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

[Mayner]

What happened in Melbourne and Victoria in a nutshell

 

 

In 1999 three concessions were awarded to private operators, two of 15 years for the urban area and one of 10 years for the country trains. One of the urban concessions was awarded to a French group trading as Connex, and the other two were awarded to National Express (UK), each on the basis of a range of management criteria and of minimum subsidy requirement.

 

The operators improved service quality, added some additional off-peak services, and introduced some new rolling stock. However soon they were bogged down in disputes including revenue allocation, and they failed to negotiate major productivity improvements with staff. Patronage growth, a healthy 3 percent per annum, was much less than the over-optimistic forecasts. Within two years the companies were in financial distress and at the end of 2002 National Express exited, taking a large financial write-off. A new (2004) contract, under which Connex has a concession over the whole system for 4-6 years, draws on the previous lessons and appears to be more successful. The country train concession also awarded to National Express was not successful and was handed back to the Government.

[Junctionmad]

The financial evidence suggests that railways are an economic mess , whether in private or public hands. With that in mind, their continued existence owes more to political viewpoints then rational thinking. If one finds the level of subsidy acceptable, arguably it matters not therefor which way you do it.

[jhb171achill]

Which is precisely why privatisation in any shape or form is absolute inane madness; no matter what way it's configured, you're adding a senior management wage bill and shareholder dividends to the overall railway bill for cost of operating.

 

Blinkered stupidity; while political thoughts are not appropriate here, politics will play a role in whatever thinking forms the future of our railways.

 

As junctionmad says, railways are simply not commercially viable in this country, certainly outside Luas-land.

[Junctionmad]

Which is precisely why privatisation in any shape or form is absolute inane madness; no matter what way it's configured, you're adding a senior management wage bill and shareholder dividends to the overall railway bill for cost of operating.

 

Blinkered stupidity; while political thoughts are not appropriate here, politics will play a role in whatever thinking forms the future of our railways.

 

As junctionmad says, railways are simply not commercially viable in this country, certainly outside Luas-land.

 

I don't think you can make a blanket statement. There are many elements of BR privatisation that have worked well. Incentive in a private company is rewarded and tends not to be in a state one. BR removed itself from many freight activities , yet privatised managers went right back out bad recaptured many of these freight flows.

 

I think a ppp style system could extract better operations from the existing asset base.

[jhb171achill]

I wouldn't mean it as a blanket statement as such, junctionmad. BR (or whatever it may BR collectively be referred to now) is a sum of many very diverse parts. Many of these parts simply don't exist in Ireland, didn't, can't and won't, for example very long distances, heavy freight traffic out of mines like bulk coal, and so on.

 

Thus, of necessity Ireland's railways have a smaller area, smaller market and smaller number of potential niche markets to follow. Of those that do exist, and in the circumstances likely to prevail, actual subsidy-free commercial viability is unlikely to be possible in any sense.

 

Again, if we subsidise a private operator, we're subsidising the operation of the railway plus fat cats and shareholders.

 

One thing is very true though - your comment about incentivisation. Remedies for this type of thing come very slow in Ireland, especially in nationalised entities (the ESB and HSE are WAY worse than the railway) - but can be found without actual privatisation.

[dave182]

Reading all of the above, I think that the only viable solution is for a country to own and maintain the network, and provide this only if it is deemed of national importance. This will always be at a loss to the taxpayer, but view it as an asset for the benefit of the country. Imagine if the government decided to privatise all of Irelands streets and roads?! In a purely commercial sense, of course many of them are uneconomical and costly to maintain, but of course the road network is a vital part of our economy, and an important 'asset' of the State.

 

The challenge then is to try and develop business opportunities and ultimately revenue from these State assets.

[Mayner]

Reading all of the above, I think that the only viable solution is for a country to own and maintain the network, and provide this only if it is deemed of national importance. This will always be at a loss to the taxpayer, but view it as an asset for the benefit of the country. Imagine if the government decided to privatise all of Irelands streets and roads?! In a purely commercial sense, of course many of them are uneconomical and costly to maintain, but of course the road network is a vital part of our economy, and an important 'asset' of the State.

 

The challenge then is to try and develop business opportunities and ultimately revenue from these State assets.

 

Proposals for privatising the road network have been kicked around from time to time in New Zealand http://transportblog.co.nz/2014/03/09/privatising-roads/ but usually dismissed as to extreme even by centre right political parties.

 

In other words privatising the roads would be political suicide, while the majority of voters would not be too worried about privatising justice, health, welfare and education.

 

Personally I would agree that the rail infrastructure and passenger stock would remain in state ownership, passenger and freight operation opened up to competitive bidding. Access to the network should be charged out on a similar basis to the roads and there may be justification for subsidising certain passenger services on the basis of reduced congestion, environmental or road maintenance costs.

 

An incumbent monopoly operator whether it is the state or private tends to take a defensive approach towards running a business and abusing its monopoly position. Opening IEs passenger services to competitive tender based on service level for a given level of public subsidy might actually resulted in an improved level of service, providing tax breaks for freight forwarders and ports like Waterford or Foynes-Limerick and making rolling stock available to open access operators might actually open up the rail fright market

Edited August 12, 2015 by Mayner

[jhb171achill]

Already, the RPSI is technically entitled, as a fully fledged railway operator, to run public services within the south....

[StevieB]

Surely you're not suggesting that RPSI runs the passenger services in the Republic!

 

Stephen

[hurricanemk1c]

The key word there would be *techincally*. Techincal and physical working are two different things.

 

And besides that, they already have. Any tour that goes Ennis-Limerick is in public passenger service, with Iarnród Éireann valid tickets for that section acceptable due to pathing restrictions

[jhb171achill]

In theory, Stevie, they could and have had that right for quite a while now. They would need, in practical terms however, need a good few more volunteers and paid staff!!!

 

My point is that the legal ability is already there.

 

As hurricane says, they have already done so, by using a public train path and serving IE passengers on a scheduled path on the Ennis line.

[Old Blarney]

jhb171achill,

 

Perhaps we have the embryo of an idea here!

 

Many members of the RPSI are former, or current employees of CIE-IR-IE. When the closure of the Waterford to Rosslare Strand section of track was announced, I had a conversation with a former senior member of CIE-IR. We discussed the possibility of reviving a service on that section of railway and to New Ross from Waterford. The train Services Depot was to be based at - Wellington Bridge. Train routes - Wellington Bridge - Waterford. Waterford and West, Possibly including Kilkenny) Waterford and New Ross. Trains then return to Waterford. The proposed rolling stock - 121 and Push-Pull Coaches.

 

Perhaps in 2015 the withdrawn 2700 Railcars would be an alternative as the former are no longer available. We Oldies could be the volunteers on a regular, committed and planned availability. The expertise is available.

 

I use this as an example of what may be possible provided there is a willingness to make something happen.

[jhb171achill]

Old blarney, that would indeed be amazing!

[Junctionmad]

jhb171achill,

 

Perhaps we have the embryo of an idea here!

 

Many members of the RPSI are former, or current employees of CIE-IR-IE. When the closure of the Waterford to Rosslare Strand section of track was announced, I had a conversation with a former senior member of CIE-IR. We discussed the possibility of reviving a service on that section of railway and to New Ross from Waterford. The train Services Depot was to be based at - Wellington Bridge. Train routes - Wellington Bridge - Waterford. Waterford and West, Possibly including Kilkenny) Waterford and New Ross. Trains then return to Waterford. The proposed rolling stock - 121 and Push-Pull Coaches.

 

Perhaps in 2015 the withdrawn 2700 Railcars would be an alternative as the former are no longer available. We Oldies could be the volunteers on a regular, committed and planned availability. The expertise is available.

 

I use this as an example of what may be possible provided there is a willingness to make something happen.

 

Great idea but I suspect insufficient passengers. Even when services existed , numbers were tiny. I suspect the maintenance costs of using old stock on a regular scheduled service would break the rpsi.

[Junctionmad]

Reading all of the above, I think that the only viable solution is for a country to own and maintain the network, and provide this only if it is deemed of national importance. This will always be at a loss to the taxpayer, but view it as an asset for the benefit of the country. Imagine if the government decided to privatise all of Irelands streets and roads?! In a purely commercial sense, of course many of them are uneconomical and costly to maintain, but of course the road network is a vital part of our economy, and an important 'asset' of the State.

 

The challenge then is to try and develop business opportunities and ultimately revenue from these State assets.

 

Roads in general cannot be compared to railways , people " live" by the side of a road. They don't live on a railway. Roads are not just a transport medium , they are an access medium. Railways, certainly today are not.

 

Motorways are in effect already partially privatised via ppp operate and build contracts.