Reid takes on ministers over rail privatisation

SIR BOB Reid, chairman of British Rail, is fighting a tough rearguard action to reshape government plans to privatise the railways.

In behind-the-scenes battles, he is trying to convince ministers their plans will create a legal minefield that could result in trains being cancelled because of disputes between operators and the various quangos created under the new system.

Sir Bob has always been sceptical of the privatisation plans, even though he spent 35 years in the private sector with Shell, and has publicly refused to endorse them. 'If you ask me would I do it at all, that's a question I'm not going to answer,' he has said.

The strong resistance campaign being mounted by Sir Bob and his senior colleagues is bound to lead to a further deterioration in the relationship between British Rail and ministers. John MacGregor, the Secretary of State for Transport, was deeply angered just before Christmas when Sir Bob launched a ferocious attack on the privatisation plans in a radio interview. The chairman had been stung into making the outburst by the appointment of Robert Horton, a former chairman of BP with an abrasive reputation, as a BR board member with special responsibility for the proposed track authority, Railtrack.

Sir Bob aims to convince Mr MacGregor not to separate the running of trains from control of the track in most parts of the network. He said last week he felt such a division would eliminate many of the productivity gains made in the past decade since BR was reorganised into three companies, Regional Railways, Network SouthEast and InterCity.

The Government wants to split up BR into Railtrack, which will handle infrastructure such as signalling and track, and a series of franchises for the lines, which will be sold to the private sector. Sir Bob says this will leave operators blaming the track authority for failures. 'At the moment, the manager running, say, the London, Tilbury and Southend line can look at a bad day and ask 'What went wrong?', so next time he can get it right. We need to keep that command structure. We want to ensure that people running the railways have command over all the resources.'

Sir Bob feels the Network SouthEast lines, and possibly other busy routes, should be 'vertically franchised', leaving the trains and the track in the hands of the same company. Otherwise privatisation will be delayed, he says. 'If you take a disintegrated franchise, with a Railtrack and a separate train operation, you probably have 26 or 27 interfaces for operation with other parts of the railway, signalling and so on and each one has to be safety validated. If you have a vertical franchise, you will probably only have about six interfaces.'

The fears expressed by many critics about the bureaucracy inherent in privatisation are echoed by Sir Bob. 'We have streamlined our operations and we have a real handle on bureaucracy, we've squeezed a lot,' he says. 'It seems difficult to avoid creating a lot of bureaucracy in the new organisations.' He points out that there are 14,000 points where parts of the railway have contractual relationships with each other. Moving from the present managerial structure to a legal one is fraught with difficulties, he says.

On InterCity, Sir Bob is backing a scheme by senior managers to have the whole operation franchised together, ensuring the brand name is kept.

Sir Bob is also concerned about the motives of private operators. 'The regulator (who will oversee prices and competition after privatisation) must have a deep concern that there is no hidden agenda from a private operator to try to schedule trains in such a way as to have a long gap and force people, say, to use the same operator's buses for some of the journey,' he says.

Mr MacGregor has already made some changes to his plans by saying recently that both vertical and exclusive franchises would be considered. The Railways Bill, published on 22 January, allows for this. BR insiders say these concessions were made as a result of pressure being put on the Government by BR. They point out that if BR withdrew its co-operation, the plans would become unworkable.

BR senior managers are pleased with the way Sir Bob is fighting his corner and will not resign, despite attacks from the Tory press. He intends to stay in his pounds 213,000 a year job until his contract ends in April 1995, despite what one manager said was 'a hellish time ahead' for BR.