Who owns/does what on the railways ?

[moonrakerz]

Can anyone recommend a good book (or even a detailed website) that details the relationship between all the various entities that have attached themselves to Britain's railway network.

The sort of questions I would like answered are:

What/how does franchisee ABC Rail Ltd pay to the "Government" ?
How are Government subsidies to the "Railways" paid out ?
Who owns Waterloo station ? or even Dilton Marsh ! Is anyone paying a TOC to "manage" stations, if so, who ? (As a building owner would pay a company to manage a building for him)
Who owns the rolling stock that makes up a particular train ?
Who owns the ballast/concrete/steel that my train is riding on ?

 

[DarloRich]

Network Rail own the stations and lease them to the TOC ( other than the hub stations they manage) and the infrastructure
The rolling sotck is owned by the ROSCO who leases it to the TOC

 

[Zoe]

Network Rail own the stations and lease them to the TOC ( other than the hub stations they manage) and the infrastructure

Even at the stations NR manage, the ticket office staff and dispatchers are usually TOC staff, the most notable exception is Birmingham New Street where Network Rail dispatch the trains. As infrastructure and operations have been separated though I'm surprised they never decided to have Network Rail dispatch the trains at all stations. British Airways don't manage Heathrow Airport.

 

[DarloRich]

Can anyone recommend a good book (or even a detailed website) that details the relationship between all the various entities that have attached themselves to Britain's railway network.

The sort of questions I would like answered are:

What/how does franchisee ABC Rail Ltd pay to the "Government" ?
How are Government subsidies to the "Railways" paid out ?
Who owns Waterloo station ? or even Dilton Marsh ! Is anyone paying a TOC to "manage" stations, if so, who ? (As a building owner would pay a company to manage a building for him)
Who owns the rolling stock that makes up a particular train ?
Who owns the ballast/concrete/steel that my train is riding on ?

you could also have a look a some of the books written by Woolmer about privitisation ( the mention of his name wont be popular on here!)

 

[merlodlliw]

NR don't own all of them, in Wales Rhyl is owned by Denbighshire County Council, Fishguard by Stenna and I am sure Wrexham Central is owned by
a property development Company, all lease the buildings to ATW, the track is of course NRs responsibility .

Must be a lot more in the UK not directly owned by NR.

 

[Zoe]

Must be a lot more in the UK not directly owned by NR.

For a start, Network Rail don't own anything in Northern Ireland. There are also some stations served by TOCs that are owned by London Underground.

 

[moonrakerz]

I think the answers given so far demonstrate why I asked the question !

If NR own the stations, at what point were they given/sold to them ? They used to belong to BR which was a nationalised industry, so in effect they belonged to the taxpayer.
Did the taxpayer get any thing for this - or did he just "give" them away and promise to pay subsidies for ever and a day so that the new owners could make a "profit" on this great investment.

 

[Zoe]

If NR own the stations, at what point were they given/sold to them ? They used to belong to BR which was a nationalised industry, so in effect they belonged to the taxpayer.

Railtrack was separated from BR on 1 April 1994. It was floated on the stock market in 1996, anyone could have bought shares in the company. In 2002 Railtrack was acquired by Network Rail, a private company limited by guarantree.

 

[WatcherZero]

Network Rail is basically a wholly government owned company with an independent board of voluntary shareholders. NR owns all stations except those built by entities other than it, for example GMPTE in Manchester built Lostock Parkway and Northern operate it on a management contract.

Theres multiple types of franchise agreement and a couple of rounds of franchise award so no franchise-government relationship is identical, it is also ever changing so you will have a book that gives you a snapshot but it will never be current. Fundamentally they broke down into three types though:

'No Growth' Franchises like Northern Rail, when it was franchises the government didnt think passenger numbers would rise so it was thought little investment was required, a contract was therefore set up to maintain the status quo. Firstly revenue projections were compiled for each route then quarterly the companies revenue is independently audited, any surplus the government takes straight away, any shortfall the government pays out at the end of the financial year. Because its done on a per route basis the company could in reality be paying premiums to the government for some routes at the same time as recieving subsidy for other.
Over 106% predicted revenue the government takes 80% cut
100-106% predicted revenue the government takes 50% cut
94-100% predicted revenue the government gives 50% of the shortfall
under 94% predicted revenue the government gives 80% of the shortfall

The second type of franchises are 'Premium' franchises, those expecting large growth or which need a lot of early investment which will pay off in later years, there are some aspects of revenue support for example if revenue was considerably below the governments projections they would recieve revenue support. However rather than looking directly at revenue these franchises have a graduated system from annual subsidy to annual premiums which is supposed to reflect the companies making efficency savings and gaining rewards from investment. For example in the first year the company recieves 400m, 300m in second, 200m, 100m, then the company starts paying ever larger premiums to the government 100m 200m 300m 400m etc... They are expected over the lifetime of the franchise to actually bring a net profit to the government.

The third type are 'Management' type franchises, these are franchises expected to be prone to disruption from engineering works, have unstable passenger numbers, etc.. In these the government takes all the revenue and all the shortfalls paying the franchisee a fixed amount to manage and operate the franchise usually with some performance bonuses. The franchisee is able to propose investment over and above what was specified and if approved it will finance the work itself and make the money back either from agreed higher management payments or through extensions to the length of the franchise.

 

[moonrakerz]

Railtrack was separated from BR on 1 April 1994. It was floated on the stock market in 1996, anyone could have bought shares in the company. In 2002 Railtrack was acquired by Network Rail, a private company limited by guarantree.

What you have said Zoe is probably totally factually correct - but - it doesn't answer my question.......especially when I read the next post down from yours, saying ..........

Network Rail is basically a wholly government owned company

"Private company" .................. "wholly Government owned" ??????

............. My brain is hurting again................

 

[WatcherZero]

Private company, government owns 100% of the shares.

 

[cuccir]

Private company, government owns 100% of the shares.

Yes, this is a fairly common situation for a range of public services.

 

[Zoe]

Private company, government owns 100% of the shares.

The government do not own any shares in Network Rail. Actually Network Rail has no shareholders. The words private and public in terms of limited companies do not refer to if they are in the public or private sector but actually if they are able to offer shares to the public or not. Royal Mail for example is a public limited company with all the shares owned by the government. Network Rail though is officially in the private sector, not directly owned by the government.

 

[WatcherZero]

As a company limited by guarantee, we are a private company operating as a commercial business. We are directly accountable to our members and regulated by the Office of Rail Regulation (ORR).

Run like a PLC

The Board runs Network Rail to the standards required of a publicly listed company (PLC).

We produce an Annual Report & Accounts and hold an Annual General Meeting (AGM). We also publish our Business Plan each year – something that very few other companies do.

The government also owns the equivalent of a 'Golden Share' allowing it to override decisions and appoint whoever it likes, change the companies constitution and control of its financing both as the provider of funds and the debt guarentee but also the power to impose financial decisions. A private company cannot exist without an owner and the owner is the government.

 

[Zoe]

A private company cannot exist without an owner and the owner is the government.

No, Network Rail is owned by its members. An example of a limited company owned by the government is Royal Mail, the fact that they are owned by the government though puts them in the public sector. This is not the case for Network Rail, they are in the private sector.

 

[WatcherZero]

Though the Conservatives pledged to include its Regulatory Asset Base in the national debt at the last general election. I guess since then theyve realised its far more conveniant for its debt not to appear on the national balance sheet.

 

[Old Timer]

No, Network Rail is owned by its members. This is not the case for Network Rail, they are in the private sector.

That being the case could you tell Balfour Beatty Rail who they need to pay to buy Network Rail from please.

 

[w1bbl3]

That being the case could you tell Balfour Beatty Rail who they need to pay to buy Network Rail from please.

As company limited by guarantee the owners are the members. They are helpfully listed by NR on there website here. IIRC the articles of association explicitly forbid sale unless agreed by all members.

However Network rail is an interesting case of ownership vs control. Ownership is private but control is public via debit finance and annual subsidy payments from HMG/DfT Rail.
If HMG didn't control the company then making maintenance part future franchisees wouldn't be possible or for that matter HMG would not be able to prevent NR from investing in projects considered worthy that separate finance could be arranged for such as a wider station improvement programme or route electrification.

 

[DarloRich]

That being the case could you tell Balfour Beatty Rail who they need to pay to buy Network Rail from please.

The members - but they cant sell it unlless they all agree! ( and unless the Government say so - which they wont;yet!) ((but the government dont own it so cant give permission to the memebers to sell, who cant sell without government permission!))

and round and round it goes!

 

[Old Timer]

The members - but they cant sell it unlless they all agree! ( and unless the Government say so - which they wont;yet!) ((but the government dont own it so cant give permission to the memebers to sell, who cant sell without government permission!))

and round and round it goes!

So in effect it is controlled and owned by the Government - so not a private Company after all because those shareholders are free to dispose of the Company or any of its assets as they wish.

 

[Zoe]

So in effect it is controlled and owned by the Government - so not a private Company after all because those shareholders are free to dispose of the Company or any of its assets as they wish.

Network Rail does not have shareholders as it's a company limited by guarantree. The government may well be able to control the company but officially it is in the private sector. For example you could make a FOI request to Royal Mail or even East Coast Trains at this time as they are clearly owned by the government but any such request to Network Rail would be rejected as they are a private sector company and not owned by the government. Had Labour wanted to directly own the company they could quite easily have done so.

 

[Old Timer]

Had Labour wanted to directly own the company they could quite easily have done so.

They did so, because THEY (through their Nominee) appoint ALL the members. No spending over and above that AGREED by HM Tresury is permitted as HMG GUARANTEE all liabilities. THAT alone should be the giveaway that HMG own the Company.

Network Rail is ONLY in the form it is because Labour wanted to keep its Liabilities off the public accounts. There is still intellectual legal debate over the legitimacy of Network Rail's status in any case, and by no stretch of the imagination can it be considered a true Private Company because of the location of the guiding mind (HMG Tresury and DfT) and the fact that the "members" do not OWN the assets.

 

[Zoe]

Sorry but you can't deny Network Rail is in the private sector. The government do not own directly own it. Had they wanted to they could have quite simply just directly acquired Railtrack. If you do not believe Network Rail to be in the private sector I suggest you ask them or try a FOI request. Such a FOI request will be denied of course as the FOI does not apply to companies in the private sector.

 

[ralphchadkirk]

Sorry but you can't deny Network Rail is in the private sector. The government do not own directly own it. Had they wanted to they could have quite simply just directly acquired Railtrack. If you do not believe Network Rail to be in the private sector I suggest you ask them or try a FOI request. Such a FOI will be denied of course as the FOI does not apply to companies in the private sector.

They're only a private company when it suits them...

 

[WatcherZero]

Indeed, their only a private company so that the debt doesnt appear on the public balance sheet and so to assuage european criticism that it was the state rescuing a private company.

 

[OxtedL]

Oooh, another one of these threads...

I think we decided what the result was last time.

Then again, it wasn't unanimous. Nor will it ever be, by the sound of things.