Rail nationalisations may be coming down the track

[Exvalley]

My belief is that there is plenty of food available to feed the world, but it is your adherence to the need for a profit that stops the hungry being fed. I guess blockades don't exactly help either...

I wonder why you feel that folk working together, co-operating, can't spur creativity and innovation? No profit to cream off?

North Korea’s history of famine and death predates the sanctions. You have to be genuinely ignorant of history to believe that communist and (truly) socialist countries have done a better job of feeding their people.

Can cooperating spur innovation? In theory, yes. Does a profit motive lead to a significant increase in innovation? Absolutely. Compare farming productivity in the Soviet Union to that of the United States. There is a reason why grain was being shipped east.

Better agricultural practices and technology, many of them pioneered in the capitalist United States, mean we can grow much more food on a lot less land. This has resulted in people spending a much smaller percentage of their incomes on food, fewer people going hungry, and a smaller environmental footprint for our farms.

You are essentially arguing that a 1925 Ford can consistently beat a modern day F1 car in a race.

But to bring this back on topic, I believe that one reason why you see absolutely no innovation and improvement in Amtrak’s product is because, at the end of the day, they know the government will be there to ensure their survival. I do believe that the government should ensure that we have a healthy and robust passenger rail system. However, you are seeing the results of government not cooking in some motivation for Amtrak to improve their product in order to survive. Perhaps national passenger rail service should be put out to bid every so often.

 

[caravanman]

I expect you are right, although it must have been a surprise when the USSR used their 1925 tractor to launch the sputnik?

What started as a humorous jibe about capitalist behaviour in the BR train industry has rather gone beyond my area of expertise.

"Perhaps national passenger rail service should be put out to bid every so often". Sounds like a recipe for getting rid of Amtrak? ​

 

[Skyline]

Where did you get the idea Global Warming is not a concern for Americans. You know better than that.

It most definitely is not a concern for the current White House or the current Senate majority and its leadership. Let's see if the majority of citizens change those on November 3. Otherwise we as a nation will have confirmed the worst -- that indeed, Global Warming is not a concern for Americans. A sad prospect the rest of the world is hoping is just a temporary aberration and not our permanent stance.

 

[Lana J C]

Please don't confuse what this president wants or believes with what Americans want or believe.

 

[Asher]

It most definitely is not a concern for the current White House or the current Senate majority and its leadership. Let's see if the majority of citizens change those on November 3. Otherwise we as a nation will have confirmed the worst -- that indeed, Global Warming is not a concern for Americans. A sad prospect the rest of the world is hoping is just a temporary aberration and not our permanent stance.

America is more than this current bunch.

 

[jis]

Look @caravanman, it is you that said that you know which side you would choose. I responded saying I was not sure giving a reason why. Then you apparently proceeded to attack my reason by saying "but the other side does bad stuff too", which is something that I never disagreed with in the first place. As a matter of fact I gavce a hint on how I would analyze which side to support based on all important available information and apparently that was not acceptable to you. So I give up. It is not really a rational discussion anymore.

 

[caravanman]

Look @caravanman, it is you that said that you know which side you would choose. I responded saying I was not sure giving a reason why. Then you apparently proceeded to attack my reason by saying "but the other side does bad stuff too", which is something that I never disagreed with in the first place. As a matter of fact I gavce a hint on how I would analyze which side to support based on all important available information and apparently that was not acceptable to you. So I give up. It is not really a rational discussion anymore.

Sorry Jis,
I tend to roll all my replies into one post, I did not specifically mean all the comments to be a reply to your post, although some were. I accept your well thought out stance, and understood your position on one side v the other.
At the end of the day, this is A.U. so a rational discussion?

 

[MARC Rider]

No, capitalists believe in a free market. They believe that if something is losing money it deserves to go out of business. They view money losing operations as inefficient and therefore a drain on the overall economy.

First of all, there's no such thing as a "free market." In order for markets to work, there have to be some rules.

Secondly, in our business system "losing money" is a very slippery concept, as we all should know from our discussions about the finances of Amtrak food and beverage service. This is why any Hollywood actor worth his or her salt knows to ask his or her agent to secure a "cut of the gross," not a "cut of the net" out of any project on which they work. Hollywood producers are very talented at making sure that most of their projects make very little profit, even though they seem to be able to continue to make pictures and get financing and pay themselves very well.

In the example of the UK train operating companies, a closer look at their finances might be in order to ensure that these companies are, indeed, really "losing money," and not just skimming cash off to the favored individuals who are in charge. However, I would guess that with the decline in traffic from the COVID epidemic, there's a good chance that these companies really are losing money. But it is also possible that some of the top manager and investors are walking away with a lot of money, and that probably isn't a good idea. It's like certain businessmen who seem to have a talent for running multiple companies (even gambling casinos!) into bankruptcy, but appear to come out of that bankruptcy with more personal wealth than when they started. Again, don't know if that's the case with the UK train operating companies, but someone really should check their books closely before they let the companies walk away.

 

[MARC Rider]

Better agricultural practices and technology, many of them pioneered in the capitalist United States, mean we can grow much more food on a lot less land. This has resulted in people spending a much smaller percentage of their incomes on food, fewer people going hungry, and a smaller environmental footprint for our farms.

All of the above isn't necessarily a good thing. Partly because food is so cheap, we eat more of it and mu8ch more than we need, thus contributing to our national epidemic of obesity (of which I am a small part) and the attending health costs. And, having spent a good part of my career studying the effect of modern agriculture on water quality, I can assure you that the environmental footprint of our farms is not getting "smaller." And that's just the "water quality" part.

 

[jis]

In the example of the UK train operating companies, a closer look at their finances might be in order to ensure that these companies are, indeed, really "losing money," and not just skimming cash off to the favored individuals who are in charge. However, I would guess that with the decline in traffic from the COVID epidemic, there's a good chance that these companies really are losing money. But it is also possible that some of the top manager and investors are walking away with a lot of money, and that probably isn't a good idea. It's like certain businessmen who seem to have a talent for running multiple companies (even gambling casinos!) into bankruptcy, but appear to come out of that bankruptcy with more personal wealth than when they started. Again, don't know if that's the case with the UK train operating companies, but someone really should check their books closely before they let the companies walk away.

Most of the TOCs in UK get an operating subsidy from the government. There are a couple of exceptions. But even those get a different subsidy that is then plowed back into Network Rail (the infrastructure).

The much publicized failures were of a few companies that had agreed to a contract that required significant dividend payments back to the government specially in the tail end of the franchise period. The numbers were pretty absurd to start with based on fantastic traffic projections, which of course did not materialize. Yet it was hard to make a solid case against the actual operations guys in those companies. So much so, that when LNER was taken in house, the operations side was kept intact and asked to continue doing what they were doing. The upper management was lopped off, mostly, but surprisingly again the COO remained as is in the new "nationalized" company. The financial structures of these companies and the flow of money from and to the government are part of a truly Rube Goldberg scheme. One needs to read through many volumes of good magazines like Modern Railway to get a handle on what the structure of these relationships are.

 

[MARC Rider]

Perhaps national passenger rail service should be put out to bid every so often.

Are you sure that's a good idea?

There are only a couple existing examples of a similar policy around that I can think of.

The first are the National Park concessionaires. They put them out for bids every few years, so whoever is now running, say, the lodges at Yellowstone is not the same company that was running them when I visited in 2007. Because I don't have any long-term experience of visiting the same park under different concessionaires, I don't know how well the policy works.

However, I do have long experience as a customer of the other example, that of having certain government computer systems put out for bid every so often, and the results are disastrous. I'm thinking of a very nice automated e-requisition system we had that was replaced by a real horrible clunky mess that required multiple day training classes and it was still hard to use and unreliable. Then there was our travel management software. We finally got one that was so easy to use, even a traveler like me could set up travel authorization requests and make our own reservations with few problem, not to mention set up the voucher requests. Naturally, something that good was replaced by a piece of junk that took so much time, we needed to have clerks to do the input work for us, and they would scream in frustration (I know, because one of the clerks sat in a cubicle next to mine.) I always seemed to me that the government should have just hire the IT people and developed the software in-house. With contracting, we're paying the contractor's overhead, the cost of the actual work, and a reasonable profit for the contractor. That's in addition to the salary and overhead costs of the civil servants who manage the contracts.

When I first came to EPA, they gave me a consultant's report to review that cost them half a million dollars. They hired me because nobody in their office had the technical background to understand the report. After reading it, it seemed to me that they could have gotten he same work by hiring a civil servant scientist (or brought one over on a detail) at a fraction of the cost. Who says outsourcing saves money? I managed enough outside contracts in my career to know that's not true.

 

[Siegmund]

Are you sure that's a good idea?

My experience is much the same as MARC Rider's.

Re the National Park concessions - at one time it was a somewhat fair process, with some rigid caps on what the concessioners could charge. It is no more: the companies have been allowed to set prices inside the park to match those immediately outside; and the bidding system includes some huge payments from the new concessioner to the old, for improvement to property made by the old, so in effect the same company always gets the contract if it wants it. (The lodges in Yellowstone, in particular, were run by one company from creation to about 1980, and a second since that time. It has had 4 names, TWA -> TW -> Amfac -> Xanterra, as corporate spinoffs and mergers happened - and prices have roughly quintupled in that 40 years, vs. the tripled you'd expect due to inflation.)

Several years ago they also started contracting out campgrounds - same number of sites, similar level of service, prices doubled overnight.

I also worked for some years at a government lab. And will confirm that you, the taxpayer, got charged about 3½ times my salary for every hour of work I did. We only got Energy and Defense department contracts, because we were charging twice as much as a university would for the same work, so we weren't price-competitive for NSF or NIH money.

Replacing the contractors with government employees would be a huge savings to the government. And better for the employees, who right now have to put up with the whims of both the government (no personal use of computers, for instance) and the contractor (much less favorable retirement and vacation benefits than government employees get.)

My rule of thumb: if it is less than 1 FTE, contract it out. If it is more, hire an employee.

 

[toddinde]

Are you sure that's a good idea?

There are only a couple existing examples of a similar policy around that I can think of.

The first are the National Park concessionaires. They put them out for bids every few years, so whoever is now running, say, the lodges at Yellowstone is not the same company that was running them when I visited in 2007. Because I don't have any long-term experience of visiting the same park under different concessionaires, I don't know how well the policy works.

However, I do have long experience as a customer of the other example, that of having certain government computer systems put out for bid every so often, and the results are disastrous. I'm thinking of a very nice automated e-requisition system we had that was replaced by a real horrible clunky mess that required multiple day training classes and it was still hard to use and unreliable. Then there was our travel management software. We finally got one that was so easy to use, even a traveler like me could set up travel authorization requests and make our own reservations with few problem, not to mention set up the voucher requests. Naturally, something that good was replaced by a piece of junk that took so much time, we needed to have clerks to do the input work for us, and they would scream in frustration (I know, because one of the clerks sat in a cubicle next to mine.) I always seemed to me that the government should have just hire the IT people and developed the software in-house. With contracting, we're paying the contractor's overhead, the cost of the actual work, and a reasonable profit for the contractor. That's in addition to the salary and overhead costs of the civil servants who manage the contracts.

When I first came to EPA, they gave me a consultant's report to review that cost them half a million dollars. They hired me because nobody in their office had the technical background to understand the report. After reading it, it seemed to me that they could have gotten he same work by hiring a civil servant scientist (or brought one over on a detail) at a fraction of the cost. Who says outsourcing saves money? I managed enough outside contracts in my career to know that's not true.

This outsourcing concept is just a recipe for disaster and represents slavish devotion to markets based on ideology rather than common sense. These purely emotional, religious like devotions to privatization cause fiascos like in Mexico with no passenger service at all, and Britain, with hopelessly overcrowded trains and extremely high fares.

 

[user 6862]

and Britain, with hopelessly overcrowded trains and extremely high fares.

May I add to that a very dislocated network that used to be run as a connected whole. One of the UK's problems was poor working practices but dedicated workforce, with the main problem being massively underfunded for far too long due to ideology.

Look what happens when government fully funds a national railway aimed at success centred on the paying passenger ie: Spain, France, Germany, Holland and a few more.

 

[jiml]

I'm selfishly worried about my "bucket list" tour of UK railways to knock off the ones I haven't travelled yet.

 

[jis]

May I add to that a very dislocated network that used to be run as a connected whole. One of the UK's problems was poor working practices but dedicated workforce, with the main problem being massively underfunded for far too long due to ideology.

Look what happens when government fully funds a national railway aimed at success centred on the paying passenger ie: Spain, France, Germany, Holland and a few more.

There is nothing wrong with freight cross subsidizing passenger in a planned way as is done in India. Both thrive, and India is busy bulding an exclusive freight infrastructure get freight trains off of passenger train routes to make it better for both.

 

[jiml]

Thereis nothing wrong with freight cross subsidizing passenger in a planned way as is done in India. Both thrive, and India is busy bulding an exclusive freight infrastructure get freight trains off of passenger train routes to make it better for both.

If only that were the case elsewhere.

 

[MARC Rider]

It seems to me that the owners of private capital are very demanding about the rates of return they think they're entitled to in exchange for financing some enterprise. I suspect that there are a lot of business enterprises (not just passenger railway companies) that could provide a very high quality product and be financially sustainable, yet perhaps not yield the profit that the capitalists believe they deserve to skim off. As there are really no alternative sources of financing business enterprises, this probably explains why nearly everything we can buy in the "free market" nowadays is junk.

Thus, there probably is a definite role for governments to play in providing financing for stuff deemed an essential public service, even if the government doesn't operate it directly. Of course, there's no reason to think that government can't run enterprises perfectly well. After all, we don't contract with "Mercenaries-R-Us" to provide defense for our country, our government directly operates something called the "U.S. Army," and this organization is considered one of the best of its kind in the world.

Our problem is that we're blinded by ideology, mostly working in the service of the owners of private capital.

 

[Skyline]

America is more than this current bunch.

I want to believe that. The truth will be told when and if all the votes are counted on or after November 3.

 

[user 6862]

Thereis nothing wrong with freight cross subsidizing passenger in a planned way as is done in India. Both thrive, and India is busy bulding an exclusive freight infrastructure get freight trains off of passenger train routes to make it better for both.

Couldn't agree with you more providing we don't end up with a situation such as Amtrak's, second class citizens of the US rail world.

I do think that in general Asian countries are far more forward thinking than other regions in respect to future transport. Europe is old and extremely established/set in it's ways, perhaps part of it's charm? The UK tries harder than most to cling to the past and is currently very reactionary, much more than other countries in Europe.
The EU is trying to push forward thinking in all areas but the restrictions are often cost and lack of space, also it's not politically possible to destroy long established communities for a major project.

 

[caravanman]

There is a big difference when comparing India to other places. In India all the trains are well used, often fully booked months in advance for the cheaper fares. It seems capacity, rather than fare price and lack of popularity hold back the passenger rail growth there.
I am always astonished that private companies can be expected to provide a "better" product than a public service provider, and yet make a worthwhile profit for shareholders out of the contract too? There must be somewhere that profit comes from? Efficiencies is always the magic explanation, but lower wages, conditions, of employees, etc, often create that profit instead.

 

[jis]

In India the limited privatization that is being talked about is entirely limited to premium trains, which run at a profit today. Also it is only of OBS mostly, though there is occasional talk about the private companies bringing their own rolling stock. But so far that is just talk. The necessary groundwork for that has not even started yet. IR has to set up the bureaucracy for standards enforcement and certification regime for such to happen.

Freights do not subsidize those. The subsidy is for non premium trains and specially for suburban service, which is intense and is the most intensely used and with almost eye poppingly low fares.

 

[jis]

Wales takes the lead on re-nationalization...

https://www.bbc.com/news/uk-wales-54635421

 

[sttom]

Who would have guessed trying to run public services for profit wouldn't turn out too well for either the public or the company.

 

[neroden]

Wales takes the lead on re-nationalization...

https://www.bbc.com/news/uk-wales-54635421

Scotland will probably be next, when the current franchise expires in 2022 it will not be renewed and the government has promised to consider public ownership. And the Scottish government *is* cost conscious!

Northern Ireland Railways never managed to get really franchised out because no private company wanted to touch it, what with the potential for terrorist bombings and all. So it's run by a vertically integrated government-owned company.

Two English Franchises are government-run now: Northern Trains and LNER. That's pre-pandemic.

The franchise system is ending.