What price a new railway?

Some of the most difficult emails or letters I receive tell me we need to nationalise the railways. I write back pointing out that is exactly what Labour did when they took over Railtrack and put it into 100% taxpayer ownership, and strengthened the controls of the state over the contracts of the individual train operating companies that run trains on the nationalised railway. Today’s problems in the railways are the direct result of having a nationalised monopoly railway with access to huge sums of taxpayer cash.

In the year to March 2014 the Network Rail accounts show that the five executive directors were paid £990,000 (2 people successively in the same post),£922,000, £880,000, £890,000 and £567,000. It is difficult to understand why the state sector pays such huge salaries to people who presumably have some sense of public service and duty, and when the railway pre subsidy is heavily loss making, offering an indifferent service to its users. The only explanation for such large salaries must be the talent and ability of the people concerned and the results they are achieving. In which case, why aren’t the financial and operational results better?

I raised the issue of Network Rail’s poor financial performance and high cost base in the Commons during the productivity debate, before the latest problems were known. I also met with representatives of the industry at the Commons recently and asked them about the high costs of work being done. Why I asked, did the welcome improvements at Reading station cost somewhere between £850million and £900 million when the original estimate was reported at £400 million? Although this was the prime project Network Rail reported last year no-one at the session could tell me which was the right figure for the cost or why the original cost/plan had been so much lower. The representatives of the industry did not come across as regarding cost or taxpayer money as that important. I still await a written reply to my queries at the meeting.

I also pointed out to them that when I travel on the railway I see plenty of evidence of poor management. I see large areas of unused land close to stations and town centres, with no sign of anyone trying to use or develop it in ways which could improve the facilities and bring in private sector investment or cash. I see supplies of building materials, sleepers and engineered products lying around decaying. I see old coaches, engines and wagons left in sidings to rust. I see sidings and branch lines with weeds growing high between the tracks. It does not look like a well run business, with proper control of its stocks and assets. They need to clean the place up, see what they have lying around, use the stocks and assets or sell them off for scrap or recycling.

The present failure to proceed on time and budget with the electrification schemes the railway top management have always said they need to run a better service is shocking. I have myself been sceptical about the need to change traction to get a better railway, but it is this railway management’s mantra and if it brings better trains and more services then all well and good. Electric traction should be dearer than diesel, as it is a secondary fuel. There are substantial fossil fuel energy losses when generating the power in the first place and losses in taking the power to the tracks as well as the energy inefficiencies in the electric engines themselves.

I hope the Minister will use his unwelcome pause of modernisation schemes to review whether there are quicker and cheaper ways to give people a better service with more trains when needed. The new Chairman needs to review his top team and see if with better leadership they can do the job, or whether some of them need replacing as well. What is clear is so far the state is overpaying the management of the railway for what they do, and proving again that nationalisation does not work well.