This is in the Guardian this morning:
The UK government has handed a Chinese state transport and property company a seven-year deal to run one of the Britain's biggest rail franchises in a controversial deal that brings together train and track operations.
MTR, which operates the Hong Kong metro, will run South West Trains (SWT) with FirstGroup from August, on a promise of delivering faster and more frequent services.
The Chinese now join German, Dutch and other state railway operators operating rail services in the UK.
All we lack is a British state rail operator running trains in the UK despite the compelling evidence that state run operators are best equipped to undertake this task. That's the price we pay for dogma. And let's not pretend there is no price: these operators are here to make money at the expense of the UK taxpayer who loses out as a result. It's a pretty good definition of folly. But that doesn't stop it being deeply annoying.
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The same company, MTR, has also been awarded the £1.5 billion contract to run crossrail with the contract that can run up to 20 years.
According to the RMT officer we had speaking at our Labour Party branch last week, all the new franchises will be run on the same lines as the Govia model, i.e. Dept for Transport (AKA DafT) take the fares and Govia gets a fixed service fee and are inured against any kind of service disruption, whether or not caused by them.
Yes, and it is not only trains. Foreign public sector organisations also own substantial stakes in our energy and bus networks for the purpose of rent extraction. Sovereign wealth funds are building student accommodation in every university city and town so they can extract rent from generations of future students. As you say this is madness as profits are extracted from UK taxpayers/debtors and go overseas and when the money does come back to the UK (pounds are not much use in China) it is mostly inflates the prices of existing asset like real estate which does not help the real economy and only exasperates inequality. I do wonder how long such economic folly can endure. What is the end game?
A failed state?
As another one of my posts notes – failing – slowly but surely & all due to the Tories (with a little bit of help from Tory-lite aka the Blair/Brown gov – who could have reversed, for example, – rail privatisation both track & routes – but just took a baby step). NHS – privatisation is well on-track etc etc. Welcome to the Tory-run English Banana Kingdom – where the turkeys (voters?) support Christmas. The longest running collective suicide act of all time.
Not dogma; the Chinese (and Russia) are developing alternative global finance systems to compete with and replace the existing Western-oriented one. Making us available for exploitation is the City’s way of asking to be allowed to play in this new financial playground. “Here, have some peasants, cream off their labour”. Expect standing room only on the new trains 🙁
Restore The Great Central line on which I worked in the 50’s.
And the Maste Cutler
Do you want a British operator to be given the work directly, or to compete with German, Dutch, Chinese operators for tendered contracts (presumably with a view to a profit, without any state aid)?
Do you endorse Carol’s view that the Department of Transport is ‘daft’. I assume not – otherwise, why would you want this important service run by a ‘daft’ organisation?
What I want was called British Rail
I have to agree with you, Richard. In the days of the Southern Region it was possible to travel from Exeter Central to Waterloo steam-hauled by a Merchant Navy or West Country, on some trains in about 3 hours, and faster than today’s diesel units. Also there were the delights of a full silver service in the restaurant cars. Usually my father insisted that we used the Western Region to Paddington, though.
The new franchise arrangement will give First Group a more monopolistic control of the service to Exeter, though this has also occurred with Virgin and the routes to Scotland.
There’s no need to be dogmatic. There are alleged successes under both models – under nationalisation East Coast, under genuine free enterprise First Hull and Grand Central.
But as far as I know there is nothing to stop a nationalised body e.g RBS ( 81% state owned ) from hiring some people who know about trains, adding in their own investment knowledge and putting a bid in. Or CalMac, or TfL. You have to wonder if there is a reason that does not happen.
DfT will not accept a bid from a UK state body, and consequently, none will make one. Noteworthy too is that both Conservative and Labour administrations have expressed deep dissatisfaction at the success of the open access operators you name, seeing them merely as abstractors of revenue from the government. Whilst the regulator (Office for Road & Rail, and its various predecessors) have been the main protectors of these, their authority to do so comes in part from EU regulations. In the miserable event of Brexit coming to pass, it will be interesting to see whether this will be another of those things that goes on the bonfire…
What is quite remarkable is that franchise holders, private companies all, enjoy less commercial freedom than BR ever did, so prescriptive and micro-managed by DfT is the current form of franchising. One result of this is that competition for franchises is dwindling: DfT’s stated ideal is that four companies should be short-listed: in fact, frequently, no more than two are even applying these days.
MTR is not exactly new to UK rail transport: they ran the London Overground from 2007 to 2016 in a joint venture with Laing.
The silver service is still serving a passable Chablis and meal cooked by a chef to order, on the 1803 and 1903 out of Paddington to Taunton, Exeter, and places Westward. I take advantage of it frequently and I would urge you all to do so while it still exists.
I would give it up if it were in exchange for the renationalisation of our Railways: we are now the textbook study of the inefficiency of markets and of private-sector rent-seeking in a vital infrastructure which is best run as a service rather than a profit centre.
The study, that is, in advanced countries where the dismal science of economics has some foundation in econometrics, rather than in dogma that would embarass a mediaeval cardinal or a soviet commissar.
I have to laugh at the preposterously cramped and smoky ‘Turd O Stars’ and ‘Uber Voyagers’ going through my local mainline station. If this is ‘investment’ you can keep it.
You only have to see a BR conceived and built HST (Class 43 set) set come in and see just how superior it is to the high speed flat pack trains that they use today to know what we have lost in the rail industry.
Woeful.
We need to name and to question the liberalisation dogma.
The City insists on K ‘liberalisation’ as a global model, because they want global financial services access(its all about investment). And our governments do what the City says.
As someone who lives in Hong Kong, it’s not accurate to describe the MTR Corporation as a Chinese state company. The Hong Kong SAR government (which is not the same as the hovernment in Beijing
Not all of us believe that Ralph
And with good reason
…but it has other shareholders. It is not an SOE，or state-owned enterprise，which denotes government-owned companies north of the border.
Richard, there are plenty of incidents that show China has not respected, and is not respecting, what it signed up to in the Basic Law at the time of the handover in 1997 – that it would not interfere in Hong Kong affairs before 2047 – but they are political or legal. I don’t know of one that involved the running of the MTR Corporation.
Soft power is about more than overt control