The Privatisation of the UK Railway Industry: An Experiment in Railway Structure

Abstract

The British rail network was privatised in the mid‐ to late 1990s. However, the sector was heavily regulated and not permitted to evolve according to market processes. Indeed, the government imposed a complex and fragmented structure on the industry which ran counter to traditional railway practices. As a consequence, economies of scale and scope were lost, while transaction costs were increased. There was a negative impact on costs and safety. Given the disappointing outcomes, there is a strong case for reforming the sector by facilitating the development of a privately owned and vertically integrated rail system.

Exploring Public–Private Partnership Scheme in Operation and Maintenance Stage of Railway Project

“…Based on the literature study shown in Table 2, most of the operation ranges from 30 to 50 years. Some countries, such as the UK and Netherlands, where the infrastructure manager (IM) exists to manage the infrastructure, private parties are responsible only for the train operation [40]. While in other countries, the private parties only are given the responsibility to provide infrastructure and maintain it in a certain period.…”

Un/Settlement: Counter-Memories of Migration and Railways in Southern Mexico

“…A similar trend occurred in Japan, where the railways' capture of passenger services fell from over 80% in 1955 to 38.5% in 1985; its decline in share of freight market declined from 52.9% to 5 % over this same period (Mitzutani 1999). In the decades leading up to privatization, British Rail also saw a decline in its share of the transportation market and a rise in its dependence on the state for regular financial support (Wellings 2014).…”

“…Eventually, in 1991, ownership and operations of all high-speed railways in Japan were sold to three of the passenger-service oriented Japanese Railway Companies . British Rail was both vertically and horizontally separated by establishing the company Railtrack for infrastructure management and creating 25 companies for passenger train operations and 3 companies dedicated to freight operations (Wellings 2014;Preston and Robins 2013).…”

“…For some, vertical separation was a mistake, evidenced by the bankruptcies and fatal accidents which British Rail experienced shortly after the vertical separation and privatization of both railway infrastructure and operations. 36 Wellings (2014) argues that it is not coincidence that railway infrastructure and operations had always been vertically integrated since the 19 th century advent of the railways (which were introduced as private enterprise, of course).…”

“…Still, for others, vertical segregation was the only way to achieve efficiency and market rule (as opposed to political rule) of the railways (Wellings 2014). Among those who advocated vertical separation, some argued that the state must remain involved in the natural monopoly components of the infrastructure.…”