Impacts of privatising Britain's rail passenger services -- franchising, refranchising, and Ten Year Transport Plan targets

Document Type

Journal Article

Publication Date

2004

Subject Area

organisation - contracting, organisation - privatisation, place - europe, mode - rail, ridership - growth

Keywords

Britain, franchises, privatising, medium-term contracts, ridership growth

Abstract

Britain's passenger rail services were privatised in 1996/97 to reduce public subsidies and produce customer benefits through the private sector competing for medium or long-term franchises. Private sector franchisees were committed to investment in rolling stock, services, and infrastructure and were expected to deliver more market-oriented and cost-effective services whilst subsidies decreased on an annual sliding scale. The author analyses why some franchisees have been unable to achieve the annual financial improvement required to match tapering subsidies. The greatest challenges are identified in Regional franchises outside southeast England, where contracts were let towards the end of rail privatisation when competition was fiercest. Some contracts have been terminated or renegotiated. Reasons are investigated for record levels of passenger traffic across the rail network, privatisation's major, and unexpected, achievement. Traffic growth slowed, and was confined to the London and South East sector, after the Hatfield accident in October 2000. Reasons are identified for delays in refranchising and the sudden policy change from long-term investment-led franchises to short or medium-term contracts. The comparative financial and customer benefits of refranchising are analysed. Finally, the achievability of the government's Ten Year Transport Plan target of 50% growth in passenger traffic is questioned.

Rights

Permission to publish the abstract has been given by Environment and Planning, copyright remains with them.

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