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When Public Transit Gets Privatized

Here in the U.S., we live under the myth that mass transit should have to pay for itself, that it should exist without infusions of taxpayer money. The whole notion is absurd. Freeways and road improvements use up public funds, and the auto industry thrives on tax breaks and government incentives–the worst of which are exemptions from basic environmental oversight, such as limiting greenhouse gas emissions and adhering to reasonable fuel economy standards. Yet we continue to hold up an unreasonable standard for mass transit: that user fees and other privatization scams will bring us light rail, monorail, and heavy rail systems that don’t need governmental oversight or funding.

In privatizing any public infrastructure, the main focus is shifted away from providing the service itself to making a profit. That’s indisputable. The inarguable goal behind building and maintaining a mass transit system is to move people as efficiently and quickly as possible from one place to another, and to do it safely. Pro-business interests tell us that those two goals can be reconciled. But is that really possible?

Let’s take a look at the British railway system. In 1996, under the Conservative government of Prime Minister John Major, the nation privatized its railways by parceling out contracts to private companies to operate trains and maintain the rail lines. The move was supposed to save money, as private firms would compete to provide the same service that government agencies had formerly handled, at a lower cost.

However, last month, on October 23, the British government announced it was suspending all seven contracts with private rail maintenance companies for financial and safety reasons–a move that would save 300 million pounds per year. This is, effectively, the first step towards re-nationalizing the nation’s railways.

By all accounts, the privatization scheme has been a disaster. Network Rail, the quasi-governmental agency that oversees the private companies performing railway maintenance, went from reporting a 295 million pound profit in 2002 to an almost 300 million pound loss in 2003, while its debts have soared to more than 9 billion pounds. While Network Rail is not a public agency in itself, the British government is the guarantor for its debts, leaving British taxpayers on the hook for its failures.

Most of Network Rail’s loss is attributable to money poured into the maintenance and construction of rail lines. But the safety of Britain’s railways has suffered under privatization. A series of accidents in the late 1990s, culminating with the horrible Paddington accident in 1999 that killed 30 people, forced the British government to liquidate the troubled Railtrack (Network Rail’s predecessor) and reconstitute it as Network Rail, with more emphasis on safety. But the problems have continued.

In 2000 the Hatfield crash was caused by a broken rail on a line maintained by private firm Balfour Beatty. Criminal charges have been brought against a dozen employees of Balfour Beatty and Network Rail regarding this accident. More recently, investigations into the Potters Bar derailment in May 2002 (seven people dead and 76 injured) and a recent derailment at Kings Cross have focused the spotlight on Jarvis, the largest private maintenance contractor on the British rail system.

The Potters Bar crash was caused by a faulty set of points that should have been spotted by Jarvis employees. In November 2002, a coal train derailed in South Yorkshire when Jarvis engineers diverted the train onto a line that was missing a large section of track. In September of this year, a passenger train derailed at Kings Cross because Jarvis employees had forgotten to realign a set of points–an accident that closely resembled the Potters Bar crash; fortunately, the Kings Cross train was moving much more slowly, and no one was killed. Then, approximately a month later, Network Rail discovered that Jarvis employees had cleared trains to pass over rails on the line near Alexandra Palace in north London without having properly reassembled the rails after maintenance work–another derailment just waiting to happen.

In an audit of Jarvis’ records, Network Rail discovered falsified maintenance records on 40 miles of track between Stoke-on-Trent and Macclesfield. Employees took cost-cutting shortcuts when replacing the rails, including skipping a necessary step that would prevent the new track from cracking in cold weather.

After this litany of scandals, Jarvis attempted to put its rail maintenance branch up for sale. When British government regulatory agencies prevented that move, Jarvis withdrew in mid-October from all maintenance work on British railway lines. A scant two weeks later, Network Rail announced it would cancel maintenance contracts with all seven private companies and take the work in-house, effectively ending privatization of above-ground rail maintenance in Britain.

These problems are consistent with complaints made by Britain’s Rail Maritime and Transport union, the RMT, which has protested the privatization process from the beginning. They have charged that private companies hire contractors to perform maintenance work without the proper training. RMT managers at Network Rail and the London Underground are appalled by the quality of the contractors’ work. One manager told the Independent newspaper, “It used to take 18 weeks to train the guys who do the low-voltage cables. Now we get people from agencies who can’t read a wiring diagram.”

The London Underground is in a similar state of disrepair, exacerbated by the age of its infrastructure–much of it dating back to Edwardian and Victorian times. But here, again, the focus is on private maintenance companies; in this case, the entity involved is a consortium named TubeLines, made up of four separate companies: Metronet, Bechtel, Amey, and Jarvis. These companies have a 30-year contract with the London Underground, and it won’t come up for review for another seven years, making it difficult for the LU to do what Network Rail has done and re-nationalize the newly privatized underground system.

The LU or “The Tube,” as Brits call it, has had its own series of derailments and accidents. The most recent scandal involves Metronet, whose employees are supposed to regularly inspect the rails for wear and tear. A Tube train derailed on October 17th because a section of track had not been replaced, even though it had rusted three-quarters of the way through. Then, 48 hours later, another Tube train derailed because of a similar problem with the tracks. An RMT union leader told the BBC that there used to be daily, visual inspections of Tube tracks, but now Metronet employees only inspect them once a week.

The government’s Health and Safety Executive undertook a confidential maintenance study just prior to privatization of The Tube in May of this year. The report, leaked to the BBC, showed that cost-cutting layoffs by London Underground had led to deterioration of the rails. The major culprit: a lack of routine, visual track inspections. In preparation for privatization, the LU had cut the frequency of inspections from daily down to every-other-day. With private contractors now inspecting the rails only every three days or only once a week, the problems will grow more dire, and accidents will continue.

Britain’s failed experiment in railway privatization serves as an example to us here in the U.S. of what can go seriously wrong when public infrastructure is turned over to companies whose main motive is to make a profit. For advocates of mass transit, it’s a cautionary tale. We can’t allow ourselves to give in to local, regional, and national business interests who argue that mass transit should be able to pay for itself. Public investment and continual public management are necessary and far more desirable than the current mess in Britain.

MARIA TOMCHICK writes for the great Seattle weekly Eat the State!. She can be reached at: tomchick@drizzle.com

Sources

“Government takes step toward renationalization of the railways,” Barrie Clement, The Independent, 10/24/03.

Q&A: Network Rail in the red,” BBC News online, 5/28/03,

Jarvis investigated over rail errors,” BBC 3/29/03,

Jarvis’s track record,” BBC, 10/10/03,

Jarvis investigated over rail work,” BBC, 10/27/03,

Jarvis quits rail maintenance,” BBC, 10/10/03,

Network Rail takes repairs in-house,” BBC, 10/24/03,

Analysis: The future of rail maintenance,” BBC, 10/27/03,

“Rail safety move ousts contractors; Unions hail ‘renationalisation’ step,” Andrew Clark, The Guardian, 10/24/03

“Crashes and near misses could derail the privatised Tube,” Michael Williams and Christian Wolmar, The Independent, 10/26/03.

Checks ‘did not find rail problem,'” BBC, 10/18/03,

Second Tube train derailed,” BBC, 10/19/03,

Q&A: Tube derailments,” BBC,

“Tube bosses were told to widen safety checks six months ago,” Danielle Demetriou, The Independent, 10/28/03

 

 

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