Subject:
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Re: British railway industry (was Re: UK devolved government (was Harry Potter but who remembers that?)
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Mon, 10 Sep 2001 12:33:34 GMT
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Viewed:
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1297 times
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In lugnet.off-topic.debate, Simon Bennett writes:
> In lugnet.off-topic.debate, Larry Pieniazek writes:
> > In what way is Railtrack an example of privatization?
>
> Well that's what it the Government called it at the time!
Yes. But calling something X doesn't make it X. Unless you agree that
California recently "deregulated" its power industry.
> A state owned
> business was split up and the parts were either sold, floated or transferred
> under franchises. Of course you are right that Railtrack is a monopoly but
> it's still 'private'.
>
> It seems that the Treasury were (and are) so in love with the idea of
> markets that they decided they were a good thing no matter what and set out
> to 'design' one for the rail industry. I believe that markets must evolve
> and to design one is asking for failure.
I totally agree with that! In our country the FCC seems bent on engineering
the "correct" number of wireless providers. First we had too few when they
allowed only 2 per area, now we have too many when they mandate that no one
can control more than a certain percentage of spectrum. Gaack. Well
hopefully that's about to change.
> This point, that it is competition
> that creates incentive and not just 'profit motive' was central to Bob
> Kiley's first report on Underground PPP. There is no competition in the
> scheme at all. It is worse than the current system where private companies
> do the work on small short-term contracts which they must compete for. (I
> think people must think that LUL does all its own engineering, it doesn't.)
>
> >
> > There's still one company controlling *all* the track that is just as
> > hobbled as ever, if not more so than BR was, it just supposedly has private
> > owners... I dunno about you, but I'd much rather own shares in the operating
> > companies, which do compete against each other after a fashion,
>
> after a fashion is right. They are regional monopolies on fixed term
> franchises and their main market (commuters) is price-controlled in a way
> that BR never was!
Yes, I had personal experience of the operating companies. Lovely. Except
for certain plums like the train to Gatwick or Heathrow, you get one choice
and that is is.
> > than in the
> > big ugly monopoly that owns all the track and has no incentive to do
> > anything well.
> >
> > Take a look at the cockamamie incentives in place. The original operating
> > companies
>
> (What do you mean by original? Big Four or the very first railway companies
> from the early C19th? :) Remember that during this century most of the
> railway was subsidised despite being nominally private and the mergers to
> create the big four were instigated by the government.)
Early 19thC.
> > AND their track should have been restored in some semblance so
> > that there are competitive lines, with the operating companies owning the
> > infrastructure. Just like Conrail was carved back up into essentially its
> > two major constituents by NS and CSX.
>
> That would be better (much debate in the industry is about how to restore
> the links at the wheel-rail interface so that safety can be better managed)
> but not much, because the competition is not real, the lines are not close
> enough to each other to properly compete (unless you count people moving
> house to get a better train service which I doubt happens very much).
> Rail's competitor is Road and that's how I think the industry should be, the
> infrastructure should be government owned and run with the services
> franchised with greater competition so the regulation could be of the
> competition and not the price.
Well if you've rationalised away all the competing lines, maybe. But in the
US we still have enough (freight) lines to get healthy competition in many
cases.
> I believe in competition except where there has to be only one set of
> infrastructure to avoid environmental or other problems. Roads, Railways
> and Electricity, Gas and cable telecommunications transmission (not
> generation or supply) are examples of this. I am constantly astonished that
> this is not only not self-evident but not even remotely recognized by so
> many others.
I am not sure I am at all convinced of this and I've seen numerous studies
that argue that even "natural" monopolies can have competitive setups except
perhaps at the very last mile sections. Cable telecoms is a classic example.
*Everyone* is convinced that you should have only one in an area or city,
yet we have a few (not nearly enough, thanks to corrupt or inept governments
that won't allow competition) cities in the US that have several... guess
what? Better service, lower prices, more tax to the local munincipalities
and faster new features than the next town over where it's a monopoly.
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