Thursday, 28 October 2010

Is rail a natural monopoly?

It's an entry level economic truth that some concerns are natural monopolies, particularly those that need to maintain a high proportion of fixed infrastructure, such as a railway. Then there is a leap of logic that declares that such things need to be a monopoly on a national scale, and this I think is something of a non sequitur. Sure, there's only room for one rail line between Manningtree and Norwich, but why should it be run by the same  Whitehall department, at costs 40% greater than anywhere in Europe, that runs the line between Exeter and Penzance? With train fares set to soar, Neil O'Brien writes in the Telegraph; 
Timetables, prices, even the types of trains used are all rigidly controlled from Whitehall, forcing train companies to run near-empty trains at the strangest times: a friend caught one running at midnight on New Year’s Eve, whose conductor was stunned to see a passenger. If Network Rail were broken up, and Whitehall’s tight control ended, train companies could be run more like low-cost airlines, with the savings handed back to passengers.
I'd be quite happy to run the Manningtree to Harwich line; in fact, I've even got a business plan. The express from London timed to link with the ferries at Parkeston Quay would pay to use my section of track, but only half the amount they're paying now, and running on the same heavy rail tracks would be lightweight rubber tyred stock, with a frequent service, a conductor, low fares and additional unmanned stops. Why not?


Robert said...

It was I believe the EU that insisted on separation of the track infrastructure from the running of trains when BR was privatised. I am not sure, but I bet there is some further EU edict that says you can't break up the infrastructure.

The politicians seem to be getting very keen on a high speed line to Birmingham. I sense the EU's malign influence here as well.

The real truth is that trains do not make profits anywhere. The TGV is a loss maker and the rail network outside the TGV system in France is worse than ours. All railway systems require state assistance in some form. It would be far better for everyone if we tore up the tracks and built roads that we badly need. Railways are so 19th century, even the high speed ones.

Anonymous said...

No the EU only required the accounts to be kept separate. The was bull sit from the Tories.

As all railways including the underground and especially the commuter trains into London make a loss close them down as see what happens to the road congestion.

Ed P said...

The road analogy is dubious, as trains cannot overtake and require aircraft-like levels of safety management. This inevitably leads to a nationally-controlled network of rails, signalling & maintenance (and those with long memories will know what disasters the alternatives bring). The different rolling stock companies could be given more freedon to bid for "line slots", but it would be a restricted freedon at best, due to the safety limitations and few passing places (as not many stations away from the main lines have such a facility).

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