Privatising Network Rail could be bad for passenger safety and lead to higher fares, according to a new report commissioned by the TUC and Action for Rail Campaign.
Staying On The Right Track, written by Dr John Stittle of The University of Essex, warns of a “disastrous” return to the days of Railtrack if NR becomes a for-profit company.
Commissioned in response to the Government consultation being undertaken by Nicola Shaw into the future shape and financing of NR, the report was published on the final day of the consultation period - December 24 2015.
Dr Stittle makes the following arguments against the re-privatisation of NR:
- Under NR’s predecessor Railtrack there were far more workplace accidents, broken rails and train drivers ignoring signals.
- If NR is privatised, money that should be spent on infrastructure will go to shareholders, leading to higher fares.
- Railtrack had a poor record of delivering important infrastructure projects within budget.
- If NR’s debt is no longer underwritten by the state, equity investors may hesitate to invest, resulting in unsustainably high annual interest costs on NR’s debt.
- Privatising NR would exacerbate the challenge faced by the UK rail industry, of being too fragmented, and with competing interests pursuing short-term commercial gains.
“It is essential that the Shaw Commission does not support any form of privatisation of Network Rail,” said Dr Stittle. “Railway privatisation has been a clear and costly failure for both passengers and taxpayers.
“The country cannot afford to have Network Rail privatised, either wholly or partially. The industry must not return to the disastrous era of Railtrack, where shareholder returns were placed above safety and investment.”
The report can be read in full at: https://www.tuc.org.uk/sites/default/files/Network-Rail-Staying-on-the-right-track_0.pdf