Trains – Unfinished business


Whilst the Department of Transport is grappling with meeting its public expenditure cuts, (memo – scale back the Crossrail investment programme), there is still unfinished business on the railways.

First, commuter fares need to be addressed – most are price-regulated. The recent rise in inflation will push up commuter fares and the Treasury may demand a further increase – up to 10% in total for hard-pressed commuters?

To offset higher commuter fares, greater efforts should be made to generate efficiencies on the system, especially at Network Rail.

Since the unnecessary demise of Railtrack in 2001, Network Rail has at least carried out most of its investment programme – and especially the West Coast Main Line upgrade project that virtually ran out of control. But its net debt has now soared to £23 billion, as cash flows rapidly out of the business.

However, the many shortcomings of Network Rail, especially its high cost base and its byzantine governance structure, are becoming apparent. There have also been several unsavoury – and unsubstantiated - media reports about senior Network Rail staff excesses which Chairman, Rick Haythornthwaite, needs to address urgently.

Furthermore, Network Rail’s corporate structure, which is reminiscent of a water company in the 1970s, needs to be overhauled. Quite simply, the quaint ‘member’ system is not in keeping with 2010 management practices.

The railway franchise arrangements – a legacy of the botched railways privatisation of the 1990s - need to be reformed. The franchises should be larger, longer and less prescriptive - but very punitive if a franchisee fails to meet accepted standards without genuine excuses.