Irish Times - State under pressure to put rail services up for tender

[Noel]

Interesting. Not quite the same as introducing competition between different operators. A bit late in the day anyway to help save intercity rail from competition from our own new motorways.

 

http://www.irishtimes.com/business/transport-and-tourism/state-under-pressure-to-put-rail-services-up-for-tender-1.2301270

[jhb171achill]

Cue the taxpayer forking out to (a) run the service, through the inevitably necessary subsidies to private operators, and (b) line the pockets of obscenely overpaid company directors, regulatory bodies to watch over the private operators, and shareholders.

 

Far fetched? Look across the water. The former BR costs WAAY more to run now, even in comparative terms, and is arguably less efficient.

 

Privatisation of an industry which cannot in reality cover its own costs almost by definition - is mad. This is not "free market economics" - this is utter madness, born of idealistic, but totally unrealistic, political thought; like comparative examples elsewhere it will cost the taxpayer dearly.

[DERAILED]

Could things be any worse than they currently are? Despite all the shiny new railcars outside the Greater Dublin area railways are withering away under CIE control. Another few years will see at least the closure of Limerick/Ballybrophy plus Limerck Jn./Waterford and possibly more. The SLNCR and CDRJC ran far leaner, tighter ships than CIE has ever done and could be a model for how different routes could be farmed out. Of course it will not happen but something needs to be done before the railway becomes nothing more than a memory.

[Flying Scotsman 4472]

Europe always gets it own way. It will be interesting to see how this plays out.

[jhb171achill]

The SLNCR did indeed run an extremely tight ship, but it's gone; reason - it was an example of an industry which, given conditions in Ireland (low population density outside Dublin, and very little bulk goods e.g. coal), cannot stand on its own commercial feet without state funding.

 

In other words, it was private as in privatised as such, a commercial business. The LLSR was the same and so was the CDRJC.

 

If we look at the receipts of all Irish railway lines, or even just stick to the amount of commercially viable traffic likely to offer, even theoretically, we can see that had the state never become involved through the admittedly inefficient and anti-rail UTA and to a lesser extent CIE, there wouldn't be a yard of railway open for fifty years or more.

 

I agree with Derailed that CIE has hardly had a good track record, though lack of government funding to CIE is the major problem.

 

If some portion of whatever state money there is, becomes diverted towards company directors and their inevitably obscenely high salaries, and related regulatory quangos, then whatever chance the Nenagh and Waterford-Limerick lines have had will evaporate overnight.

Edited July 30, 2015 by jhb171achill

[jhb171achill]

If the Government is worried - and rightly so - surely they can insist that the existing subsidy they give to IE will not be increased by one red cent. That way, no commercial operator - presumably - would want to touch it!

[GSR 800]

The SLNCR did indeed run an extremely tight ship, but it's gone; reason - it was an example of an industry which, given conditions in Ireland (low population density outside Dublin, and very little bulk goods e.g. coal), cannot stand on its own commercial feet without state funding.

 

In other words, it was private as in privatised as such, a commercial business. The LLSR was the same and so was the CDRJC.

 

If we look at the receipts of all Irish railway lines, or even just stick to the amount of commercially viable traffic likely to offer, even theoretically, we can see that had the state never become involved through the admittedly inefficient and anti-rail UTA and to a lesser extent CIE, there wouldn't be a yard of railway open for fifty years or more.

 

I agree with Derailed that CIE has hardly had a good track record, though lack of government funding to CIE is the major problem.

 

If some portion of whatever state money there is, becomes diverted towards company directors and their inevitably obscenely high salaries, and related regulatory quangos, then whatever chance the Nenagh and Waterford-Limerick lines have had will evaporate overnight.

It seems very strange that there is really only 2-3 real "hubs" of business: Dublin,Belfast and Cork. This is the reason that IE is under such pressure, there is very little profit except for Dublin and the eastern region of Ireland.

[Noel]

There was significant investment over the past decade in two "competing transport" systems: motorways and rail. Motorways made Ireland a lot smaller place to get around. One can drive to Cork faster than the Train. The rest is logic. The future for rail is commuter, but intercity seems doomed.

[Mayner]

Europe always gets it own way. It will be interesting to see how this plays out.

 

The Irish Government cannot have it both ways in accepting over £500m in EU Structural Funding to upgrade the railways as part of the deal for signing the Maastricht Treaty in 1992 and then looking for a get out clause on implementing an EU Directive that potentially may open IE up to competition.

 

I suppose IE could do a DB and bid to operate rail services in other EU countries.

[jhb171achill]

Black'n'tan TGV's? Harz mountain steam locos with flying snails.....!

 

Seriously, all the above points are perfectly valid.

 

Ireland has six million people. One third of them live in the greater Belfast, Dublin and Cork areas. Derry, Galway, Limerick and Waterford are the next biggest cities; but all four have populations between 85000 and 100000. If we count those plus their immediate hinterlands, it shows us that just seven centres on this island account for 40% of the island population.

 

By international standards, only Dublin is a significantly sized city. Many countries - whether with privately or publicly run railways, would have abandoned the less used ones years ago. Just saying!

 

It's no coincidence that the Cork-Dublin-Belfast lines carry the lion's share of traffic.

 

The survival of so many other lines has, unfortunately, more to do with the poor road system in the recent past, than any notion that there's loads of commercially viable traffic out there if only the railway would look. There's loads of traffic all right, but it's not COMMERCIALLY viable.

 

Hence the dilemma. Now - our government has a choice (and such privatisation directives will affect NIR too; it's just as much an EU railway as IE is) - allow all comers in and pay them whatever their bloated privatised bosses want, or say "sorry, lads; what IE got is all you're getting".

 

Let's hope it's the latter.

 

Another thing: in a country this size, there are no duplicated routes and no room for competition. As our transatlantic friends might say; "Go figure"!

[jhb171achill]

I could add a few other things which need to be borne in mind. Ireland doesn't have large tonnages of anything, let alone over long distances. We don't have long distances full stop. No coal, no huge opencast mines. A dozen wagons out of Tara is irrelevant commercially.

 

I lament the onset of all these railcars (as I strongly suspect Derailed probably does too!) but if we're to have any railways at all, they must be run as cheaply as possible. And that leaves no room at all for BR style additional layers of shareholders, regulatory bodies, and friends of Fianna Fáil and Fine Gael being paid €678,000 a year to "oversee" it all, as a shiny private company with (here's another) a colossal campaign of advertising, paid for indirectly by the taxpayer.

 

So there's €3m budget up for grabs.

 

Option 1: spend it on track and station upgrades

Option 2: spend €1.1m on consultants fees, dividends, directors salaries and bonuses - we mustn't forget the bonuses.... and €1.9m on track and station upgrades.

 

Make no mistake about this, folks. Look at Irish Water. We all need to be prepared to campaign loudly and long.

 

Mayner makes the point that we can't have it both ways. Absolutely correct. However, special examples can exist Europe-wide, and this may well be a very good example.

[GSR 800]

In my opinion we would have to look at a place with roughly the same population in the northern hemisphere to sort this out, an island would be ideal. But that's the problem there really isn't anything like that, Ireland is unique. The only way to save our railways is to have more towns with larger populations. This could happen in the next 20,30 years,but it might already be to late..

[GSR 800]

Plus there is relatively no freight due to the amount of imports

[jhb171achill]

Well, the amount of imports is due to the lack of anything here to create freight....!

 

But, as far as the railway is concerned, it's purely academic. It's simple; railways in Ireland will cost money, and would have done even if the excellent motorway network wasn't ever built. So - we pay, we get railways. We don't - or - we divert the subsidy to private companies and their bonuses and salaries - and THEN the railways will wither and die.

[minister_for_hardship]

The SLNCR did indeed run an extremely tight ship, but it's gone; reason - it was an example of an industry which, given conditions in Ireland (low population density outside Dublin, and very little bulk goods e.g. coal), cannot stand on its own commercial feet without state funding.

 

The closure of the GNR route effectively pulled the rug out from under the SL&NC, plus its main stock in trade, cattle, were quite easily transferred to road.

[StevieB]

This is just another example of meddling by Brussels that is driving the campaign in the UK to leave the EU.

 

Stephen

[jhb171achill]

Meddling, as such, is OK in theory when the indigenous system is wrong - though who's the judge and jury? For example, the Greek taxation and pension system needs to be meddled with big time, if there's to be the remotest chance of them staying in the euro, or even remotely solvent.

 

Irrespective of that, in this (Irish railway) case the indigenous system is right, and privatisation is wrong full stop. It is expensive and inefficient, and will represent woefully bad value for the taxpayer if it is foisted upon us.

[Broithe]

This is just another example of meddling by Brussels that is driving the campaign in the UK to leave the EU.

 

Stephen

 

The privatisation of British Rail had little input from the EU, as I remember it - it was very much a home-grown policy.

[Mayner]

The privatisation of British Rail had little input from the EU, as I remember it - it was very much a home-grown policy.

 

The UK rail privatisation was more tied up with neo-Liberal theory that idea that the private sector would make a better job than public sector at anything from sweeping the streets to running hospitals and prisons.

 

Much the same thing happened in Australasia and South America with state owned railways either privatised completely or loss making passenger services opened up to competitive tender.

 

Personally I don't have an issue with the Department of Transport opening up passenger rail services up to competitive tender, in a similar manner to the LUAS and intercity and regional rail services in many countries. http://www.transdevna.com/Rail.aspx

 

Commuter, regional and Intercity rail services are likely to require some form of subsidy regardless of Irelands population density or size of regional centres.

 

Comparing Irish services levels with parts of the UK and Europe with similar population density would assist in establishing a benchmark. Rail services in parts of Scotland, Wales and East Anglia come to mind.

 

 

 

L

[jhb171achill]

In reality, private enterprise does a better job at some things, while the state is better at others. Disciples of Marx and of Thatcher both fail to see this reality.

[Irishrailwayman]

In reality, private enterprise does a better job at some things, while the state is better at others. Disciples of Marx and of Thatcher both fail to see this reality.

 

Well said. The State should always look out for the common good performing some services itself while overseeing that the private does least harm (which it signally failed to do with the banks). Business will always look to profit which may disadvantage people e.g. workers...

[Garfield]

Folks, this topic is already 'borderline' as political discussion is prohibited under the forum's rules and guidelines but I'm willing to give some leeway as long as talk is confined to rail-related issues, and specifically ones relating to this particular topic. (see rules here: http://irishrailwaymodeller.com/showthread.php/79-Website-Guidelines-Rules). However, any more references to other policies, ideologies, bankers, etc. etc. will earn you a slap on the wrist.

Edited August 3, 2015 by Garfield

[Broithe]

Of course, the nationalised British Railways even had its own specific banker at one time...

 

[Noel]

More here today from IT: "Irish Rail faces bankruptcy if it loses tender, Government warns"

 

http://www.irishtimes.com/business/transport-and-tourism/irish-rail-faces-bankruptcy-if-it-loses-tender-government-warns-1.2305992

 

Worth discussing the issues, but agree with mods about avoiding a drift into political grumbles. Its not political but rather business and social justice issues when considering the conflict between a private service and a state sponsored service that subsidises non-profitable routes from the surplus generated from high traffic routes. Low cost airlines proved that you can make more profit (public or private operators) if you reduce fares and fill seats. IMHO what rail needs is better point to point integrated ticketing including good bus and commuter rail connectivity. Just not sure if Ireland Inc has the population size to sustain intercity rail transport given the motor way and express bus routes now in place.

[Old Blarney]

Sacred Cows!

 

Perhaps it is time to re-evaluate Irish Rail. There are questions that should be asked of this organisation and its masters CIE. This holding company controls - the Railway Company, the National Bus Company and Dublin Bus. Each of these companies has their vested interests; however their master, CIE is wholly owned by "The Government of the Day", There lies the problem in one word, VOTES.

 

Business need to be run on the basis of "The solution to this problem is", not the all to often statement " We have a problem."

 

Solutions to problems seldom come from those who hold a vested interest in retaining the "The Status Quo", the existing state of affairs!

 

If memory serves me correctly, some years ago there was a company who successfully competed with CIE/Irish Rail. This business chartered trains from CIE. They provided a regular service at week ends to transport passengers to and from various locations that included Limerick and Galway? They were extremely successful but, I believe there initiative was thwarted by those, who wished to see the removal of any competition to the State Company.

 

Unrestricted thinking and an attitude of "Can Do" will often provide the solution to that which others see as a "problems." For too long the transport sector in Ireland has been safeguarded from its own follies. Too many excuses on why things cannot be achieved. Freight being the classic example, and yet, the railway company do run a successful short distance freight service from Navan to Dublin Port.

 

Look for the solution to the Customers Requirements. Provide the service and you have a viable business.

 

Must, Needs and Wants are three words that spring to mind. Find these for your customer and they will come with you.

 

Perhaps the Railway Company and the Government need to ask themselves a series of questions?

 

Who are we serving?

Why are we doing it this way?

What would happen if we sought to change?

What changes are possible?

Where are the business opportunities?

When can we start to change the way we do business?

How can we make these changes?

When can we start to re-evaluate our business?

When can we start to implement these changes?

 

All parties who work for the railway need to consult each other. For too long there has been an attitude of Them v Us. No, it should be an attitude of "We"

We will work together to provide a service that is Second to None. This should be to attitude of each employee.

 

Long may the railways of Ireland survive, but lessons are there to be learnt from.

 

Remember this. Failure rewards no one

[Junctionmad]

Simplest answer would be to shut intercity rail. No EU meddling then.

 

No one would notice the loss anyway.

 

The fact is privatised or not the irish heavy interurban rail network is a dinosaur, uncompetitive in travel time , poor services, constant " efficiency " cut backs. It exists because the political will doesn't exist to close it and take on the unions.

 

The motorway networks has rendered the whole interurban rail network utterly redundant. Why would I take two hours to travel from dunlOghaire to gorey when I can drive it in 50 mins ( and that's door to door timing )

Edited August 6, 2015 by Junctionmad

[Junctionmad]

Old Barney , what company competed for rail services with cie. ??????

[rebelred]

Is this a modelling forum or a discussion forum? Some of us work in the railways & get enough of this on numerous social, print & broadcasting media outlets as well as from the Public. I'll go to one of these places if I want to know 'what's wrong with' the Railway. MOVE ON!!!!

[Garfield]

Is this a modelling forum or a discussion forum? Some of us work in the railways & get enough of this on numerous social, print & broadcasting media outlets as well as from the Public. I'll go to one of these places if I want to know 'what's wrong with' the Railway. MOVE ON!!!!

 

The conversation is relevant to this section of the forum ('What's Happening on the Network'). As per the rules of the site, if you have a problem with anything being discussed please contact the moderators about it instead of tackling the matter yourself.

 

[13] If you note an issue that contravenes this policy document, please use the 'report post' facility located towards the bottom left of each post. This will bring the issue to the attention of the moderators, who will review it and take action if necessary. Please avoid posting on the topic in an attempt to tackle the issue yourself. 'Back-seat' moderating is unacceptable.

 

http://irishrailwaymodeller.com/showthread.php/79-Website-Guidelines-Rules

[StevieB]

The trouble with a privatisation like this is that you replace a state monopoly with a private one, albeit regulated. In the UK open access operators are not allowed to compete directly with franchise operators. The only real beneficiary is the state who are paid a fee by the franchise operator. I've always likened it to television companies bidding to cover a particular sports event. Days were when both BBC and ITV showed the FA cup final live - what a long time ago that was - then there was a real competition between the providers of the service. Now the only real beneficiary is the sports event. Hope this post isn't too political.

 

Stephen

[Junctionmad]

The trouble with a privatisation like this is that you replace a state monopoly with a private one, albeit regulated. In the UK open access operators are not allowed to compete directly with franchise operators. The only real beneficiary is the state who are paid a fee by the franchise operator. I've always likened it to television companies bidding to cover a particular sports event. Days were when both BBC and ITV showed the FA cup final live - what a long time ago that was - then there was a real competition between the providers of the service. Now the only real beneficiary is the sports event. Hope this post isn't too political.

 

Stephen

 

There are elements of BR privatisation that clearly worked. Freight for example. There are examples that didn't work, certain passenger services for example.

 

In general I think it could be tried in Ireland in that the track remains in cie and the services are franchised out. The pitiful remaining freight services are essentially that model anyway

 

In my view allowing IR to achieve operational savings by deconstructing rail infrastructure needs to be halted , separating running services from operating companies could help in that

[StevieB]

The models for privatising passenger and freight are radically different, and both are a success in terms of traffic carried but that is only one way of looking at the matter.

 

Stephen

[snapper]

 

In my view allowing IR to achieve operational savings by deconstructing rail infrastructure needs to be halted , separating running services from operating companies could help in that

 

That has already been done, as part of a previous EU railway package Irish Rail was split in two, The railway undertaking (RU) and The railway infrastructure manager (IM).

[Mayner]

The main risk with privatising uneconomic road or rail passenger services is poorer service levels than under state control or threats to shut down operations unless the government increases the level of subsidy. This tends to happen when an operator puts in a low bid to take on the contract for a set level of state subsidy and revenue growth does not reach expectations or simply signed the contract intending to farm the subsidy by providing a minimal level of service.

 

To quote a World Bank Paper on Australian & New Zealand Railway Privatisation

 

 

ƒ Passenger rail concessioning is more complex than freight rail privatization because there are multiple aspects to address (for example, subsidy levels, performance, risk allocation, end-of period issues) and because governments typically remain closely interested in day to day operational effectiveness.

 

ƒ There should be more emphasis on the operational and financial robustness of bids and less on the best financial outcome :

RESULTS OF RAILWAY PRIVATIZATION IN AUSTRALIA AND NEW ZEALAND 53

- Governments cannot contract out of its obligation to ensure continuation of urban rail passenger services. If a private operator fails, the government is politically or legally obliged to intervene. Having the operator on the hoop

If the operators get into ‘survival’ mode, or are distracted by continuing disputes, management effort and focus is taken away from improving service performance towards managing for survival – which often will mean managing the funder of last resort – i.e., government;

ƒ If the private sector is to deliver efficiencies, it must be given the capacity to effect reforms.

Edited August 7, 2015 by Mayner

[Broithe]

ƒ Passenger rail concessioning is more complex than freight rail privatization because there are multiple aspects to address (for example, subsidy levels, performance, risk allocation, end-of period issues) and because governments typically remain closely interested in day to day operational effectiveness.

 

The history of the East Coast privatisations in the UK might give people some pause for thought.

 

http://www.independent.co.uk/travel/virgin-takes-over-the-east-coast-main-line-10078107.html