Network Rail in line to take control of trains in major overhaul

swissrailpassion said:

Intercity, Gatwick Express and Network Southeast ran at a profit in the days of Bob Reid No 1.
That equates to
ECML WCML GWML, SWR, SE, GN and Thameslink, Midland Mainline, Southern and Anglian mainlines.
The decision to abandon sectors and go with franchising was an expensive mistake.

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NSE broke even. I don’t think it was ever profitable. IC definitely was very profitable.

cjmillsnun said:

NSE broke even. I don’t think it was ever profitable. IC definitely was very profitable.

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I think that either its last financial year was just barely profitable, or it was expected to turn a profit the year it was dissolved.

Presumably Railfreight was also profitable, or else it wouldn't have been bought as an operation (well, five operations) the way that it was.

RLBH said:

I think that either its last financial year was just barely profitable, or it was expected to turn a profit the year it was dissolved.

Presumably Railfreight was also profitable, or else it wouldn't have been bought as an operation (well, five operations) the way that it was.

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Railfreight as sold may have been profitable, because it pays lower access costs than it would do on a straight commercial basis. Nor does it pay a fair amount for the disruption it causes. But then it's not really about making a profit, just as rural passenger services aren't.

cjmillsnun said:

NSE broke even. I don’t think it was ever profitable. IC definitely was very profitable.

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Broke even if you split costs in certain ways. Even saying IC was profitable ignores the fact that it was given special treatment in many ways, for which it didn't pay a penny.

There's lies, damn lies, and "profitable".

HH said:

Railfreight as sold may have been profitable, because it pays lower access costs than it would do on a straight commercial basis. Nor does it pay a fair amount for the disruption it causes. But then it's not really about making a profit, just as rural passenger services aren't.

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Of course, if you'd put more of the burden of infrastructure costs onto one business line, you'd have reduced it on another business line, improving the profitability of that. Expecting that every business line carries the full cost of the infrastructure it uses is double accounting.

I've no idea how BR apportioned infrastructure costs. It may well have been relatively crude and/or politically motivated to shift profits and losses into politically acceptable places.

RLBH said:

I've no idea how BR apportioned infrastructure costs. It may well have been relatively crude and/or politically motivated to shift profits and losses into politically acceptable places.

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I believe it was something like:
- If Regional Railways/Provincial have any services on a given section of line, they pay the full cost
- If RR don't, but IC do, they pay the full cost
- If RR and IC doesn't but freight does, that pays the full cost

I don't know about NSE vs RR if those overlapped at all.

This obviously makes IC and freight seem disproportionately profitable, particularly where RR had a Parliamentary style service e.g. Chathill.

RLBH said:

Of course, if you'd put more of the burden of infrastructure costs onto one business line, you'd have reduced it on another business line, improving the profitability of that. Expecting that every business line carries the full cost of the infrastructure it uses is double accounting.

I've no idea how BR apportioned infrastructure costs. It may well have been relatively crude and/or politically motivated to shift profits and losses into politically acceptable places.

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The point is that how you apportion those costs is very important in determining what is "profitable". There are lies, damn lies... and cost accounting.

HH said:

The point is that how you apportion those costs is very important in determining what is "profitable". There are lies, damn lies... and cost accounting.

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Aye - the apportionment tells you more about the motivations of the people doing it than about the actual cost structure of the business. The approach described by Bletchleyite is definitely a blunt instrument designed to make InterCity and Railfreight look good - or just as possibly make Regional Railways look bad!

It's certainly interesting that North & South Railways - the progenitor of EWS - thought that all three trainload freight businesses (which were of course one business sold off as three more-or-less arbitrary chunks) and the parcels business were potentially profitable, but wasn't interested in Freightliner.