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Report calls for part privatisation of Network Rail and scrappage of HS2

8 September 2016  •  Author: Katie Sadler, Digital Content Producer, European Railway Review

A new report published by the Adam Smith Institute has called on the government to part privatise Network Rail and scrap HS2 to reduce costs on the taxpayer.

Report calls for part privatisation of Network Rail and scrappage of HS2

A new paper published by The Adam Smith Institute on 08 September, has urged government to “get Britain’s trains back on track” through a 49.9 percent sell-off of Network Rail, which it says lacks the discipline of the private sector, and should seek to replicate the success of the privatisation of the National Grid worth over £35bn.

Proposes 49.9 percent sell-off of Network Rail

The report, ‘Network Fail: Getting UK Rail Back on Track’, argues that Network Rail is now a strain on the taxpayer with debts of £37.8bn. It believes the sell-off would be of no difficulty citing the government’s 40 percent sale of Eurostar.

Greater competition

The paper, authored by Adam Smith Institute fellow Nigel Hawkins, also appeals for the government to promote vertical integration of smaller Network Rail-owned lines and to crack down on any under-performing rail franchise holders, terminating their franchise if necessary. The report also calls for greater rail competition on trunk routes.

The future of HS2

Proposals also included within the paper include the scrappage of the high-speed rail programme HS2. It believes the project is unnecessary and economically irresponsible, stating current off-peak occupancy levels are well below 50 percent and the programme is costing up to 9x more per mile than high speed tracks in France.

Looking ahead, the report suggests a greater focus on schemes such as the electrification of the TransPennine Railway and moving ahead with the London-Sheffield mainline.

Author, Nigel Hawkins said: “Action to sort out Britain’s railways is a priority. Radical decisions are needed to deliver financial competence, sensible investment and improved customer benefits into the system.

“Scrapping the shockingly expensive HS2, selling up to 49.9% of Network Rail and cracking down on under-performing franchises are priorities.”

Industry reaction

Responding to the Adam Smith Institute’s paper, a spokesman for the Rail Delivery Group, said: “The report’s comments on HS2 are somewhat surprising given HS2’s crucial role in ensuring the country has the railway it needs in the long term.

“The planned devolution to NR routes will create a stronger local focus on the needs of train operators, and thus on passengers and freight customers. It will help to drive efficiency and service quality by making routes more responsive to local situations, while protecting the benefits of a single railway that works seamlessly for passengers. Devolution also enables different models for operating rail infrastructure in different parts of the country with the potential for greater competition between train operators where this makes sense.

“In areas of the railway where there is less room for competition between train operators, devolution allows closer collaboration between an NR route and the lead operator in that area while retaining transparency over the costs of both parts.

“However we organise ourselves in the railway, to transform the experience of customers we need teams that are managed effectively, working together towards the same objectives, and with access to finance for much needed investment.”

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