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‘One way ticket to disaster’

Network Rail sell off could cost billions
Hajera Blagg, Wednesday, June 29th, 2016


Network Rail – a public body operating UK rail networks – has begun selling off assets valued at £1.8bn in a bid to make up for a massive government funding shortfall.

 

 

But a new report has found that the planned sell-off could end up costing the taxpayer more than £10bn over the next decade, while also making rail journeys more costly for passengers – and less safe.

 

 

Electrical power assets were the first to go in Network Rail’s fire sale in early March of this year. But the organisation is also looking into selling 18 of the nation’s major railway stations it owns, including Paddington, London Waterloo, and the major stations in Leeds, Edinburgh, Glasgow, Liverpool, Manchester, Bristol, Birmingham and Reading.

 

 

Commercial properties – including 5,000 railway arches, where so many small businesses set up shop – are also set to go. While this move stands to raise millions of pounds, it would also mean significant loss of long-term rental income, all of which would be reinvested in improving the service.

 

 

The report, written by Transport for Quality of Life and commissioned by campaign group We Own It, ultimately concluded that the sell-off plans would mean billions of pounds of taxpayer money wasted on legal fees and administrative costs, in addition to loss of rental income.

 

 

More expensive

 

Plans to fragment the Network Rail system by selling off different parts to different companies, the report notes, will make the whole system much more expensive to run  – and the cost will eventually be passed on to the passenger in the form of higher fares.

 

 

Passenger safety, too, would be at risk as crashes could become more likely. When Network Rail’s privatised predecessor Rail Track oversaw the network, crashes were common – the problem reached a high point when a train crashed in Hatfield and killed four people in 2000.

 

 

“This is a one-way ticket to disaster,” the report noted.

 

 

We Own It director Cat Hobbs noted that train stations, property and assets are “part of our railway and belong to all of us.”

 

 

“If they are sold off we’ll all lose out on the income they bring in forever more,” she said. “As passengers and taxpayers, we want Network Rail to give the red signal to these sell-off plans. They should be managing the railway for our benefit and reinvesting profits, not giving them away.”

 

 

Unite, together with the TUC and all the major rail unions including the RMT, TSSA and Aslef, have come together under the banner of Action for Rail to oppose Network Rail’s asset sell-offs, among other moves to privatise rail transport.

 

 

Action for Rail has called on the government to end its fragmentation of Network Rail and to bring it under full public ownership. At the moment, Network Rail is a not-for-dividend company, which means that it must reinvest all of its profits in maintaining and improving the network. It was reclassified as a public body in 2014 and its £42bn in debts were transferred to the government’s balance sheet.

 

 

In March of this year, the government commissioned a report into the future funding of Network Rail. While the report, written by HS1 chief executive Nicola Shaw, ruled out full privatisation of Network Rail, it called for more private finance and local devolution.

 

 

Unite and other rail unions are concerned that both of these moves – private investment and breaking up the network into regional routes – will only serve to fragment Network Rail at passengers’ expense, while also hitting transport workers’ pay, terms and conditions.

 

 

Body of evidence

 

Unite assistant general secretary for transport Diana Holland hailed this week’s We Own It report as the latest which adds to the “growing body of evidence that privatisation of our public services benefits none of us – except of course to line the pockets of privateers who are literally gambling with our services.”

 

 

“As the report rightly points out, Network Rail needs to operate as a coordinated national service, not a fragmented one,” she said. “The average person will be doubly hit by Network Rail’s fire sales – they will be slammed both as taxpayers, who will be hit with a £10bn bill over the next decade, and also as passengers who will face higher fares.

 

 

“And as the country’s largest transport union, we know only too well the price transport workers pay through privatisation,” she added. “Our history of rail and bus privatisation and deregulation has shown that letting in the private sector does not make the service ‘more competitive’ – the race to the bottom to cut costs and drive up profits means hard-won pay, terms and conditions are under threat, a poorer service that is more expensive for passengers with built-in inefficiencies, and a service that’s less safe, too.

 

 

“Let’s remember why Network Rail was introduced in the first place,” Holland noted.  “Its private sector predecessor Rail Track was a disaster.  Our biggest fear is that privatisation will mean another Hatfield crash just waiting to happen. What the government needs to do is actually fund Network Rail properly and protect it under full public ownership.  This government’s privatisation and austerity agenda is destroying our public services and it needs to end now.”

 

@hajera_unite

 

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