Posted 30th March 2015 | 9 Comments

Network Rail privatisation rumour rejected by DfT


THE Department for Transport has denied reports that Network Rail could be returned to the private sector.

The main cause for concern is said to be NR's debts, which are set to reach £40 billion by 2019 and are now on the public books after NR was reclassified as a government body in the public sector last September.

Various possibilities are said to be on the table, including dividing NR into regions as well as the more extreme option of involving the private sector once again.

NR's predecessor Railtrack was a plc, listed on the stock exchange, but was put into Railway Administration in October 2001 and replaced by not-for-profit Network Rail a year later.

The DfT said: "The government has no plans to break up Network Rail."

Meanwhile, RMT general secretary Mick Cash said: “It is no surprise to us that the run up to the election has been chosen as the vehicle to flag up the break up and privatisation of Network Rail – a move that would drag us right back to the lethal and chaotic days of Railtrack which led us to a wave of disasters including Hatfield, Potters Bar and Ladbroke Grove.

“RMT has warned repeatedly that demands for cuts at Network Rail, alongside the fragmentation of maintenance and renewals and the proliferation of contractors, were being used as a way of undermining the organisation to set it up for privatisation – a scenario which hasn’t been helped by some shocking mismanagement like the shambles at London Bridge.

“However, the current problems support the case for public ownership of the entire railway, not a further drive to fragmentation, profiteering and privatisation that would raise the horrific spectre of RAILTRACK2. RMT will fight these moves.”

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • Charlie Niven, Uppsala, Sweden

    I know that most people will not have a good word for them but my experience as a seconded Asset Manager was that Railtrack was not entirely a disaster. RT had Regions with their own Board of Directors and this seemed to work at least in Scotland. Decisions could be and were made quickly at the local level without reference to HQ. In fact RT were doing some things right and had adopted progressive measures but NR subsequently seemed to have abandoned some of those. A lot of experienced Engineers were lost at the time of the handover and some Board members jumped ship to one of their main contractors due to an enforced restructuring from HQ.

  • MikeB, Liverpool

    I believe that Network Rail should continue as a "not-for-private profit" PLC with the Government - on behalf of the UK taxpayers - owning 100% of the shares, on the lines of successful Deutsche Bahn.

  • Lutz, London

    Editor; please clarify your question. As it stands there is no business model other than providing unions the mechanism to blackmail the government in power at the expense of the customer.

    (If a private sector Network Rail charged truly 'market price' for track access, etc., no operator would be paying premiums. So public support would continue, but be diverted entirely to TOCs. The railfreight industry would also suffer if its charges were similarly increased. Some of the revenue would be lost to dividends. Most of all, we have already tried this model. It was called Railtrack, and it proved to be a disaster -- in every sense.-- Editor.)

  • James palma, London

    Why on earth should network rail be privatised? What an astounding suggestion from someone i assume is a railway supporter. What it perhaps needs is to be run along whatever lines made east coast trains be so succesful.

    I also think the financial penalties NR have to pay doesnt help. Surely that money is better used for infrastructure work.

  • Steven Antonio, Crawley

    No return to Railtrack days please. this was one of the biggest retarding factors of the development of the railways, and was in reality justa massive share price manipulation exercise.

  • Lutz, London

    NR should have been sold last year, but it's value has peaked given the damage to it reputation, inability to cut costs, slack management, plus the increasing debt pile.

    Still, it has to go, the sooner the better.

    (Why? What is the business model? --Editor.)

  • James palma, London

    Any bets when the announcement for privatisation will be, then? After the general election, definitely. Next year? Probably. Mikeb, it probably is all worked out, hence the leak 😀

    Its probably to test the water and public reaction. Personally i dont care what the unions say, they are just as bad as politicians.

  • MikeB, Liverpool

    Beware civil servants and politicians denying reports!!!! In this regard, it probably means that privatisation could happen but nothing has yet been worked out.

  • Ian Hughes, Reading

    Network Rail has never been "not for profit". It is "not for dividend". Profits from its operations are recycled into the business.

    (I think you will find that 'not for profit' is habitual shorthand in the industry for 'not for private profit'. To quote a recent Parliamentary research paper: "The company was ‘not for profit’, which did not mean it could not make a profit but that to do so was not its primary aim. Any operating surplus would be reinvested in the rail network."--Editor.)