Could GB railways return to profit?

[RuralRambler]

True stroy, back in the late 80's after filling my firms car at a small filling station in the East-End, I asked for a receipt. The yound lad quickly wrote one out by hand with "Unleaded £30.00" on it. I had to ask him again for one showing the actual amount I had paid, as it was not physically possible to get £30 worth of fuel in a Ford Sierra, even with an empty tank in 1989.

Well known that filling stations weren't too bothered about handing out those paper receipts, often they didn't even write anything on them, just tore one off the pad and handed it over (and if you were friendly, you could get a handful, or even an entire pad if you asked!).

 

[billio]

Privatisation resulted in over one hundred private companies involved just in the maintenance and renewal contracts with Railtrack. That number does not include the TOCs and their contractors, or the ROSCOs or the FOCs.

So yes, it was not practical to sell BR as one or a handful of large chunks. But for the system to have been made so complex, there must have been some reason other than making each bit small enough to reduce the risk to a very low level. After all, apart from Carillon, which railway or former railway companies have gone bust? And withdrawing from a franchise does not count on its own.

I don’t remember any other of the so called Crown Jewels being chopped up so much.

A few years ago I think Modern Railways calculated that there were over 4,000 companies involved in providing the railway.

 

[Emmsie]

The onus has to switch from the idea that railways should be seen to be attempting to make a profit to the railways helping us meet our air quality targets, to do that they have to be made cheaper and more convenient and that will cost the taxpayer money.
Of course if rail travel was cheaper and got people out of their cars and onto trains then the tax take on fuel would be reduced.

 

[Nagora]

With due respect, I don’t think you have considered the full potential of driverless cars.

125mph is very much achievable

My comments are from someone who is a rail enthusiast, you can’t beat a more convenient, safer, cheaper form of technology.

True driverless cars in UK towns are decades away; the current systems from Tesla etc are basically shams that barely cope with US-style gridiron towns. 125mph on a motorway is probably doable, but it would be horribly expensive on rubber tyres wide enough to safely corner at that sort of speed.

Going back on topic: a figure of £20b for "running the railways" was quoted way back on the first page. If we take out all the shareholder dividends, which are clearly money down the drain from a service point of view, how much do the companies actually need in subsidies?

Public transport always suffers from static analysis of costs Vs income of the braindead sort Beeching did (although, to be fair to Beeching, he knew it was braindead and was just making sure he got the answer he was being paid for - he may have been a crook and liar, but he wasn't an idiot). The true value of the railways is in what they facilitate - the network effects of people being able to get to places. From the public (i.e., taxpayer) point of view, ticket sales are not nearly the whole story. For example: how much is it worth to a habitual car driver to have all the people on the railways not be on the road slowing him/her down? How about all the lorries that would replace the goods trains? No one is ever going to charge the car driver for that value, yet it's perfectly normal to hear people claim that if this bit of track or that station doesn't take in more cash-in-the-drawer than it costs to run, it should be closed down.

The very definition of "profit" is altered by putting the railways in the context of a national service supported by taxation. I suspect that in that context they have been profitable to us at least since the 1980s and probably perpetually, but the artificial nature of the franchises hides that by artificially boosting the costs.

 

[Bald Rick]

Going back on topic: a figure of £20b for "running the railways" was quoted way back on the first page. If we take out all the shareholder dividends, which are clearly money down the drain from a service point of view, how much do the companies actually need in subsidies?

Shareholder dividends at what level?

TOCs
NR first tier suppliers?
Second tier suppliers?
The fraction of the dividend that Arla dairies pays its shareholders on the profit it makes to deliver milk to my office?