City: Off the rails

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The Independent Online
The word that most readily springs to mind when contemplating the Government's Railways Bill is 'unworkable'. Looked at close up, it is a ghastly tangle of rules and regulations; when you step back and look at it from a distance, the pattern is no clearer.

Potential rail franchisees from the private sector - who can be counted on the fingers of one hand - were hoping that the Bill would flesh out last year's rather vague white paper on the guidelines they could use in deciding whether or not to bid for rail routes. Instead, they have been offered further vagueness in a Bill that is ultimately hollow-centred - it is no longer clear what rail privatisation is supposed to achieve.

The worst aspect of the Bill is the system of regulation, whose mind- numbing complexity makes other privatised utilities look like nursery school. The proposed structure for rail is so byzantine that it is likely to stifle private-sector interest at birth.

The Rail Regulator will protect the interests of consumers - both freight and passengers - the Joint Industry Body will regulate through-ticketing, the Health and Safety Commission will regulate safety. There will be tough licensing conditions for franchisees, and their relationships with track, station and depot operators will be monitored to prevent anti-competitive practices.

Even if they got to grips with the sheer administrative complexity of this structure, potential franchisees must assume that if they started to make substantial profits, the regulators would force them to lower their fares.

And there's the rub. The prospect of profits is slim indeed. British Rail as a whole is the first industry the Government has attempted to privatise that does not make profits. The deadening combination of miles of red tape and minimal financial returns is unlikely to stimulate private sector interest. Fear of losing face will prevent the Government dropping the whole idea, but the scheme looks set to wither on the vine of its own accord.

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