Rail privatisation was a catastrophe. Don't wreck our Tube system as well

'The lesson of the rail crisis is that London Underground should remain a single service'

The tragedy at Hatfield - and the chaos that ensued as Railtrack tried to concentrate safety checks and repairs that should have been happening for months into a few days and weeks - provide a chilling indictment of the consequences for safety and efficiency of the break-up and privatisation of the national rail network. If speed restrictions were necessary on 300 stretches of potentially dangerous track after Hatfield, then the problems obviously could and should have been discovered and rectified earlier, averting the tragedy. It is criminal that people should have to die in tragic circumstances before something drastic started to be done about the appalling condition of the privatised railway system.

The tragedy at Hatfield - and the chaos that ensued as Railtrack tried to concentrate safety checks and repairs that should have been happening for months into a few days and weeks - provide a chilling indictment of the consequences for safety and efficiency of the break-up and privatisation of the national rail network. If speed restrictions were necessary on 300 stretches of potentially dangerous track after Hatfield, then the problems obviously could and should have been discovered and rectified earlier, averting the tragedy. It is criminal that people should have to die in tragic circumstances before something drastic started to be done about the appalling condition of the privatised railway system.

With the worst disruption of rail services for a century, it has become obvious that Hatfield revealed not simply negligence on a particular stretch of track but a systematic failure to deliver a safe and punctual railway system. Revelations that one of Railtrack's main contractors, Balfour Beatty, had been warned in April of the risk of derailments arising from its failure to repair known broken rails, confirmed the public's worst fears. These were aggravated by the fact that, despite knowing of the situation and writing to Balfour Beatty to complain, Railtrack did nothing to force the contractor to secure safety.

Even Conservative former ministers responsible for the structure now concur with Gerald Corbett, Railtrack's Chief Executive, when he told Newsnight that "the railway was ripped apart at privatisation" and that the new structure was not "designed to optimise safety, optimise investment or, indeed, cope with the huge increase in the number of passengers the railway has seen."

What Corbett does not say is that, despite Railtrack's manifest failure to maintain the railways and secure passenger safety, the regime established by privatisation affords the Government virtually no effective remedies. As a private monopoly, Railtrack has the Government over a barrel. Irrespective of its appalling performance, it will continue to benefit from enormous levels of subsidy from the public purse while paying out more than £1m a day in dividends to its shareholders.

That is why the overwhelming majority of people now believe that the privatisation and fragmentation of the rail system has been a catastrophic mistake. That is also why I believe it is vital that the Government reconsiders its proposal to impose a similar fragmentation upon the London Underground, where its consequences would be even more catastrophic because the system operates far more intensely than national rail, with trains every couple of minutes and - consequently - far less margin for error.

The fragmentation of management control on national rail undermined safety, and the private-sector monopolies created put monopoly rents and dividends before the needs of the travelling public and adequate investment programmes.

In systems where it is impossible to introduce real competition, as in the Underground, privatisation, by removing or weakening public accountability, will lead to deterioration of performance. Ineffectual attempts to introduce "competition" into situations that are inherently monopolised will fragment management control, creating further slippages in quality and making it impossible to impose a coherent pattern on systems that, by their very nature, are extremely centralised. All the problems that have appeared on the privatised railways will therefore be replicated if the Government proceeds with its PPP proposals for the Underground.

In the light of this experience, the Government's proposal to break up the London Underground into four parts, including three private-sector monopolies with contracts binding London's elected government for 30 years, must now be reconsidered. It would create the kind of fragmentation of management control that has proven disastrous on national rail.

Responsibility for repairing, maintaining and building new track, signalling equipment and rolling stock is being passed to three private-sector infrastructure companies, while responsibility for train operations and the statutory responsibility for safety will remain with London Underground. Companies involved in consortia short-listed for the PPP contracts include, for example, Balfour Beatty, who were responsible for maintaining the stretch of track where the Hatfield train crash occurred.

And, no matter how badly or unsafely the private infrastructure companies performed, it would be virtually impossible for London to terminate their contracts.

The lesson of the national rail crisis is that London Underground should be retained as a single public-service system under a unified management. The "experiment" of national rail must not be repeated.

Instead of fragmenting management control, the obvious deficiencies of London Underground management should be remedied by recruiting the best management expertise in the world to manage a long-term program of investment financed by bonds, and involving the large-scale deployment of private-sector expertise throughout a radically reorganised unitary system. I have already taken the first step in this approach by appointing Bob Kiley, a world expert on urban transportation with a proven track record in Boston and New York, Commissioner of Transport for London.

With a world-class management team in place, the best option for the Underground is to allow Transport for London to finance investment in the Underground by issuing bonds. These bonds would be secured against a combination of fares revenue, government grant and, potentially, part of the proceeds of congestion charging.

This is the model that has already been successfully employed by New York in the 1980s. Financing investment in the London Underground in this way would be safer, simpler and cheaper than partial privatisation. It would allow for a relatively swift injection of capital, and provide stable, predictable funding so that Transport for London could plan and fulfil its investment programme. Maximum use would still be made of private-sector expertise. But it would be on a contract-by-contract basis under the unified management that is essential.

It would be a tragic mistake, and unacceptable to the vast majority of Londoners, if, after all we have seen over the last year, the Government were to go ahead and create what would undoubtedly become its own version of the Railtrack experience on the London Underground.

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