The Rail Debate: Sweden's example highlights need for investment

WHILE several European countries have embarked on rail privatisation programmes, none has adopted the model being proposed by the Government.

The closest is in Sweden where, five years ago, the state railway was broken up into two companies; BV, which is responsible for the track and other infrastructure, and SJ, which operates the trains.

While this is similar to the British model, which envisages the creation of Railtrack and a series of franchises that will be granted to private operators, there are important differences.

First, the idea behind the Swedish system is to create parity between rail and road use. Therefore, the government's subsidies have been pumped into the track authority, BV, in order to reduce the marginal cost of operating services and to encourage the use of trains. Charges for the use of the track are not set on a line by line basis but instead averaged out because, it is argued, road taxes are not charged for each road but through the road fund licence. BV is expected only to recoup one-third of its expenditure and makes no charge for new investment.

By contrast, the British Government has said that Railtrack will have to recoup all its charges from train operators who will also have to make a contribution to new investment, on which the Government is likely to seek an 8 per cent return. Although the track-charging regime has not yet been announced, it is likely that charges for particular lines will vary widely.

Second, under the Swedish system, SJ is allowed to bid to continue running all services on lines. In Britain, the Government wants to reduce the number of services being run by BR and will only allow it to continue operating trains on lines where no suitable offers are forthcoming from the private sector. So far, only Sweden's 25 regional lines, which receive subsidy from local authorities, have been put out to tender and SJ has lost only four contracts, all to the same operator in the south of Sweden. The Swedish government hopes to attract more private operators when it fully deregulates the system in 1995.

Critics of the British proposals point to problems in Sweden. They argue that, as in Britain, there has been little interest from the private sector in operating a loss-making business. Second, the separation of responsibility for the track from the operation of trains has meant that the track authority, BV, has not always been responsive to the needs of SJ as they might not have the same priorities. For example, SJ has found it hard to convince BV to repair faulty equipment, even where lucrative business may be lost to the rail network, because the work does not fit in with BV's timetable for investment.

Although the Swedish government wants SJ to become commercially feasible, it has had to step in to save some services to the sparsely populated north because SJ said it was no longer prepared to run them at a loss.

The Swedish privatisation is being supported by the government with cash increases of 45 per cent per year in rail investment over the first four years. In Britain, rail investment will fall next year from its peak of pounds 1.6bn to under pounds 1bn.

(Photograph omitted)

News
Shoppers at Selfridges department store in central London
news

News
Jeremy Paxman has admitted he is a 'one-nation Tory' and complained that Newsnight is made by idealistic '13-year-olds' who foolishly think they can 'change the world'.
peopleFormer Newsnight presenter is being touted for a brand new role
News
Michael Buerk in the I'm A Celebrity jungle 2014
people
Voices
File: David Cameron offers a toast during a State Dinner in his honour March 14, 2012
voicesAnd nobody from Ukip said babies born to migrants should be classed as migrants, says Nigel Farage
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
Avatar grossed $2.8bn at the box office after its release in 2009
filmJames Cameron is excited
Arts and Entertainment
Stik on the crane as he completed the mural
art
News
Happy in his hat: Pharrell Williams
people
Arts and Entertainment
Stella Gibson is getting closer to catching her killer
tvReview: It's gripping edge-of-the-seat drama, so a curveball can be forgiven at such a late stage
News
Brazilian football legend Pele pictured in 2011
peopleFans had feared the worst when it was announced the Brazil legand was in a 'special care' unit
News
i100(More than you think)
Sport
Brendan Rodgers seems more stressed than ever before as Liverpool manager
FOOTBALLI like Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
News
The Magna Carta
archaeologyContemporary account of historic signing discovered
News
Phyllis Dorothy James on stage during a reading of her book 'Death Comes to Pemberley' last year
peopleJohn Walsh pays tribute to PD James, who died today
Sport
Benjamin Stambouli celebrates his goal for Tottenham last night
FOOTBALL
Life and Style
Dishing it out: the head chef in ‘Ratatouille’
food + drinkShould UK restaurants follow suit?
News
peopleExclusive: Maryum and Hana Ali share their stories of the family man behind the boxing gloves
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Senior PHP Developer - OOP, Javascript, HTML, CSS, SQL

£39000 per annum: Ashdown Group: Senior PHP Developer - OOP, Javascript, HTML,...

Austen Lloyd: Commercial / Residential Property - Surrey

Excellent Salary: Austen Lloyd: SURREY MARKET TOWN - SENIOR PROPERTY SOLICITOR...

Recruitment Genius: Graduate Programme - Online Location Services Business

Negotiable: Recruitment Genius: What do you want to do with your career? Do yo...

Recruitment Genius: Senior QC Scientist

Negotiable: Recruitment Genius: This company is a leading expert in immunoassa...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game