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The Great Train Robbery: Privatizing Europe’s Railways

The station in Parchim (population 20,000) in northern Germany is for sale; its graffitied buildings are locked, and there is only a coach timetable on display. At the red brick station in Ashington (population 28,000) in the north of England, an askew sign on the boarded-up ticket office warns passers-by to stay clear of the track: the express from Edinburgh goes through three times an hour without stopping. A local said: “By train, we’d be half an hour from Newcastle, but they don’t run any more. The motorway gets congested as you near the city so you can’t be sure how long it’ll take. But there’s no other route, so the coach has to use the motorway.” If the traffic keeps moving, it takes 55 minutes to Newcastle by coach and 30 by car.

Station closures are a visible result of the liberalisation of the railways across Europe over the past 25 years. It did not happen unopposed. In May 2014, residents of Haukivuori in Finland demonstrated against the closure of their station and one, Liisa Pulliainen, said: “It’s unbelievable that they’re closing a station that’s existed for 125 years just to cut three minutes off the journey from Kouvola to Kuopio. It’s as though more than 12,000 people no longer matter to VR [VR-Yhtymä Oy, Finland’s state rail company]. All this to create a plane on rails.” Privatisation creates two-tier transport systems: the high-speed lines — planes on rails — are used by the most affluent travellers, who get all the attention, while local transit and everyday needs are neglected (1).

Finland’s state rail operator, now restructured on EU advice as a group of 21 companies, closed 28 out of 200 stations in September 2015 and reduced passenger services on branch lines. This March, the government indicated that it would open up the railways to competition, and a few days later, VR announced it was laying off 200 drivers, which provoked a 24-hour strike. The strikers were especially critical of the deterioration in services because of competition: it is now impossible to get information in Finnish stations or aboard trains, to get directions to connecting services or to have luggage transported. Travellers have to find their own information and buy tickets online.

The situation is similar at Stockholm’s central station, where many rail operators compete for passengers, making travel options complicated. (Travellers have a choice of 36 operators to get to Malmö.) Tickets booked in advance are cheaper, as is off-peak travel, but these tickets are not transferable if travellers miss their train. They need to spend time online seeking out the best deal, as ticket office staff only give information about their own company.

Making travel simpler

The ambitions of European Council directives passed since 1991 — especially the railway packages introduced since 2001 — are clear: to simplify rail travel, stimulate competition and bring down fares. The ultimate goals are a universal ticketing system with transparent pricing, interoperability between countries (harmonised electricity supplies, track gauges, signalling and safety standards) and more high-speed trains. These sound attractive, but come with conditions: the break-up of national rail companies through the separation of infrastructure (the track) and train operation (transport services), then a further splitting of functions (sales, cleaning, maintenance, train driving and controls) to create competition.

The first packages dealt with goods transport, which was massively deregulated, so rail freight companies are now in competition not just with each other, but with road hauliers too. In this environment, rail companies have diversified into road haulage on the model of France’s SNCF and its Geodis subsidiary, and as a result, while the volume of goods transported in Europe has remained relatively stable, rail freight’s share has shrunk. Road haulage can reach places no longer served by the rail network, and its operators have benefited from a reduction in costs after this sector of the European market was opened up. This has been detrimental to air quality, as road haulage is a major producer of pollutants and greenhouse gases.

Competition has harmed wages as well as impacting the environment, as is apparent in Switzerland, a transport hub for north-south traffic. Crossrail AG, which has taken advantage of the opening up of the Swiss network, pays its drivers under the terms of Italian law: 3,600 Swiss francs ($3,685) a month, 2,000 francs ($2,050) less than the salaries of Swiss national operator CFF. In 2016 a federal court found in favour of the transport workers’ union, SEV, which claimed Crossrail’s pay policy breached railway law, stipulating that access to the Swiss network is contingent on observing prevailing employment conditions.

Swedish rail workers struck for over two weeks in 2014 in protest against Veolia’s contracts and pay rates. The French company, which operates a franchise in southern Sweden, had planned to end the full-time contracts of 250 railway workers and re-employ them on temporary or part-time contracts. Journalist Mikael Nyberg has called the dismantling of Sweden’s national rail system, which used to have a reputation as one of the fairest and most reliable in Europe, “the great train robbery” (2), and an opinion poll found that 70% of Swedes favoured a return to a state railway monopoly (3). Since privatisation in 2001, travellers have not experienced the promised benefits: the network is expensive, complicated and unpunctual. The increase in rail traffic has worsened congestion and causes regular disruption: 70% of the network is single-track, so the rail infrastructure is unable to develop the promised high-speed train service, as goods trains and frequently-stopping regional services slow down fast trains, and any disruptions have immediate knock-on effects. The solution would be to build a new network rather than adapt the existing one, and one is planned between Stockholm, Göteborg and Malmö. But competition among operators has done little to improve the network. Infrastructure investment is not profitable, and does not appeal to rail operators anywhere.

Accidents are up

With inadequate investment across Europe, the number of rail accidents has been increasing since Hatfield in 2000 (four dead, 35 injured) and Potters Bar in 2002 (seven dead and 76 injured): both were in the UK, which led the way in rail privatisation. The inquiry into the Hatfield derailment found the entire UK network was in poor condition because of chronic under-investment, although Railtrack, the now-defunct company that owned and ran it, was amassing profits. Railtrack was ordered to replace defective track and requested government subsidies, some of which went on dividends to shareholders (4). In France, the reduction of production costs and the subcontracting of maintenance have degraded the network. The derailment on 12 July 2013 at the station in Brétigny-sur-Orge (seven dead, 70 injured) was the result of a defective fishplate connecting two rails. Such safety issues are partly the result of the poor quality of the track, but also of poor training, especially of drivers. On 8 March 2013 a locomotive at the Penthalaz shunting yard in Switzerland crashed through buffers because it was going too fast, and ended up in the river. A pointsman reported that “the driver didn’t understand what I was telling him, but the main problem was he didn’t understand the engine at all because he’d never seen the instruction manual till he got in the cab.” The driver worked for a subcontractor.

The quest to cut costs, besides eroding working conditions for employees of the major national rail companies, also undermines a tough professional code of ethics that always ensured that anything on the rails was in perfect working order. The new management pressures staff to increase productivity at the expense of quality, and consequently safety. A maintenance worker for Switzerland’s CFF for 32 years told us: “I’ve always had excellent appraisals, but then my boss told me off for doing too good a job, for being too scrupulous; ‘just do your bit and don’t worry about anything else.’ But I can’t work like that. If you see a worn cable, you replace it, even if your job is working on the brakes. My job is safety. They’re always on at us about that, but safety means paying attention to everything. Not doing a sloppy job.”

The story from workers and managers was the same at an SNCF maintenance depot in central France. The former HR director described how profitability became much more important in the 2000s: “Before then, the main thing was that the job was done well. There wasn’t this idea of accounting for costs; we were mostly concerned with the quality of the service provided. The service had to be good. If it was expensive, that didn’t matter too much.” Safety was the priority then; now comparisons with the private sector on the cost of hours worked are standard.

The French government will stop funding most night trains this year, and passenger rail services will be opened up to competition in 2020, the last possible date permitted by the EU; the EU is initially targeting commercial national lines (the TGV) — and then “public service” lines (local and intercity), probably in 2024. This timeframe explains the intensity of recent SNCF industrial action: the unions are trying to make their voices heard in negotiations with the Union for Public Transportation (UTP), made up of the SNCF and private operators, on the collective agreement that will govern working conditions for all railway employees.

The fourth railway package means to make countries that have been slow to deregulate yield, ostensibly to “eliminate the last obstacles to the creation of a single European rail space” (5). The reiterated aim is to create a more competitive sector, though the negative effects of the widespread introduction of competition are already apparent. After the Hatfield crash, the UK government had to involve itself again in the railways it had privatised seven years earlier (Railways Act, 1993), though it stuck to deregulation with passenger services. Since privatisation, around 30 different companies have held UK franchises. That privatisation has been a fiasco is evident from the incessant rise in ticket prices (6% in 2012; 4.2% in 2013; 2.8% in 2014; 2.5% in 2015) and from the regular injections of public cash needed to keep the infrastructure functioning (6).

There is a further problem — especially if the UK exits the EU — that few UK franchise holders are British companies: Deutsche Bahn (through its subsidiary, Arriva), France’s Keolis and RAPT, and the Netherlands’ Abellio. So privatisation has actually contributed to the decline of UK-funded businesses. Citizens’ groups have for years run campaigns to reopen stations or lines previously classified as unnecessary or unprofitable (7). In the UK as elsewhere, there is potential for railway workers, passengers and local politicians to join together to defend the values of public transport.

Notes.

(1) See Vincent Doumayrou, “Public transport to the fore”, Le Monde diplomatique, English edition, September 2012.

(2) Mikael Nyberg, Det Stora Tågrånet (The Great Train Robbery), Karneval, Stockholm, 2011.

(3) Jenny Björkman and Björn Fjæstad, “Svenskarna vill ha statlig järnväg och marknadshyror”, Dagens Nyheter, Stockholm, 7 June 2014.

(4) Christian Wolmar, “Forget Byers: the scandal was in the original sell-off”, The Guardian, London, 8 July 2005.

(5)  The 4th railway package: improving Europe’s railways, 22 December 2015.

(6) “Report from Sir Peter Hendy to the Secretary of State for Transport on the re-planning of Network Rail’s Investment Programme”, November 2015.

(7)  www.disused-stations.org.uk/…

This article appears in the excellent Le Monde Diplomatique, whose English language edition can be found at mondediplo.com. This full text appears by agreement with Le Monde Diplomatique. CounterPunch features two or three articles from LMD every mon

 

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