring to 'no subsidy' TOC's I meant no direct subsidy payments to them. There are undoubtedly general 'system' subsidies and cross-subsidies between routes and operators happening in reality.

This is inevitable given that working out exactly how much each train contributes to the costs of the system is difficult/not worthwhile when in some cases they roam all over the system and share the same tracks with many other TOC's e.g. the freight operators and Virgin Cross-Country. I believe BR generally never bothered to allocate costs down to that level either - they basically allocated route costs to whichever business unit (InterCity, Regional Railways, Network South East, Freight) ran the majority of trains on that route, with adjustments to reflect the fact that heavy freight trains cause more track wear than lightweight DMU passenger trains etc. This tended to result in freight being subsidised by the passenger business, and I think this principle was carried over into privatisation by capping the track access charges for freight (a hidden subsidy) - it also made the ex-BR freight businesses more saleable.

Tony

[Anonymous]

It is a fallacy that the train operators and the freight operators run in the UK without subsidy. They are all subsidised to a degree - as Network Rail is a government company. Apply the duck test. If it looks and quacks - its a duck.

The debate as to how much the government spends and in its comparable form will always rage. In British Rail days the subsidy raged and any investment projects were controlled the Department of Transport - they set the targets such as the hurdle rate and then cut the figures back when they reckoned that things were getting out of control. This led to the "under investment" mantra - whereas commentators like Ford will argue that BR had the cash and spent it - quickly. remember that few Nationalised Railway Companies made money - British Rail did - shed loads of it during the lawson boom of the 1980's. The money which was spent was directed toward to where the priorities where - Intercity had a big chunk; the secondary (regional) railways were re-equipped with lightweight multiple units which in effect enabled many lines to take a maintenance holiday - a policy which was to come back and haunt Railtrack. Freight however was somewhat neglected apart from a few new locomotives. Those wishing to have wagons were told to lease or buy their own with few exceptions (English China Clay being one in my part of the world).

After privitisation and the split up - you factor in various companies trying to make their 15%; an immature market and tight construction industry and private companies finding that BR was not exactly inefficent and bingo costs rise. Also add in that there has never been an asset register; the condition of signalling and rails was carried in peoples heads and not on paper and as a result Railtrack found to its collective horror that actually it was a heavy engineering company and not a go getting property asset manager.

The rolling stock lease is in effect backed by the government - the ROSCOs will aim for the most go-anywhere train in theory so that the residual value will be higher. The lease for the stock will basically be transferred across for one TOC to another. Where there are several Train Operators under the same ownership there will be a certain amount of cascading from one operator to another. There is strong resentment from some quarters that rolling stock which was basically written off by British Rail is now subject to leasing costs. As for Employees all are now subject to TUPE (Transfer, Undertakings and Protection) legislation - European Law now dictates how British Law handles its employees. They are simply moved across on the same conditions and then the new employer must try and negotiate with the Unions as to the changes.

Open Access - the policy must be set - what sort of timetable between A and B do you want. I was astonished to find on a recent trip to Vancouver BC that there is the best part of 20m Can dollars of bi-level stock sitting in the yard and the commuter trip seems to be four one way then four the other - no day trips or back workings. That would not be tolerated here - the stock would be used for unremunerative off peak services so it earned a return and any subsidy paid would reflect that. Or the operator would then ask for a certain amount of protection if asked to operate these services and would be granted it as the public purse is not a black hole - therefore cross subsidization will take place and anybody who wants to run a competing service would be restricted.

If any other UK posters would like to comment I would be grateful.

[jeaton]

MS According to the Phillips item, in 1996, the last year of operation only 25% of the cost was paid by the public, whereas the factor for the actual spending for the last decade and the forecast for the next decade will be 50%. Maybe this comment is a partial answer. The rails are now safer than any time under nationalization.

Jay Eaton

[Murphy Siding]

Is the amount of capital spent by the government since privatization comparible to what it had been spending on subsidizing before? On the whole, is this money better spent now, or before, under the old nationalized system?

[jeaton]

Very interesting and informative thread. GB is often cited as the model for splitting infrastructure and opening access to competing operating companies. However granting exclusive franchises, even for periods much less than the life of the operating equipment, still has to limit competition to a degree.

I noticed the absence of any specific numbers on total government dollars spent since privitization. Don Phillips has a sidebar on the subject in the September Trains. He notes that the government has pumped in $49.3 billion in the ten years since privatization and projections indicate another $73 billion will be needed over the next decade. You might not agree with every conclusion ever made by Phillips, but he gets his facts straight. In this case, he opines that the high popularity of the private passenger operations with a 41% growth since privatization and a 45% growth in freight traffic is pretty good news.

Jay

[Anonymous]

I don't know exactly what happens to employee wages or rollingstock lease prices, fair to say that since the British Railways are Union I bet that the unions have a say in that. The observation that TOCs(Virgin West Coast) are little more then management companies has been made before.

If you are really interested in good analsys of British Rail check out the website of the British Rail Analsys Cristian Wolmar at www.christianwolmar.co.uk.

[Murphy Siding]

Would the new TOC that got the employees and equipment leases be required to honor the same wage scale and lease prices? or are they re-nogotiated at that time? To me, it sounds like the TOC would be not much more than a management team?


Thanks

[Anonymous]

QUOTE: Originally posted by Murphy Siding

Glad to hear that some of the TOC's can operate without subsidy. Again,that seems to mirror our rail system somewhat: long hauls into major markets are more profitable. Back to the TOC's: at the end of a contract, does the TOC then re-nogotiate a contract with NR? or are they then required to bid against other TOC's who might want in on the action? If the contract is not renewed,does the TOC just fold up the tent and go home? Thanks

At the end of the franchise periode the TOCs must rebid for there contract along with any other potential TOCs. As a recent exanple the Thameslike franchise holder lost out in there bid to renew there contract pretty early in the bidding process. When a TOC losses its contract the employent of most of the employes as well as the leases on the rolling stock get transfered to the new TOC. So yes they are required to rebid and if they don't get renewed they do fold up the tent and go home.

[Murphy Siding]

Glad to hear that some of the TOC's can operate without subsidy. Again,that seems to mirror our rail system somewhat: long hauls into major markets are more profitable. Back to the TOC's: at the end of a contract, does the TOC then re-nogotiate a contract with NR? or are they then required to bid against other TOC's who might want in on the action? If the contract is not renewed,does the TOC just fold up the tent and go home? Thanks

[owlsroost]

QUOTE: What incentive is there to invest in any of the TOC's or NR?

This is a big issue for the TOC's with relatively short contracts - in some cases they have negotiated longer franchises in exchange for putting up money for improvements. Chiltern Railways ( http://www.chilternrailways.co.uk ) is a good example - they paid some of the cost of double-tracking part of their route from London Marylebone to Birmingham and for improvements at Marylebone in exchange for a much longer franchise period (so they can get a sensible return on the investment).

Also some TOC's don't receive subsidies (generally the ones running long distance services to/from London) and in the others there is quite often the possibility of more profits by carrying more passengers - which can justify investment if the numbers stack up. Quite often the investment is in conjunction with NR or a rolling stock leasing company, who then charge more to recover the money over time.

Tony

QUOTE: p.s. Which TOC does Thomas the Tank Engine work for?

The one run by the Fat Controller of course [:)]

[Murphy Siding]

The privatization got the industry's debts off the government's books by selling everthing to private concerns that have to depend on government subsidy? What incentive is there to invest in any of the TOC's or NR?

Thanks.

p.s. Which TOC does Thomas the Tank Engine work for?[:)]

[owlsroost]

QUOTE: Didn't that defeat the purpose of seperating things to begin with?

You have to remember that the main purpose of rail privatisation was to get the industry's debts and future borrowings off the government's books. This wasn't how it was sold to the public by the politicians, but that's the reality. Since no one had tried to do this before on this scale (and they wanted to complete the process quickly before the next general election), real competition between operators was limited to make the franchises as attractive as possible to potential bidders.

QUOTE: If EWS wanted to buy the lines to be able to maintain it, and run it more efficiently,wouldn't the government be hard pressed to say no?

The problem with this is that (unless you placed the same legal requirements for open access on EWS) it would create a monopoly for EWS on those lines, and I don't think the politicians would wear that - and certainly the other operators (I assume) would strongly oppose it without their open access rights being protected.

In Railtrack days, EWS did propose taking over the maintenance of some freight-only lines but it never got anywhere - and I don't remember any recent proposals about this.

Tony

(Note that my comments/opinions about all this stuff just come from being an observer of the UK rail scene for over 30 years, a taxpayer, and ex-Railtrack shareholder - I've never worked in the industry so I don't have any inside knowledge [:)] )

[Anonymous]

Notwork Fail is funded through 5 yearly control periods. It used to be the regulator which determined the cash depending on a credible business plan from the company and then the treasury used to pay up. It had no option.

Now it is the dft/ government who are supposed to state what they want and what they will pay for and basically NR will design its business plan around that.

The train operators are monopolists in areas such as on secondary main lines and the branches. On the main lines there are a variety of train operating companies.

[Murphy Siding]

Tony: Is there typically only one TOC per section of track,which is owned and maintained by NR? Tulyar 15 notes that the TOC's were given guarantees to limit compettion. Didn't that defeat the purpose of seperating things to begin with? If EWS wanted to buy the lines to be able to maintain it, and run it more efficiently,wouldn't the government be hard pressed to say no?

[owlsroost]

It's complicated (and it's changing slowly) - the rail regulator effectively sets the baseline of how much money Network Rail can have to maintain the existing network. NR then gets the actual money from the train operators via Track Access charges, some of which comes from the taxpayer via subsidies to the operators.

If an operator wants NR to upgrade something (e.g. higher speeds, track doubling etc) it can negotiate with NR to pay back the cost of this via increased Track Access charges - or it could just pay directly for it to be done (if it has a long enough franchise to make this viable).

EWS (the largest freight operator) has a long term Track Access agreement with NR covering the whole system which (as I understand it) is a large fixed cost per year plus incremental charges per train.

Tony

[Murphy Siding]

Tony : How does Network Rail recover the cost of rail line improvements? Are they able to raise rates,as needed to cover expenses,or is the rate they charge regulated by a government authority? Or, maybe the rates are negotiated on long term contracts?

Thanks

[owlsroost]

QUOTE: Cost reductions are possible by increased productivity, faster turn around of trains for better use of both equipment and personel, but how realistic is this? US railroads have reduced costs mostly by turning away unprofitable business, through abandonment of branch and secondary lines and simply raising rates, but this is a freight railroad approach and not applicable to the UK.
Actually, Beecham and all, it was done already about as far as possible. Reducing manning on trains is one way, but will the Unions permit this? How much of the subsidy for British railways is really a form of welfare? In some cases, costs can be reduced by turning lines over to local authorities and running them as light rail, and some of this has been done already. But isn't this just a drop in the bucket? My prediction: Oil prices in the UK are going to escalate greatly in the future, and the UK has been extremely slow in adopting energy saving highway transportation (Hybrid technology, NOT the rediculous fuel cell Hydrogen scam), so the costs of driving will go up, and the railways will increase their ticket prices and/or the popularity of the subsidization will increase.

It's not the direct costs of running trains that's the problem - it's mostly the increased costs of maintaining/renewing/upgrading the infrastructure compared to British Rail days.

As a few examples, some of this is down to increased health & safety related costs - e.g. it apparently takes longer now to set up/hand back a track posession so you get less work done during an overnight repair shift, some of it is because more work is done by private contractors (who have to make a profit), some of it is because perfectly good equipment that was used in BR days was deemed old-fashioned etc in the Brave New World of the privatised railway and so was replaced by new kit (supposedly cheaper and better because it came from outside the UK) that has proved more expensive and less reliable than the old stuff in some cases....

These issues are slowly being sorted out (Network Rail has now bought all routine maintenance back in-house, for example), and some of the money is going on repairing/upgrading stuff that BR should have done years ago but never had the money (sound familar in the context of the North East Corridor ?)

And yes, you're right, chopping off branch lines doesn't make that much difference to the overall system costs because most of the money is spent on the busy parts of the network - we found this out in the Dr. Beeching era

By the way, we can buy hybrid cars in the UK, but they are more expensive (and there are no government subsidies to encourage their use), and our normal cars are pretty economical anyway - they have to be, fuel costs 4 - 5 times the price it is in the US (which also why diesel powered cars are popular in Europe - they have better fuel economy, particularly in urban conditions).

You might find Roger Ford's 'Informed Sources' magazine column archive - http://www.alycidon.com/ALYCIDON%20RAIL/alycidon%20RAIL%20home.htm - interesting (but read the primer first - http://www.alycidon.com/ALYCIDON%20RAIL/Informed%20Sources%20Primer.htm - particularly the 'Boiling Frogs' section [:)] )

Tony