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October 31, 2008

‘Passengers prefer people to machines when buying tickets’

rail professional 9: november 2008
by Paul Clifton

Most rail passengers prefer to queue at ticket offices rather than buying their fare from a machine.

Research by Passenger Focus and South West Trains shows that nine out of 10 passengers waiting in line at stations were aware that ticket machines were available but chose not to use them. And eight out of 10 passengers in the queue had used machines in the past.

Train operators are investing heavily in ticket machines and the Passenger Focus research attempts to find out why they remain unpopular with many users.

Sixteen per cent of passengers said they ‘needed to speak to somebody’ and 9 per cent ‘just preferred a ticket office’. Only seven per cent said they were unsure about, or had difficulty using, a vending machine.

Passenger Focus concludes that older passengers are less inclined to use machines, and that the conscious decision to wait for a face-to-face transaction instead is driven by a lack of confidence in using the machine to select the right ticket at the best price.

The research comes as SWT expands a facility to pay for fares in advance and collect tickets on arrival at the station – a system familiar to cinema-goers. Customers put their credit card into any machine, along with a reference number, to collect their ticket.

‘For the first time more people are buying tickets from machines than at a ticket office,’ says Ian Johnston, SWT’s customer services director. ‘Forty-seven per cent of tickets are now sold from vending machines, compared with 44 per cent at ticket offices. Six per cent are sold on trains and the remaining three per cent are bought online or over the phone.’

SWT is trying to drive more passengers towards ticket machines after announcing plans to close more than half its station ticket offices for all or part of the weekend.

‘Eighteen months ago, 18 per cent of our tickets were sold onboard the train,’ says Johnston. ‘That has now fallen to six per cent.’

The technology is already used by other operators, including sister Stagecoach company East Midlands Trains, National Express East Coast and Virgin. It’s SWT’s scale as a commuter railway with more than 1,700 services a day that makes the shift significant.

Passenger Focus argues strongly that there remains a need for manned ticket offices. People clearly prefer talking to other people rather than tapping computer screens. And they’re prepared to queue to do so.

German minister under fire over rail bonus row

Reuters: Oct 31, 2008
By Dave Graham

BERLIN - The German government on Friday defended Transport Minister Wolfgang Tiefensee against calls he resign because of his role in a row over bonus payments linked to the planned listing of national rail operator Deutsche Bahn.

Excessive executive pay has become a sensitive subject during the global financial crisis and many European leaders, including Chancellor Angela Merkel, have called for restraint.

Tiefensee has come under pressure since newspapers reported a week ago that the board of Deutsche Bahn was set to receive hefty bonuses for the hotly disputed partial privatisation of the firm, which was postponed this month due to market turmoil.

Merkel's chief spokesman, Ulrich Wilhelm, backed Tiefensee, who opposition politicians said should resign for his handling of the bonus affair.

"The Transport Minister still has the confidence of the Chancellor," Wilhelm said at a news conference dominated by 45 minutes of questions on Tiefensee, a member of the Social Democrats (SPD) who share power with Merkel's conservatives.

The Sueddeutsche Zeitung reported that Deutsche Bahn chief executive Hartmut Mehdorn stood to gain up to 1.4 million euros ($1.8 million) for the market listing, and that other board members could also reap millions, depending on its success.

Tiefensee on Wednesday fired junior transport minister Matthias von Randow, saying he had approved the payments without his permission, and urged Mehdorn to waive the perquisites.

Fritz Kuhn, parliamentary floor leader of the Greens in parliament, said Tiefensee had either known about the bonus scheme longer than he had admitted, or had failed to take proper charge of the listing that had been planned for Oct. 27.

"Tiefensee must resign," Kuhn said in a statement.

Tiefensee's spokesman Rainer Lingenthal told reporters at a regular government news conference the minister had known about the payments since mid-September.

Asked why it had taken Tiefensee so long to dismiss Randow, Lingenthal said the minister had not wanted to spark another public debate ahead of the listing, which was only given the green light after months of political wrangling.

The listing of Europe's biggest rail firm, which market analysts initially thought might raise up to 8 billion euros, was put on hold earlier this month due to market volatility.

Earlier on Friday, the company reported that revenues and profits rose by around 10 percent over the first nine months. Deutsche Bahn also said by the end of September, it had cut its debt by 1 billion euros to 15.5 billion euros.

'We are very modest'

Railway Gazette International: 31 Oct 2008
Nick Kingsley
CZECH REPUBLIC: Meeting the requirements of EU legislation whilst continuing to develop passenger and freight operations across the Czech Republic is a tough task. Nick Kingsley met Vojtech Kocourek, Minister with responsibility for railways, in Praha to discuss railway restructuring, the future of regional lines and relations with Brussels.

What is the financial position of the Czech railways in terms of profitability and subsidy profile?

The present position needs to be understood in the context of two organisations: infrastructure manager SZDC, which is funded via track access charges and from the state budget, and CD, the joint stock company that operates passenger and freight services.

At CD, for the first time since the start of the railway restructuring process in 1997, we have achieved a positive financial result for the year to January 2008. The business recorded an overall operating profit of KC53m, but the problem is that we have an imbalance in the financial performance between the different divisions.

For example, freight transport is largely responsible for the positive result, but the passenger business still needs significant public subsidy to operate services deemed to be socially necessary. In this financial year, we expect that the central government will contribute around KC4·5bn to fund these, with a further KC3·5bn coming from the regions.

The other basic problem facing CD is that it has a large amount of essentially obsolete rolling stock. We are trying to overcome this through an extensive refurbishment programme, which will continue through to 2020. We are also keen to develop a strategy beyond then; because investment in vehicles was neglected for so many decades, the problems cannot be rectified in just four or five years. In the medium term, we intend to purchase more Class 814/914 Regionova DMUs and Class 471 'CityElefant' EMUs for Praha suburban services.

How is the project to restructure CD into a holding company progressing? When will the passenger operation be established as a stand-alone business?

Allow me to modify slightly this question to clarify how we have structured the industry. We have separated out the infrastructure manager as a totally independent arm of the state. We are therefore one of few EU member states to guarantee totally free, independent and undiscriminatory access to the network. Within that framework, CD is just one of several operators to use it. Under the final phase of the restructuring we intend to establish CD as a holding company.

To enable this to take place, CD Cargo was restructured as an independent freight operator on December 1 2007. On my desk we have the documentation preparing the separation of CD's passenger operations, which will be presented to parliament for final approval later this year. At the present time, the state remains the sole shareholder in the CD passenger business, but that could change in the future depending on the government approving the restructuring programme. The government has insisted that we must not make any changes to the structure of CD that would preclude the entry of private capital into the group at some later date.

What is the future for regional and rural rail services in the Czech Republic? Are there any plans to offer concessions to new operators, as has happened in Poland, or to reduce these services, as is happening in Hungary?

To be frank, regional services are one big problem. But it is not just a problem for us in the Czech Republic, there are many countries — some with more developed economies than ourselves — facing the same challenge of how best to support and manage regional and rural railways, and they haven't found the right answer yet either.

We realise that any measures must be carefully thought through, not least because any measures to reduce regional services could prove to be a mistake in the longer term. So we are investigating how best to manage the operations and the infrastructure, and in particular how to find an appropriate signalling system for lightly-used lines. But of course, the other priority is to bring customers back to our regional railways.

It is quite an intricate task, because these local services are specified and funded by the regional authorities, of which there are 13 in the Czech Republic, and this can complicate matters! Each region has different requirements in terms of the size of the local network and the desired service pattern, and we are searching for ways to move all the current regional services onto a viable long-term financial footing. But we must be aware that we can only bear those costs that are absolutely necessary, and finding the optimum balance between service provision and financial sustainability is a long-term process. Unfortunately, many of our local railways are in much the same state as they were 100 years ago, so some modernisation is clearly essential.

One possible option would be to reduce the access charges for lightly-used branches where there is less hardware to maintain and operating costs are lower, but at present we are still assessing the economic impact of such measures. In general, we are optimistic about the future of our regional railways but, as has been the case in some other countries, we cannot rule out taking some difficult decisions in future.

How are discussions progressing over the proposed merger of CD Cargo and ZSSK Cargo? What benefits does the Ministry expect to see from such an alliance?

It is true that such a move is under discussion, and to me the benefits seem quite clear. It would create a significant player at a European level, perhaps the third largest freight carrier after DB Schenker and PKP Cargo. There are other clear advantages — the two companies would share similar rolling stock, a similar language and, to some extent, a common history. In addition, the two countries' geographical location in the centre of Europe is another benefit, particularly with regard to growing opportunities in the east-west transit market.

Does the Ministry anticipate a large increase in open-access freight operation as part of the market liberalisation process?

Today, we have a fully-liberalised market, there are no obstacles facing operators wishing to start services, and already there are several foreign operators, such as DB Schenker, using our infrastructure. We are trying to respect the wishes of our partners in the CEE region regarding market opening, but I would compare the situation to my office door: if there is a handle on the outside but none on the inside, then the process will not work. We must be able to open the door from both sides.

It is also possible that totally new operators from abroad could launch services in the Czech Republic, just as Freightliner of the UK has done in Poland, but to us it is irrelevant who the operator is or where it comes from. I expect more new entrants to emerge, as already we have domestic freight services provided by open-access players like OKD Doprava, for example. They will all enjoy the same access rights to the network — this principle does not differ whether the operator is Peter or Paul!

Is the Ministry satisfied that enough assistance from the EU is available to allow it to meet its objectives under the Railway Packages? What more could the EU do to assist the railway industry in eastern Europe to make financial reforms and to meet interoperability standards, including the implementation of ERTMS?

I want to be very modest. The Czech government was an especially active participant in the negotiations in Brussels that created the railway directives and enshrined the liberalisation process in law. We implemented all the elements of these directives — on interoperability, market opening, financial reform — well in advance of the deadlines imposed. Indeed, we are further advanced in the implementation of the next round of policy directives than some older members of the EU. If anything, we are advising them on how to overcome the challenges of implementation, although I emphasise that we are trying to be modest about our achievements.

Perhaps this is surprising, but at present we do not see any serious challenges in funding the investment required to implement the directives — even if fitting ERTMS-related hardware for example is not cheap. We have adhered to the timescales of the process and, in the case of ERTMS, it is a progressive roll-out of technology along the EU's selected corridors. Corridor E from Dresden to Wien and Budapest, the only one to pass through the Czech Republic, was originally intended to be among the last interoperability projects to launch.

However, that has now changed, as the five member states involved have moved to accelerate the process by signing the common Letter of Intent sooner than originally envisaged. Corridor E has now moved up the list of priorities, and consequently we have received funding from Brussels to allow planning work to commence — it is now an active project.

But the most integral and yet least certain element of the interoperability programme is the ERTMS concept itself — as it stands today, we cannot imagine what the finished version of ERTMS will look like. Nevertheless, the backbone of the Czech network will be equipped with it eventually, although, to return to an earlier topic, it is open to question whether it would be cost-effective to equip all our regional lines as well.

Vojtech Kocourek was appointed Deputy Minister of Transport in 2002. He is responsible for overall public transport provision, and has specific responsibility for rail. He also acts as the Chairman of the Supervisory Board of CD, and is a member of the Scientific Board of Jan Perner University. He graduated from Brno University of Technology's Faculty of Civil Engineering in 1983, and finished his doctoral studies at Jan Perner University in 2004. His professional career began with CD in Brno in 1983, where he worked as a Transport Engineer and then as Deputy Operations Director. From 1991 to 1996 he was Executive Director at Sežev Reko Ltd, and between 1996 and 2003 he was Director General and Chairman of the Board at KPM Consult.

ETCS Level 2 goes live next year

With 455 route-km of European Corridor E within its borders, Czech infrastructure manager SZDC and the Ministry of Transport have initiated a project to introduce ETCS Level 2 over a 22 km double-track section of the Praha – Brno main line.

The project to agree the scope and technical specifications ?of the pilot began in 2005, and focused on the specific requirements of integrating ETCS equipment into existing interlockings and telecoms systems on the route. Having agreed that the trial would use version 2.3.0, a second stage was implemented in 2006 to procure components and install the hardware along the trial section from Porícany to Kolín as well as equipping the main test ring at Velim, which is located close to the main trial section.

This stage of the project is now complete, and the Radio Block Centre to manage the test section has been activated. On-board equipment has been fitted to a Class 151 and a Class 362 electric locomotive, and to a Class 471 multiple-unit. Software tests are now underway on both the test section and at Velim; these are scheduled to last until March 2009, after which approval for operations to begin is expected to be granted.

Bus and rail group benefits in crunch times

Financial Times: October 30 2008
By Stanley Pignal and Amanda Vermeulen

Stagecoach, a bus and rail company with operations in the UK and US, is the latest group to benefit from the resilient public transport sector.

The Aberdeen-based company yesterday said in a trading update that its performance was in line with management expectations, echoing recent announcements from competitors Arriva, National Express and Go-Ahead.

On a like-for-like basis, Stagecoach said its UK bus revenues increased 9.2 per cent compared with the same period last year. In North America, Megabus was 8.4 per cent higher in the five months to the end of September. The budget bus company, which was launched two years ago with $1 (60p) fares, carries 150,000 passengers each month. Earlier this week it said it was expanding again, adding four new routes to bring the number of cities served in the US and Canada to 11.

Stagecoach has attributed the growth in the popularity of Megabus to growing financial pressure on consumers, forcing travellers to opt for the bus rather than more expensive personal vehicles, trains or air travel.

In the UK rail operation of Stagecoach, revenues were up 8.3 per cent, in spite of the loss of the Reading to Brighton train service, which was transferred to another operator from South Western Trains. The company said that this had reduced the reported growth rate by about 1 per cent.

An analyst from Panmure Gordon said it was pleasing that South West trains, a London-focused commuter franchise that comprises about a quarter of Stagecoach's operating profit, was holding up well. "This is in line with recent comments by Go-Ahead and National Express suggesting that revenue growth remains solid."

Stagecoach noted, however, that there had been some slowing in the growth in recent quarters, which it attributed partly to lower employment levels in the City of London.

Stagecoach did not include the revenue earned by the East Midlands Trains franchise, which it won in November last year. In the 24 weeks to October 12, revenue from East Midlands Trains was 14.2 per cent higher than under its former owners in the comparable period. Revenue growth from VirginTrains, in which Stagecoach has a 49 per cent shareholding, was static, coming in at less than 1 per cent. Its performance has been hampered by infrastructure works on the line, but it will receive compensation for the disruption.

Stagecoach management, led by Brian Souter, chief executive. has indicated that it will take measures to stave off any impact from declining economic growth. "[We] will continue to review the cost base of the rail businesses and will implement cost saving if and when appropriate," it said.

Stagecoach shares opened in positive territory but closed down 7 per cent at 190½p.

SNCF defies its future competitors in high speed rail

Reuters: 30/10/2008

SNCF warned its future competitors in the high-speed rail they will face a motivated group determined to remain European number one in this strategic sector.
SNCF president, Guillaume Pépy. SNCF warned its future competitors in the high-speed rail they will face a motivated group determined to remain European number one in this strategic sector. / Photo Archive / REUTERS / Benoit Tessier

"The arrival of competition is an opportunity for SNCF. But I also want to prevent new entrants as we are preparing, we have brands, know-how and our ambition remains intact," said Guillaume Pépy its president at the 17th World Air Transport Forum held this year in Paris.

The boss was speaking at a conference on "Will operators run trains or planes?"

Air France-KLM announced earlier this year a study of the feasibility of a market position for high-speed rail, possibly to better link its hubs from Roissy and Schiphol, Amsterdam.

"One cannot improvise an airline. And I think it cannot improvise a high speed railway even when it is number one in global air transport," said Guillaume Pépy contrary to the Franco-Dutch company’s statements.

"Only appearances are similar, especially in the 'yield management' (management capabilities). The customer operations, business models, investment and jobs are fundamentally different", he added.


The European Union is preparing to open up international high speed rail transport from 2010, with a possible liberalization of domestic routes from 2012 or 2013. The exact contours of this initiative remain to be clarified.

This evolution of the regulatory framework nevertheless is raising many interests - several industry groups have expressed their desire to embark on the adventure - and represents a major revolution for Deutsche Bahn and SNCF, which are historic railway operators.

The French public has been the pioneer of high-speed Europe with the Paris-Lyon line opened on 27 September 1981.

The service met with immediate success and relaunched SNCF traffic. Its TGV expertise is now known worldwide.

Reduced market share, in 2007 the company held 53% of high-speed routes in Europe.

Air France-KLM, subject to strong competition from TGV in France and that of other operators like Eurostar and Thalys on some short international destinations such as Paris-Brussels and Paris and London, seems thus far, the most serious competitor for SNCF. The company is working with Veolia Transportation, a subsidiary of Veolia Environnement, to develop a strategic partnership.

However, the French electricity group Poweo is also considering an alliance with another group to take advantage of liberalisation and Guillaume Pépy felt that other companies could come forward.

"I would not be surprised if Bouygues or Bolloré wish to join us, speed is a profitable business," he pointed out.

Eager to prepare for the future, the SNCF is poised to take 20% of the Italian railway company private NTV and has indicated repeatedly that it intends to strengthen capital operators specializing in Europe high-speed.

"I warned my team that one day we could see Veolia, Air France, Poweo or others in our stations. We clearly want to keep a market share exceeding 50% in the coming years and I can tell you that our teams want to get on with it," said Guillaume Pépy.

If deregulation of European rail market raises hackles, it is also accused by many critics, who regularly cite as an example the failure of privatisation of the railways in Britain in 1993.

See also:

G. Pépy: "We cannot be an improvised railway operator"

Le Figaro:30/10/2008
Thierry Vigoroux

The SNCF chairman on Thursday demonstrated the complexity of the system to airlines that want to run TGVs.

SNCF is not scared of competition from new rail operators. "It will bring more passengers and hence more opportunities for SNCF," said chairman Guillaume Pepy, speaking on Thursday at the World Air Transport Forum in Paris. But he warned companies that want to use TGV networks, which will be possible from 2010. "It can not happen," he insisted.

The SNCF president, during his presentation, highlighted the many differences between air and rail transport. The latter requires considerable know-how in particular to drive a 400-tons, 200 metres-long train faster than 300 km/h. "The only contact with the rail surface comparable to the size of three metro tickets," says Guillaume Pepy, who also raised the current bogeyman of the railway, "these overhead electricity lines fall more often than airplanes."

The TGV economic model is also very different from the plane. The smallest train contains 430 seats. It is the same capacity of a Boeing 747, which was the largest transport aircraft before the Airbus A380. It is a mass market with a low average price of €50 per passenger and a 77% load factor. A TGV Duplex costs 25 million and is paid for over 40 years, which costs the business €50 000. An Airbus A320, has a lifespan of 25 years and costs the business €400 000.

Nevertheless, Guillaume Pépy mentions he expects several international operators, such as Air France with Veolia, Poweo, etc. Consolidation will probably occur within a few years. In Italy, investors have put up a billion euros to create NTV. This new high-speed operator has appealed to SNCF to operate twenty trains ordered from Alstom. For newcomers who want to start from a blank sheet of paper, the SNCF chairman wishes them "good luck".

European rail freight is in search of funding

The Tribune: 31/10/2008

French presidency of the European Union: The financing of rail freight in Europe and the lack of integration of networks were at the heart of discussions at the first European Rail Forum 'Freight without Frontiers', held in Paris on October 29.

"We must develop sustainable transport, less polluting and using less energy." At the opening of the first European Rail Forum 'Freight without Frontiers' on October 29, Secretary of State for Transport, Dominique Bussereau recalled the importance of rail freight in relation to requirements for reducing carbon emissions. "Rail freight has major advantages and the French authorities do not want to soft pedal on investment in this area," he added. A useful clarification: the high cost of upgrading networks makes it difficult for operators to move beyond strong public support.

On the morning of the European Rail Forum, the daily newspaper Liberation revealed that the next performance contract 2008-2012 signed between the State and RFF [Réseau Ferré de France - French Network Rail] plans to allocate over 13 billion euros for renovation and modernization of the French railway network.

The commitment of the French state to upgrade a network that is in poor condition is fulfilling the expectations of RFF. And that's understandable, because the company is supporting a public debt of almost 28 billion euros, linked to part of its split with SNCF in 1997. However, as Hubert du Mesnil, President of RFF recalled "freight must increase its market share of 25% by 2012", including to address the environmental crisis.

At long last, rail freight players are facing an integrated and competitive European market. Currently, with the exception of Germany, national freight markets remain for now heavily dominated by incumbents - in France, SNCF owns 93% of the market. If the operators of countries that have anticipated liberalization are more equipped to deal with a European market, it remains largely virtual and numerous obstacles remain.

Without a truly integrated network, network managers rely for now on a system of cross-border corridors, which is an operational response on some lines. Within the EU, six corridors are currently in operation. And the European Commission is proposing the creation of at least one international freight-oriented corridor in each member state by 2012.

According to Laurens Jan Brinkhorst, coordinator at the European Commission, "the priority for improving the performance of corridors is to improve cooperation between Member States in infrastructure. This requires a better operational culture, less exclusive national authorities and more listening to market players."

In the end, most participants at the "Freight without Frontiers” Forum judged that the emergence of a European freight market would occur through major improvements in interoperability (signalling, mutual recognition ... ), better cooperation between national players and regulatory harmonization. For this reason, France will prepare by the end of the year a regulator for the railway sector, in accordance with the 2007 European directive.


Johannes Ludewig, executive director of the Community of European Railways (CER), which groups European railway companies and network operators, has also stressed the funding needs of the sector. Considering European investment needs more than 150 billion euros by 2020, Mr. Ludewig hammered on that "governments must take charge of developments in the railway industry" and at the same time denounced "financing problems and price distortions: the public believe in general that the costs of rail transport are low but they are high. "

Michael Cramer, MEP (Greens), stresses that European rail freight suffers from unfair competition with other means of transport, especially road transport. According to the MEP, "rail freight is environmentally friendly but it remains expensive compared to the road. We must revise the European directive on the 'eurovignette’ so that the regulatory framework for transport is more equitable"

Gilles Savary, French MEP (Party of European Socialists), regrets "the modest adjustment to rail freight liberalisation” in Europe and calls for "development of a European Railways culture to promote alternative modes of transport to the road."

See also:

Rail freight: RFF picks up the gauntlet

RFF [French Network Rail] Report:


Transporting goods by rail, which offers a sustainable and now crucial alternative to road transport, is stimulating public opinion more than ever before and attracting an increasing amount of interest from the public authorities. But France, whose rail freight levels have significantly decreased over the past thirty years, continues to lag behind. This decline, however, is by no means inevitable, and the RFF has made its ambitions clear by proposing concrete measures to give French rail freight operations a new lease of life. Here’s how.

The advantages of rail
In comparison with road, air and water transport solutions, rail transport is the sustainable development champion. More economical, safer and, above all, more environmentally-friendly, rail certainly has plenty going for it. It contributes to urban development, uses less energy and takes up less space, generates far less pollution and emits very few greenhouse gases. That may be true for passenger transport, but it is truer still for freight transport. Offering a high-performance alternative to road transport, rail freight transport is the only transport solution capable of adapting to increasing industrial needs whilst remaining acceptable on both an environmental and social level.

The decline in rail freight levels
There’s just one problem – French rail freight transport is in a rather sorry state. Between 1995 and 2005, traffic levels, measured in tonnes-kilometres, decreased by over 15% (Eurostat). From 2000 to 2005, that decline accelerated with a drop of 26% (Eurostat). The reasons? The persistent supremacy of road transport; a production tool that has proved incapable of adapting to changing needs; a rail service that is out of sync with the scale of modern-day requirements… It has to be said that France isn’t the only European country to be experiencing such problems, although several of our neighbours are nonetheless doing far better. Take Great Britain, for example, where rail freight traffic rose by over 80% between 1995 and 2005. Other prime examples would be the Netherlands (+62.1%), Austria (+44%), Germany (+37.3%) and Sweden (+12.34%).

The RFF’s goals and objectives
At a time when rail is well and truly in the spotlight of public opinion and being scrutinized by the public authorities, our European neighbours are proving that a decline in rail freight transport is by no means inevitable. As the developer and manager of some of France’s public infrastructures, Réseau Ferré de France is keen to boost rail freight’s chances of success. The objectives couldn’t be more clear: create conditions that will foster a sustainable increase in traffic; make a success of the opening-up to competition that was launched in 2006; have over ten rail companies using the network by the year 2010. The RFF intends to adopt a three-pronged strategy in order to make this happen: optimise the use of the network; provide operators with new services; and facilitate their access to the network whilst minimizing pollution.

Eight concrete measures for a new lease of life
In practice, the approach will consist of 8 concrete measures that the company proposed at France’s Environment Round Table, the Grenelle de l’Environnement, certain of which have already been launched.

• Improve the train path offering
• Provide all operators with easier access to the network
• Develop rolling motorways and high-speed freight
• Provide seamless freight solutions by interlinking ports and the rail network
• Foster the development of local freight services
• Create a green usage charge for freight
• Promote interoperability along the major European corridors
• Step-up research to minimize freight-related pollution.

Baghdad commuter rail skirts traffic, checkpoints

AP: 31-10-08
BAGHDAD — Baghdad commuters have a new way to bypass the city's checkpoints and congested, dusty streets with the launch of a commuter rail that travels 15 miles through Sunni and Shiite neighborhoods in the heart of the capital.

The new service, which began Wednesday and costs the equivalent of 80 cents, comes as public irritation is mounting over traffic congestion — a result of better security but also caused by numerous police checkpoints that help stop bombers but also slow down cars and trucks.

"We have launched this train to ease congestion and traffic jams on Baghdad's streets," said Abdul-Ameer Hamoud, the director of central transport. "The arrival of a passenger by train is faster than by car to and from the center of Baghdad."

Associated Press - Baghdad commuters have a new way to bypass the city's checkpoints and congested, dusty streets with the launch of a commuter rail that travels 15 miles through Sunni and Shiite neighborhoods in the heart of the capital.

Starting in the morning, the commuter train pulls out of the Baghdad's blue-domed main station and runs north to the mostly Shiite neighborhood of Kazimiyah, then cuts down through central Baghdad to the mainly Sunni suburb of Yousifiyah in the south. It makes a handful of stops.

Still, transport officials say they are unsure just how popular the new service will be as Iraqis adjust to the idea of rail travel in Baghdad, and it may face an uphill struggle in winning passengers.

AP Television News footage showed only a small number of people riding the train Thursday morning.

At the moment, the only major rail line in the country runs from Baghdad to the southern city of Basra.

Last September, rail officials put Saddam Hussein's private luxury train — complete with chandeliers and Italian-made curtains — into public service to help ease Iraq's train shortage.

October 30, 2008

Minister backs electric rail routes

Financial Times: October 30 2008
By Robert Wright, Transport Correspondent

Geoff Hoon, newly-appointed transport secretary, yesterday threw his weight behind rail electrification and a potential network of high-speed lines - barely 15 months after his predecessor largely ruled out both options in a white paper on the railway industry, writes Robert Wright .

On the day he announced a National Networks Strategy Group to advise on the development of UK infrastructure, Mr Hoon told the Financial Times: "I want us to be getting on with things like electrification . . . I think we have to have a discussion about high-speed rail links."

Mr Hoon stressed that the new group - to be chaired by Lord Adonis, minister of state at the Department for Transport - would not only be looking at rail projects. It would also look at improving road capacity.

However, the rail aspects will attract most attention because they contradict the stance of July 2007's white paper. Published under Ruth Kelly, Mr Hoon's predecessor, the document said a decision on new, high-speed rail lines could wait for another 15 years.

The white paper also largely rejected the case for further rail electrification, saying modern diesel trains remained a good option for most currently unelectrified routes. The UK's last big route electrification was completed in 1991 - pre-rail privatisation - on the East Coast Main Line from London to Edinburgh.

Figures regarding how much Network Rail, owner of the national network, can spend between 2009 and 2014 will be published today, with a ruling by the Office of Rail Regulation. Network Rail's funding will not include money for any electrification or high-speed rail.

However, there were still ways that work on electrification could be funded, Mr Hoon suggested. He looks likely to argue that some of the work would fund itself through savings on train maintenance and extra efficiency.

"I've seen some of the early work on electrification," Mr Hoon said. "I see nothing in that work that suggests to me we can't move ahead quite quickly."

Electrification would also help the environment, Mr Hoon added. "The time is obviously right, for environmental and other reasons, to give that a push," he said.

It would take longer to plan and build high-speed and other new rail routes, he added. However, he rejected the idea put forward by the Conservative party at its conference this year that a high-speed rail line from London to Manchester and Leeds could remove the need for a third runway at London's Heathrow airport.

"It's complete and utter nonsense," he said. "You only have to look at the needs. For example, their figures are based on substituting something like 60,000 flights. There are only 13,000 flights from London to Manchester and Leeds every year."

RMT condemns ‘wholly inadequate’ Network Rail funding

RMT: October 30 2008

BRITAIN’S BIGGEST rail union RMT warned today that the Office for Rail Regulation announcement on Network Rail funding is wholly inadequate for the needs of the system over the next five years.

“The £26.7 billion package ordered by the ORR represents a £2.4 billion shortfall on the £29.1 billion requested by Network Rail – a massive funding gap which can only hamper proposals to enhance the system,” said RMT general secretary Bob Crow.

“Following 30 per cent ‘efficiency savings’ for the period 2003-08 Network Rail must now implement an extra 21 per cent, combining to make a colossal 51 per cent over 10 years.

“After the government found billions to bail out the bankers we might have expected something of the same for our beleaguered rail system. They are quite clearly trying to fit a pint of beer in a half pint pot.

“RMT will resist any resulting job losses and any cuts which might compromise rail safety. We will not be pushed back into a situation where another Hatfield, Paddington, Potters Bar or Grayrigg tragedy occurs.

“That the ORR thinks it possible to develop the railways over the next five years on such a budget, amid projected increases in demand for passengers and freight, defies belief.

“The environment and economy are crying out for large-scale enhancements to the system such as the implementation of high-speed lines and the replacement of the remaining diesel-powered engines with electrification. Today’s announcement risks undermining these, as well as countless smaller-scale proposals, before they even reach the planning stage.

“Network Rail will attempt to make up the shortfall by piling pressure on a workforce which is already working excessively long hours, increasing concerns over health and safety at work.

“This is especially worrying in the wake of last week’s Rail Accident Investigation Branch report into the Grayrigg derailment, which blamed a lack of resources and imposition of unrealistic workloads for the tragedy.”


Network Rail heads for funding standoff

Financial Times: October 30 2008
By Robert Wright, Transport Correspondent

A stand-off could be looming between the owner of Britain’s rail network and its regulator after the Office of Rail Regulation ruled that future funding would be less than Network Rail demanded.

In findings published on Thursday, the ORR ruled that Network Rail would have a total budget of £28.5bn for the five years starting in April next year. Of the income, £26.7bn would come from government subsidies, train operators and freight companies, and the rest from other sources such as property rents.

The £26.7bn is only £200m more than ORR outlined in its draft figures in June, which the infrastructure company said was “insufficient”, and £2.4bn less than Network Rail had demanded.

The ORR requires Network Rail to improve the efficiency of its core business – operating, maintaining and renewing the railway – by 21 per cent by March 2014 compared with the present financial year. However, the regulator has postponed some improvements until the end of the five-year period in response to Network Rail’s misgivings.

In return for the funding, Network Rail will have to improve significantly train punctuality and reliability for both passenger and freight trains and undertake £7.74bn of investment in projects to improve the railway’s capacity.

The largest project will be the first phase of the cross-London Thameslink project. The company will spend £2.75bn during the period connecting the route to the London-Glasgow East Coast Main Line near Kings Cross.

Paul Plummer, Network Rail’s director of planning and regulation, said continued high levels of investment in the network were welcome. But the company would have to be sure the targets and investment levies set out by the ORR were both achievable and adequate to meet the growing demands placed on the network.

"We will now take away today's determination and carefully study and consider the implications it will have on both passengers and freight users and on the industry as a whole,” he said.

Bill Emery, ORR’s chief executive, said the ruling provided the funding necessary for Network Rail to meet its targets.

Network Rail has until February to decide whether to accept the findings. It can appeal to the competition commission but looks unlikely to do so because of the delay such a move would cause in settling its funding.

See also:

What a hypocritical way to run Britain's railways

The Independent: 31 October 2008

The Government is still failing to invest on the necessary scale

There is an air of unreality about the demands that the Rail Regulator has laid out for Network Rail over the next five years. The regulator is demanding that Network Rail improve punctuality and deliver major new infrastructure projects. The question that springs to mind on reading this ambitious list is: what will happen if Network Rail fails to deliver? The precedents are not encouraging.

Rail passengers will recall the terrible disruption last New Year, when there were major engineering overruns in Glasgow, Rugby and London. Tens of thousands of travellers were inconvenienced. Network Rail was fined a record £14m by the rail regulator. But because Network Rail is a publicly-owned company, with no private shareholders, the fine was merely picked up by taxpayers, many of whom had suffered from the disruption in the first place.

But this is merely one aspect of the madness of railway economics in Britain. More people are using the railways than at any time since 1945. The result is overcrowding on several major routes. And yet the response of the train operators has not been to put on more trains, but to increase fares. We have an industry that rewards its customers by making their travel experience more miserable and charging them extra for it.

So what is to be done? There are two major problems with Britain's railway system that need to be distinguished. The first is the incompetence of Network Rail and several of the private train operating companies. This is not a funding issue, but a management one. If money is an issue, it lies in the fact that the managers are presently rewarded for failure. Three Network Rail directors received bonuses of £200,000 this year, despite the New Year overruns debacle. The Government needs to look again at those charged with delivering our rail services. Incentive schemes which end up rewarding incompetence must be torn up.

But there is a second, larger, problem and that is the Government's stubborn refusal to invest in the rail network on the scale necessary to deliver an efficient, modern transport system. The stewards of our rail system are often incompetent, but the blame for the often appalling condition of our rail services must be shared with ministers who have been quietly allowing the public subsidy to dwindle.

Unveiling the Government's five-year rail plan last year, the then Transport Secretary, Ruth Kelly, rejected greater electrification of the network and more high-speed rail as "too expensive". The hypocrisy and short-sightedness of this is immense. The Government is pushing ambitious targets for cutting greenhouse emissions through the House of Commons, and yet it is squeezing rail (the greenest form of public transport) and lavishing favours on the airline industry. Ministers are demanding that individuals reduce their carbon footprint, and yet they preside over a transport system in which it is cheaper to fly between London and Glasgow than it is to take the train.

There are signs that this might be changing. The new Transport Secretary, Geoff Hoon, this week promised to review the case for high-speed rail lines. And the Conservatives' endorsement of a new high-speed North-South rail line confirms which way the political wind is blowing.

But the proof will be in the delivery. Passengers, long squeezed between the incompetence of railway managers and the hypocrisy of ministers, will believe in the new strategy when they see it being put into effect.

Network Rail rebuffed on lavatory levy

Daily Telegraph: 30 Oct 2008
By David Millward, Transport Editor

Rail bosses want to impose a £7.2 million “lavatory levy” to cover the cost of clearing effluent off the lines.

Network Rail said it needed to charge operators for the damage done to the country’s track by the toilet waste which is being dumped on it from passing trains.

Its plea for the cash formed part of the negotiations with the Office of Rail Regulation over the money which the company said it needed to implement a raft of improvements by 2014.

But this has been turned down by the ORR.

Network Rail, which is responsible for maintaining the country’s track, said that toilet waste was corrosive and toxic.

“We asked for this money to cover the extra cost of clearing the muck from our tracks. It is not only unsightly but also over a period of time can damage the lines and components,” said a Network Rail.

“At the moment we need high powered jets and chemicals to clean the mess and this is a very expensive process.”

While modern carriages are fitted with effluent tanks which are emptied safely at the depot, the same is not true of older rolling stock, such as on the refurbished InterCity 125s.

However Network Rail’s plea for the cash triggered prolonged haggling with train operators.

There was a dispute over how many carriages could be held responsible for causing the damage and how much it would cost to repair.

Eventually the ORR said that the infrastructure company had “not convincingly demonstrated that it would incur additional costs”.

The ORR has also told Network Rail that it should carry out the raft of improvements it has promised between 2009-14 for £26.7 billion, £2.4 billion less than the company had asked for.

Already, as a result, a swathe of projects affecting millions of passengers have been ditched.

They include extra capacity on key commuter lines, such as that between Didcot and Oxford, extra carriages on some services into Liverpool Street and projects to ease bottlenecks near Swindon, Redhill and Crewe.

Other proposed upgrades could also be at risk as a result of the Office of Rail Regulation’s demand for significant “efficiency savings”.

Despite the cash gap, some schemes will definitely go ahead. Those which are safe include work to ease bottlenecks around London Bridge, rebuilding Birmingham New Street station and providing extra capacity on the east coast main line.

In addition the ORR has demanded a 20 per cent drop in the number of late and cancelled trains.

The ORR’s decision has also ordered Network Rail to improve its efficiency by 21 per cent, eight per cent more than that offered by the infrastructure company.

Theresa Villiers, the Tory transport spokesman backed the regulator.

“Network Rail needs to up its game on efficiency and value for money if it is going to deliver the new capacity that passengers are crying out for,” she said.

“The regulator needs to be tough on Network Rail to ensure that the interests of passengers are protected.”

“But Labour must also deliver on the promises it has made on tackling chronic levels of overcrowding on the rail network - a problem they have been far too slow to wake up to.”

RMT to ballot over unjust dismissals at National Express East Anglia

RMT: October 29 2008

BRITAIN’S BIGGEST rail union RMT begins balloting for strike action at National Express East Anglia today (Wednesday) over the unjust dismissal of four revenue protection inspectors (RPIs).

Union rep Charlie Cicirello and colleagues Keith Bayman, Dave Goddard and Rob Lees were sacked in the aftermath of a fraud trial involving the train-operating company and separate employees. None of the four were defendants in the case and none have ever been charged with defrauding National Express East Anglia or accused of any financial wrongdoing.

Charlie Cicirello, a trial witness, has been sacked for telling the court that he was aware of the practice among RPIs of sharing ticketing machines and passwords. The other three were dismissed for allegedly carrying out this practice in order to save time and more efficiently deal with passengers.

RMT general secretary Bob Crow said that company claims to have operated a ‘robust’ system governing the use of the machines were a fallacy. Management had cracked down retrospectively on security in the wake of the court case to save it embarrassment.

“Heavy-handed management dismissed our members to cover their own backs and shift responsibility away from themselves using their own workers as scapegoats,” said Bob Crow.

“We cannot let the company get away with this vicious and vindictive action. Charlie has been an efficient and effective union rep and therefore a thorn in the side of management. That is why they want rid of him. The others are being punished with a measure that is out of all proportion to any alleged ‘crime’.”

RMT parliamentary convenor John McDonnell MP tabled an Early Day Motion in parliament on Monday, urging the reinstatement of the sacked workers (see text below). To date it has been signed by nine MPs.


Notes to editors:

A total of 41 RPIs at Bishops Stortford, Liverpool Street, Enfield Town and Chingford are to be balloted for action.

Text of Early Day Motion 2353 tabled by John McDonnell MP

"That this House is appalled at the treatment of Charlie Cicirello by National Express East Anglia; notes Charlie is a key senior representative and activist for the Rail, Maritime and Transport (RMT) union; is dismayed that the company has dismissed Charlie and three other colleagues for alleged breach of procedures despite substantial evidence to the contrary; further notes that the RMT has taken such a serious view of these dismissals that it is conducting a ballot for industrial action in defence of Charlie and his three colleagues; pledges full support for the union in defence of its members; and urges the company to reconsider these cases as a matter of utmost urgency."

October 28, 2008

Bristol campaign for Portishead and Henbury rail links

Bristol Evening Post: October 28, 2008

Rail campaigners have called for more spending on local trains in greater Bristol, including Portishead and Henbury.

The Friends Of Suburban Bristol Railways (FOSBR), which successfully pushed for improvements to the Severn Beach line in 2006, is due to launch a campaign on Thursday.

It wants to see Government investment in other railway lines around the city, including the reopening of the Portishead line to Bristol and the 'Henbury Loop'.

North Somerset Council has already announced plans to buy three miles of track into the middle of Portishead for £75,000, with a view to running trains to the city centre by 2014.

It would cost £15 million for new stations on the line – at Portishead, Ashton Gate and Pill – and operating costs could hit £2.4m per year, of which up to £900,000 could come from the council.

The 'Henbury Loop' is a freight line which runs between Avonmouth and Bristol Parkway but campaigners want to see it opening to passenger trains too.

Conversion of this stretch of the line would require a new station at Henbury and widening of the track to allow passenger trains to run alongside freight trains operated by Bristol Port Company.

Again, millions of pounds would be needed from the Government, First Great Western and Network Rail to get such a link up and running.

It would also need subsidies from local authorities – Bristol City Council spends £400,000 a year to let frequent, regular trains run from Severn Beach to the city centre.

The money would have to be bid for by the South West Regional Assembly (SWRA), after recommendations from the West of England Partnership (WEP) of all four councils in the greater Bristol area.

WEP is backing the Portishead to Bristol scheme but believes the Henbury Loop proposal is not feasible yet.

Instead it is suggesting an improved, regular cross-Bristol service from Yate to Weston-super-Mare would be more realistic and better used.

This could act as the first step towards a 'Metro' system of cross city services.

These two schemes will be proposed when SWRA bids for money under the regional funding allocation to the Government later this year.

FOSBR will launch the Portishead and Northern Bristol Rail Campaign on Platform 1 of Temple Meads Station tomorrow.

Supporters will be holding maps of the rail network and a large postcard addressed to West of England Partnership.

Rob Dixon, a Bristol transport campaigner, said: "We want our councillors to show they really want to do something about congestion and pollution and they understand buses aren't the only method of public transport.

"In other areas of the country, councils have successfully invested in railways to the benefit of local people who use them in great and increasing numbers.

"We would like our councils to show the same support for rail that they have in Leeds or Birmingham, rather than just think about cars and buses."

Nigel Bray of the Railfuture Severnside group said: "The regional funding allocation could transform the rail system in the Bristol area, raising it to the standard of those in other major cities in the UK.

"Portishead has grown massively since its station closed in 1964, when the roads were less congested and there was little concern about the effects of traffic growth on the environment.

"There is every reason to believe the Portishead and Henbury lines would be well supported.

"We would welcome any improvements to local rail services because they are very badly needed."

Julia Dean, spokeswoman for the WEP, said: "In the medium term, the Portishead line and the improved Yate to Weston-super-Mare services are our priority because we believe passenger numbers are likely to be greater.

"Running passenger trains from Avonmouth to Bristol Parkway is part of our long-term plan but it will need substantial investment from the other interested parties – not only to set it up but also to keep it running."


Every time a report like this comes out about rail options, it's all about difficulties and costs, with only a brief mention of the benefits.
Yet propose to clog the roads up further with buses and its a fantastic investment to take the city into the future!!??

This city seems to be unable to see past buses being the only solution to our problem (which their not), despite the fact that we are in such a fortunate position as to find ourselves with a large percentage of the railway infrastructure we'd need, already being in place.

We are all rightly encouraged to leave the car at home but then presented with the alternative of sitting in the same traffic jams in a bus instead (and paying a hardly encouraging fare in the process).

We build a park and ride at Shirehampton, right next to the railway line, and then put the users back onto the road in a bus to complete their journey.

We hold international cricket matches at the county ground, set up a park and ride system at Parkway station and then BUS people through the already congested roads of Filton and Horfield to reach their destination which is just a couple of hundred yards from the same railway line (as Parkway) at the old Ashley Down station.

Same applies to the Memorial Stadium. A little further up Muller Road from the Ashley Down Station, but still easily walkable.
And Ashton Gate the same, right next to an operational railway.

We have the potential for anyone visiting these stadiums to arrive by rail from anywhere in the country via Parkway or Temple Meads, benefiting not only them but the other local residents who are affected by traffic and parking problems, yet we don't even seem to have noticed the opportunity exists.

How many people shopping on Gloucester Road realise there is a station yards away at Montpelier and where it could potentially take them to?

How many people sat in traffic trying to get to the Mall at Cribbs anytime between now and Christmas realise there is an operational railway only a short distance away that could potentially connect with Filton, Stoke Gifford, Horfield, central Bristol, Clifton, Shirehampton, Avonmouth and, via Parkway and Temple Meads, many places beyond.

Yet I know of many people in Bristol who take the train to Newport, Cardiff, Bath, London to Christmas shop rather than sit in traffic to our local Malls at Cribbs and in town.

The link out of town to Portishead is an obvious option. Take a look at the Bristol to Portishead road or the A4 / Avonmouth bridge on an evening or people trying to reach / park near Ashton Gate (or the residents of Ashton Gate)and ask if any of those people would be interested in a train service.

And look what a Henbury circular railway could do if we bothered to show any interest in the idea AND developed it to its maximum potential rather than the bare minimum.
Temple Meads, Montpelier (for Gloucester Road), Redland, Clifton, Sea Mills, Shirehampton, Avonmouth, Henbury, The Mall Cribbs (via a subway), Filton A38 (for the works and college), Parkway, Filton Abbey Wood, Horfield/Lockleaze, Ashley Down (for County Ground and Memorial Stadium), Stapleton Road, Lawrence Hill, Temple Meads.

So much of this is already in place, it's unbelievable that we haven't realised it's potential.

Bristol, instead of laughing at the idea everytime a possible hurdle appears, approach it with the same determination to overcome the challenges as we do when we want to cram a bus lane into an already blocked up Gloucester Road!

I think the potential success of such ventures will not be in doubt. What would determine it's success of how we go about it and the impression the people of the area get from it.

Make a token effort, leave people to find out for themselves what's on offer, use old dirty trains, stations with access via dark bramble filled lanes with no link to their intended market and you will have something that users dread having to use (like our existing options!).

Brighten up stations, make access easy and obvious, make it clear and well known to anyone in or visiting the area how easy they can move around the city, offer an appealing pricing structure, regular comfortable trains.
And include the important finishing touches. A link such as a walk-o-lator (think that's what their called) subway taking you under the airfield straight into the mall (Cribbs), a rail/tram link from Temple Meads into central Bristol and Cabot Circus, make existing links to other areas such as Yate, Bedminster more appealing.

If we want to we could make this city and area one of the best in the country for long term sustainable transport links. A system that users PREFER to use over their car as is seen in a number of other cities. Why are we so scared of it while we're happy to throw never ending funds at traffic management and bus schemes which are insufficient for demand before they're even completed?

One day we'll catch on!!
Mark, Parkway
commented on 29-Oct-2008 13:22

People are missing the point. Bristol City Council (& its councillors) don't want a feasible working plan, they want a grand plan that they can be remembered for regardless of the fact it will tunr into a white elephant. Come on trains are just so 20th century.
Paul, Shirehampton
commented on 29-Oct-2008 13:07

Yes!!! Some support for the missing line. We need that link to Bristol - it'll take hundreds of cars off the road, be a greener part of the world, and stop Portishead residents burning all that oil as they sit in a traffic queue caused by our inept local council's planning department.
Terry Manski, Portishead
commented on 29-Oct-2008 09:48

Anything to reduce congestion in our cities by making other forms of transportation more attractive, the better.
Alex, Bristol
commented on 29-Oct-2008 09:37

Bring it on!

Portishead is in dire need of a return to rail travel, as a glance at the Portbury Hundred any morning will show and a Henbury loop, from Temple Meads to Redland, Clifton, Shirehampton (WITH A P&R STATION), Avonmouth, Henbury, Filton (CRIBBS), Parkway, Horfield, Easton and Temple Meads - and vice versa - would create an ideal commuter and shopping service, as well as providing convenient links to main line long distance services.

Most of the line through Henbury is double track already, so I disagree with the BEP report stating that widening is required costing millions.

The usual mis-informed quasi-sensationalist BEP style of reporting. Please review the article BEP.

A regional TRANSPORT EXECUTIVE is what is really needed to join up Bristol CC with South Gloucestershire, north Somerset and BANES. without this we'll get the same short-termism and irrational arguements that killed the original tram project as BCC and SGC couldn't agree a terminus!

Oh, and whilst ranting, it's about time the councils stopped thinking of the dreaded bus as a solution. It isn't - people don't like them. We have very serviceable existing rail routes in the region which need minimum investment.
Chris, Redland
commented on 29-Oct-2008 09:36

For all the talk and hype about Bristol's lost tram (which would cost millions), Bristol has several servicable rail lines that could easily be upgraded at minimal cost and solve many issues.

Millions was spent putting in Shirehampton PRide, and reducing road widths; all for a few hundred cars a day, whilst it is a only few hundred yards from an existing rail station in service!
Mark, South Glos
commented on 28-Oct-2008 17:03

Arriva on track after growth

Press Association: 28 October 2008

Transport group Arriva shrugged off the economic slowdown as it anticipated substantial earnings and revenues growth for the year.

The company's total revenues were up 57% year-on-year in the nine months to September 30 as a result of growth in its mainland Europe services and the addition of the CrossCountry rail franchise, which began in November 2007.

Arriva's statement said: "While no business is wholly immune from current economic uncertainties, the group's diversified nature, with bus and rail operations in 12 countries, a £12 million order book, and more than 60% of revenues from government contracts, gives it a high degree of resilience and stability".

Year-on-year revenues were up 51% in the group's mainland Europe division for the first nine months. The group said this reflected acquisitions, new tender starts and the increased strength of the euro against the pound.

Revenues for the UK regional bus business increased 6.3% year-on-year in the first nine months and mileage in the London bus business was up 4.5%. In the CrossCountry franchise, like-for-like passenger revenues were up by 11.9% for January 6 to October 11 - compared with 10.3% at the half year stage.

Arriva Trains Wales meanwhile saw increased revenues of 12% year-on-year for the same period. Analyst Gert Zonneveld at Panmure Gordon said Arriva had traded well in the third quarter, with performances in line with management expectations.

"Rising congestion, increasing environmental awareness and high fuel prices have in our view created a modal shift which supports passenger volume growth," he added.

Research analysts at Dresdner Kleinwort said the year-to-date trends were "very encouraging", with the accelerating rate of revenues growth in the CrossCountry division "usefully ahead" of current forecasts.

Arriva said it was introducing more than 460 new buses over 2008, representing an investment of more than £63 million.

The Sunderland-based firm hit passengers with a 4.8% increase in peak fares at the start of the year, with off-peak tickets rising by an average 7% - well above the rail industry average of 5.4%.

See also:

Arriva says outlook positive

SHARECAST: 28 Oct 2008

LONDON - Bus and rail firm Arriva said the outlook for 2008 continues to be positive with revenue and earnings growth for the year being anticipated in line with management expectations.

Group revenue increased by more than 57% year-on-year in the nine months to
September, reflecting growth in mainland Europe and the effect of the
CrossCountry rail franchise which began in November 2007.

Mainland Europe division rose 51% for the first nine months, reflecting acquisitions, new tender starts, and the impact of the euro strengthening against sterling.

In its CrossCountry rail franchise, like-for-like passenger revenues increased 11.9% from 6 January to 11 October 2008. Arriva Trains Wales passenger revenues increased by 12% for same period.

In its UK regional bus business, revenue for the first nine months of the year increased 6.3%.

“While no business is wholly immune from current economic uncertainties, the Group's diversified nature, with bus and rail operations in 12 countries, a £12 billion order book, and more than 60% of revenues from government contracts, gives it a high degree of resilience and stability,” it said.

The group added that its hedging policy is protecting it from material impact during 2008. The final average price paid for fuel in 2008 is anticipated to be 28.2p per litre.

It also has 82% of its fuel requirement for 2009 fixed in price. The current average price fixed for 2009 is now 41.3 pence per litre.

See also:

Arriva Sees FY08 Results Matching Co.'s Expectations

RTTNews: 10/28/2008

Arriva Plc, a transport service organization in Europe, said the outlook for 2008 continues to be positive with revenue and earnings growth being forecast in line with its expectations.

For the nine-month period, revenue increased by more than 57% from the last year, reflecting growth in mainland Europe and the effect of the cross-country rail franchise.

Segment-wise, the company's mainland Europe division was up by 51% in the first nine months, reflecting acquisitions and the impact of the euro strengthening against sterling. In its UK regional bus business, revenue for first nine months increased by 6.3%, and mileage in London business increased by 4.5%.

In its cross-country rail franchise, the like-for-like passenger revenues increased by 11.9% for the period from 6 January to 11 October 2008, while its Trains Wales passenger revenues grew by 12.0%.

Arriva said its financial position remains robust with a strong balance sheet and strong operational cash flows and that it continues to see and take advantage of attractive investment opportunities and gearing.

The company also said it continues to manage fuel costs proactively and presently has 82% of 540-million litre fuel requirement fixed in price, with additional around 14% covered by indexation and 4% remaining unfixed. The current average price fixed for 2009 is now 41.3 pence per litre.

Currently, the stock is up 24.00pence, trading at 600.50 pence on the London Stock Exchange.

RAIB report released into rail accident at Reading East

RAIB: 28 October 2008

The Rail Accident Investigation Branch (RAIB) today released its report into the accident in which a track worker was struck and fatally injured by a train east of Reading station on 29 November 2007.

A full copy of the report is published here:

A summary of the key points from the report is included below:


At 04.53hrs on Thursday 29 November 2007, a 62 year old track worker, employed by Network Rail, was struck and killed by a glancing blow from an empty passenger train. The track worker was working alone and lifting track protection at the end of overnight maintenance work. The train was operated by First Great Western Trains.

The RAIB investigation identified that the immediate cause of the accident was that the worker was walking on an open line without keeping an adequate look out for the trains. Causal factors were that he had confirmed that the line was clear to resume operations while he was still some distance from a permanent position of safety. He was also probably using an umbrella in the bad weather, which obscured his view of the approaching train.


As a consequence of this accident, the RAIB has made five recommendations, targeted at Network Rail.

* Four of the recommendations address wide-ranging issues related to track worker safety.
* The fifth relates to the need for improvements to the monitoring of site visits by managers.

Since the accident, Network Rail have undertaken trials aimed at removing the need for on-track protection measures, which in some circumstances, would reduce the requirement for staff to access the track.

Notes to Editors

1. The sole purpose of RAIB investigations is to prevent future accidents and incidents and improve railway safety. The RAIB does not establish blame, liability or carry out prosecutions.

2. For media enquiries please call 020 7944 4671

October 27, 2008

How Beeching's cuts hit the Midlands

BBC News: 27 October 2008
By Peter Plisner, BBC Midlands Today transport correspondent

Rail experts agree that the infamous Dr Beeching axed too many lines in his 1960s quest to make the railways pay.

The Midlands bore the brunt of the cuts with scores of lines and hundreds of stations closing down.

Miles and miles of track fell into disuse across the Midlands

Its rail network shrank dramatically when Beeching's report The Reshaping of British Railways was published in 1963.

Leslie Oppitz, author of the Lost Railways series of books said: "It was an awful shock to people working on the railways because thousands of jobs were lost along with lost tracks and stations and people were marooned in a sense."

Richard Jones, who used to work on the railways in the Shropshire town of Oswestry, said the Beeching axe was a bitter blow.

He said: "The railway had been a major employer and when it finished people had to go away to work."

Brian Rowe also lost his job in the town.

Too many lines

He said: "When they closed the lines we were absolutely isolated and the town really suffered."

But 45 years after Beeching some routes that closed have been reopened.

Carriages have been converted into holiday apartments in Coalport

Trains are running again on the line from Walsall to Rugeley and Midland Metro trams run on the old track bed between Birmingham and Wolverhampton.

The railways are now carrying ever-increasing numbers of passengers and rail experts maintain that Beeching cut too many lines.

Nick Higton, of consultancy firm Arup, said: "The thing about Beeching that was indefensible was not only did he shut the lines but the government then allowed the routes of those lines to be ripped up and now when we want to put some of them back it's impossible."

Some lines have found new uses.

'More expensive'

South of Stratford-upon-Avon, in Warwickshire, one route now forms part of the National Cycle Network.

At the disused railway station at Coalport, Shropshire, trains have returned although the new carriages have been converted into luxury holiday apartments.

In Stratford-upon-Avon cyclists now use the old railway route

The Beeching era is still remembered by many including former Midlands MP, now Labour Peer Lord Snape.

He agrees that the cuts were too severe.

He said: "The fact that he (Beeching) was wrong is amply illustrated by the fact that we're trying to restore some of those lines even now although it's proving to be a lot more expensive to put them back than it was to take them out in the first place."

The good news is that in the future the rail network could expand if high-speed lines are built.

Although it will not mean a return to the steam days it will certainly help to bring back the convenience of travelling by rail that was lost after the Beeching cuts.

Deutsche-led club seals £1.4bn Porterbrook deal

Private Equity News: 27 Oct 2008
James Mawson

European banks Deutsche Bank, Lloyds TSB and BNP Paribas have struck one of the largest buyouts deals of the year by agreeing to acquire Porterbrook Leasing, a UK train leasing company, for £1.4bn (€1.7bn).

The takeover of the company, which was at the centre of one of the UK’s most controversial privatisations, involves significant commitments from Deutsche.

Deutsche’s structured credit department rather than its alternative investments asset manager, Rreef, is leading the deal with the other two banks supporting. The equity is a minority of the deal. All three banks are also understood to be arranging debt.

The Porterbrook deal represents a superficially flat return for Abbey National, the UK banking division of Spain’s Santander, which bought Porterbrook from coach operator Stagecoach in 2000 for £1.4bn. Porterbrook, which provides train rolling stock, was unavailable for comment last Friday due to a staff holiday after a company meal the previous night, while staff at Deutsche and Lloyds confirmed the deal on background, although all firms’ spokesmen declined to comment.

Deutsche Bank has slipped down the ranking of arrangers and lenders of debt this year, according to data provider Dealogic. Private Equity News revealed in June that Deutsche Bank, the second-largest lender of buyout loans last year, was taking a cautious approach to underwriting leveraged finance on private equity deals this year until at least Christmas, according to several sources at buyout firms.

There have been no European private equity transactions larger than $650m (€519m) since Lehman Brothers filed for bankruptcy on September 15, according to Dealogic. The largest European buyouts this year have been the £1.8bn acquisition of UK oilfield services company Expro International by a Candover-led consortium and the slightly smaller €2.8bn deal for Evonik Industries by CVC Capital Partners.

Charterhouse Capital Partners acquired Porterbrook in January 1996 and a report by UK parliamentary watchdog, the Public Affairs Committee, found the government had been short-changed by £900m in the 1994 privatisation of Porterbrook along with its two train leasing peers, Angel Trains and Eversholt.

Stagecoach acquired Porterbrook from Charterhouse in August 1996 for £825m, giving the buyout firm a 6.5 money multiple return on its £73.6m equity investment.

See also:

£2bn sale of train company raises fears for health of Banco Santander

The Guardian: October 28 2008
Phillip Inman and Dan Milmo

• Bank insists it is ditching a non-core business
• Analyst sees response to Latin American problems

Abbey yesterday agreed the sale of train-leasing company Porterbrook for a reported £2bn amid concerns that the bank's owner, Banco Santander of Spain, had joined the list of major financial institutions wounded by the credit crunch.

Abbey said the business, which provides rolling stock for rail franchises, was no longer "core" to its ambitions as a high street bank and its sale to a consortium of Deutsche Bank, Lloyds TSB and BNP Paribas would allow the bank to focus on retail customers. The sale came as analysts began to question the finances of Santander, which until now was considered among the most robust of all the big European banks.

Analysts at broker Keefe, Bruyette & Woods said Santander was coming under pressure to boost its finances after a deterioration in its home market and its main overseas markets in Latin America. "We now see an increasing risk of earnings downgrades, a deteriorating risk profile and growing pressure to strengthen its capital."

An Abbey spokeswoman denied that it had been a forced sale. "The reasoning behind selling Porterbrook is that it is not core to our retail banking business," she insisted.

Porterbrook is one of Britain's largest train-leasing businesses. It owns 6,064 carriages it leases to operators including Southern and South West Trains - two of the biggest commuter franchises.

The train-leasing business has recently been dominated by large banking groups.

Angel Trains was owned by Royal Bank of Scotland, which sold the company in June to a consortium led by Babcock & Brown, an Australian investment firm. RBS sold the business in order to bolster its balance sheet after a £12bn share issue but the bank was overwhelmed months later by further turmoil in the financial markets and was forced to accept a government bail-out.

HSBC owns the remaining significant player in the train-leasing market, HSBC Rail, but has appointed NM Rothschild to explore options for the business, including a disposal.

HSBC, along with Santander, was considered to have escaped the worst of the credit crunch until recently, but its operations in the far east have come under strain since the credit crunch spread to Asia this autumn.

Abbey was largely unaffected while its business in Spain and Latin America remained robust. However, Latin American markets have begun to panic as concerns have spread that their economies could suffer a wide-ranging and deep recession.

The rail-leasing firms were born out of the Major government's privatisation of British Rail in the mid-1990s. Porterbrook was sold in 1996 to buy-out firm Charterhouse Capital Partners, which turned an investment of £73.6m into £825m when it sold the firm in August of that year to Stagecoach.

A parliamentary watchdog criticised the sale. It said the Treasury was short-changed by £900m from the sale of the leasing companies. Abbey bought the firm in 2000 for £1.4bn.

Porterbrook dismissed fears that the sale, plus the recent £3.6bn deal for Angel Trains, will delay plans to add 1,300 rail carriages to the British network by 2014.

"The consortium has looked at this business in the context of future investment in rolling stock and I believe that they want to develop it along those lines," said Paul Francis, Porterbrook's managing director. The Department for Transport, which is commissioning the new carriages, said it was "confident" that the ownership changes would not affect its carriage programme.

The future of the train-leasing industry was thrown into doubt last year when the Competition Commission was asked to investigate the market. Angel Trains said the inquiry could derail the government carriage programme. However, the commission has indicated that it will not punish the train lessors and has instead found that the way the government sets out franchises is a bigger restriction on competition.

Rail operators fear delays to upgrades

The Times: October 27, 2008
Angela Jameson

Rail operators are concerned that a multibillion-pound programme to buy much-needed new carriages could be delayed because two thirds of the country's train leasing industry is about to change hands.

Porterbrook, the train leasing company, has been sold by Abbey to Deutsche Bank for an estimated £2 billion and details of the deal will be announced this week. Meanwhile, HSBC has appointed NM Rothschild to conduct a strategic review of its eight-year-old HSBC Rail business, which could also lead to a sale.

This year, Angel Trains, which owns the distinctive Pendolino trains used on the West Coast Main Line, was sold by RBS to the Babcock & Brown European Infrastructure fund, an offshoot of the Australian investment company, for £3.6 billion. Deutsche Bank was one of the banks that backed the deal.

The Department for Transport is in the process of buying 1,300 carriages to improve capacity for commuters across the rail network.

New carriages are being bought for services that run through London between Bedford and the South Coast, while additional Pendolino carriages are being procured for use in 2012 on the Virgin-operated West Coast Main Line. The department is also about to shortlist potential manufacturers for between 45 and 55 new Intercity Express trains that will be brought into service between 2013 and 2018.

“There will be questions about the ability of the new owners to fund these huge procurement contracts, even though they are underwritten by the Government,” a rail insider said.

The UK's rolling stock business has been under scrutiny by the Competition Commission for the past two years, which has been one of the reasons that the banks were keen to sell their businesses.

However, the Competition Commission's provisional findings, released in August, did not blame the three main rolling stock leasing companies (Roscos) for making excessive profits, as expected, but criticised the way the Government lets rail franchises. The Commission found that train operators had a “very limited number of rolling stock options available” when bidding for franchises, restricting competition.

The DfT, which took back responsibility for train procurement several years ago, has also attracted industry criticism for micro-managing the procurement operation and for demanding that manufacturers' tenders cover a multitude of options for new trains.

While HSBC has appointed NM Rothschild to conduct a review of its profitable rail leasing arm, it is not thought to be committed to its sale, because of the difficulty of selling any asset at the moment. The bank is understood to be considering expanding the company into Europe where there is new demand for leased trains, as states proceed with rail privatisation.

Both Abbey and HSBC denied that the sale of their rail leasing businesses was necessary to raise fresh capital.

See also:

Banks may offload train leasing arms

LDP Business: Oct 27 2008

TWO major banks are considering selling their train leasing arms in deals worth £4bn in a bid to shore up their balance sheets.

Abbey, which is owned by Spanish banking giant Santander, is understood to be close to agreeing a £2bn sale of its Porterbrook train leasing arm to Deutsche Bank, according to a Sunday newspaper.

At the same time, HSBC has appointed two sets of advisers to carry out a review of HSBC Rail, which could be auctioned off for £2bn as well.

An announcement on the Abbey sale could come as early as this week, and, if both deals went ahead, around two- thirds of Britain’s trains would change hands.

Porterbrook has a fleet of 5,500 trains, including electric and diesel locomotives, high speed trains and freight wagons, which it leases to 17 of the UK’s 24 train operators.

HSBC rail has 4,000 vehicles, including the inter- city trains that are used by National Express on the east coast mainline between London and Edinburgh.

Britain’s remaining 4,500 trains are owned by Angel Trains, which was sold by Royal Bank of Scotland earlier this year to the Australian Investment bank Babcock & Brown for £3.6 bn as part of the group’s capital raising programme in the wake of the credit crunch.

The rolling stock groups were created after the break up of British Rail in the 1990s.

If HSBC decides to go ahead with a sale, the deal will be handled by investment bank NM Rothschild and the group’s own investment banking arm.

Santander and HSBC, which are both global giants, have so far survive the credit crunch relatively unscathed, with neither group needing to tap into the emergency funding the Government has made available.

But moves to sell off the assets to help recapitalise their balance sheets are still likely to be welcomed by investors, particularly as their UK rivals have now received state aid.

Shares in HSBC fell by 13% last week over concerns about the bank’s exposure to mortgage assets and the health of the Hong Kong economy.

An Abbey spokesman declined to comment on the speculation, and it was not possible to contact HSBC.

Meanwhile, Abbey is expected to say it is currently writing one in five new mortgages in the UK when it reports third-quarter figures later this week.

See also:

Abbey lines up $3.1 bln Porterbrook sale-paper

Reuters: Oct 26, 2008

LONDON - British bank Abbey, owned by Spain's Banco Santander, is set to sell its train-leasing arm Porterbrook to Deutsche Bank for 2 billion pounds ($3.1 billion), The Sunday Times reported.

Analysts said Porterbrook, which has a 5,500-vehicle fleet including electric and diesel locomotives, high speed trains and freight wagons, could be sold to bolster Santander's capital base, according to the newspaper.

Abbey declined to comment on the report.

Another train-leasing firm, HSBC Rail, could be sold for a similar sum after HSBC appointed two sets of advisors to auction it, the newspaper said.

Sources at the bank, however, told the newspaper that no decision had been taken on a sale.

See also:

HSBC and Santander shares slide as investors get nervous

Daily Telegraph: 9:06AM GMT 27 Oct 2008
By Katherine Griffiths

Shares in HSBC and Spain’s Santander, two of Europe’s biggest banks which have escaped the worst of the credit crisis, are coming under pressure as investors fear they will be sucked into in the financial maelstrom.

HSBC shares tumbled 71.5p, or 11pc, to 624.5p and Santander shares wwere down 7pc at 6.63 euros.

Today's declines come after analysts warned that the banks could be hit by worsening economies in Latin America and Asia, and rising bad debts from UK and US customers.

While HSBC and Santander are among the best capitalised banks in the world, they are looking at capital levels and how capital is allocated within their businesses – in common with other banks.

Santander’s UK subsidiary, Abbey, is poised to sell its train-leasing arm, Porterbrook, for about £2bn. Its sale to Deutsche Bank could be announced this week. HSBC may also sell its train-leasing business in a deal which could raise a similar amount. HSBC has appointed NM Rothschild along with its own investment bankers to consider a possible sale, though a deal is not imminent.

Banks are keen to sell their train-leasing businesses because they are capital-intensive. Royal Bank of Scotland sold its business, Angel Trains, to Babcock & Brown earlier this year.

Analysts at Morgan Stanley forecast on Friday that HSBC may halve its dividend in 2009 as Hong Kong’s economy slows while bad debts in the UK and US rise.

Michael Helsby, co-author of the research, said HSBC is seen as a “winner” from the global turmoil, but added that its relatively strong position is “more than captured” in its share price. “HSBC is a bank and is a materially leveraged play on the events that are unfolding in the US, UK and emerging markets”.

Meanwhile, ratings agency Standard & Poor’s warned Santander would be hit if Latin America deteriorated.

“Santander has significant exposure to Brazil, Mexico and Chile. Although a continent-wide crisis is not our central scenario at the moment, we believe exposure to Latin America has turned from a net positive to a net negative,” S&P’s Marco Troiano wrote in a note.

Santander has a total tier 1 capital ratio of over 7pc, but may decide to raise it further.

Harbinger Capital, the hedge fund run by Philip Falcone, built up a £165m short position in Santander’s shares earlier this month. Harbinger has made similar bets against Spain’s BBVA bank and Banco Popular.

October 26, 2008

Abbey and HSBC Rail set to offload rail groups

Sunday Times: October 26, 2008
Ben Marlow

All change as HSBC prepares to follow Abbey in £4 billion sale of rolling-stock firms

TWO-THIRDS of Britain’s trains are set to change hands for a total of about £4 billion as banks seek to raise further capital by selling assets.

Abbey, owned by Spain’s Santander, is poised to sell its train-leasing arm Porterbrook to Deutsche Bank in a £2 billion deal that could be announced as early as this week.

HSBC Rail could also be sold in another £2 billion deal, after its parent company, HSBC, appointed two sets of advisers to auction it. The deal will be handled by NM Rothschild, the investment bank, and HSBC’s own investment-banking arm.

Porterbrook has a fleet of 5,500 vehicles, including electric and diesel locomotives, high-speed trains, and freight wagons. It leases trains to 17 of the 24 UK train operators.

HSBC Rail has more than 4,000 vehicles, including the inter-city trains used by National Express on the east coast mainline between London and Edinburgh.

Britain’s remaining 4,500 trains are owned by Angel Trains, sold this year by Royal Bank of Scotland to the Australian investment bank Babcock & Brown for £3.6 billion.

The rolling-stock groups were created after the break-up of British Rail in the 1990s. The financial institutions that bought them from the government — and a small group of executives that participated in the buyouts — made killings when they sold them on, prompting fat-cat allegations.

Recently they have been the subject of a Competition Commission investigation, from which they emerged fairly unscathed. In recent years they have branched out overseas, buying new vehicles to hire to continental train companies. Santander and HSBC are among the few banks that so far appear to have come through the credit crunch in good shape. However, now that rivals have received state money, these two may have to raise capital to bolster their capital base, analysts say.

Sources at HSBC said it had not yet decided to sell its rail arm and would wait for advisers to complete a review.

Some analysts, though, would probably welcome any move by the banking giant to sell assets. Last week shares in HSBC fell 16% on fears over its exposure to mortgage assets and the Hong Kong economy, which appears to be slowing.

Michael Helsby, a Morgan Stanley analyst, warned that at HSBC North America the book value of assets, mainly sub-prime loans, is $33 billion (£21 billion) more than their market value.

If the bank writes off that sum, its capital reserves would fall to the level at which its rival UK banks are having to be recapitalised, said Helsby.

October 25, 2008

Confirmed: infrastructure investment will drive recovery

New Civil Engineer: 23 October 2008

Chancellor Alistair Darling has vowed to boost the UK economy with increased spending on the public realm. At last he seems to understand the value of decent modern infrastructure, says NCE editor Antony Oliver.

As I wrote in this column just after the banking crisis started to emerge at the end of September "investment in quality, tangible infrastructure can and must be the driver for economic recovery".

One month, several bank collapses and a £37bn public cash injection later, I am pleased to see that Chancellor Alistair Darling at last agrees and has vowed to use public investment in public infrastructure to drive the UK's economic recovery.

"You will see us switching our spending priorities to areas that make a difference," he said, highlighting that areas he thought would make that difference included Crossrail, the 2012 Olympics, power stations and transport projects.

His list was not in fact dissimilar from that published by NCE last week.

This is all, without question, very good news for the industry. We must now wait of course for the flesh to be put on the bones. But by all accounts, now Gordon Brown's 40% of GDP public debt barrier has been passed and parked, the forthcoming pre-Budget report should demonstrate that the government has finally twigged the long term value of decent modern infrastructure.

Darling's reference to and belief in Keynesian economic theory is crucial. When economist John Maynard Keynes proposed the theory of budget deficit-backed state spending as a solution to the economic downturn of the 1930s we did, there was indeed a raft of railway legislation and construction that followed – witness the huge expansion in the London Underground at the time as one example.

Darling's comment must surely therefore once again reinforce civil engineering's place as a fundamental part of the UK's future growth plans. Fundamental, as new business secretary Lord Mandelson described it this week, to the "new approach to business growth".

We have to believe it. We have to champion it. Decent modern transport, energy and water infrastructure are the backbone of the nation's economic prosperity.

And while banking and financial services are vitally important of course, they have been shown as simply a mechanism - not a substitute - for allowing the so-called "real" economy to grow.
As a profession we have to use this difficult moment in economic history to our advantage. We have to absolutely hammer home to politicians that civil engineers must now be at the heart of policy making. We have to reinforce ourselves as the solution and work with the new willing listeners in Whitehall to build the nation out of recession.

As I said last week, the future will be all about relationships and using them to deliver more for less. So when handed the keys to Crossrail, rail investment, renewable and nuclear power supply investment we must make absolutely sure we can deliver ahead of time and under-budget.

But with this firmly in mind, now is the time for us to grab the ball thrown to us by Darling and run as hard as we can. For as long as we can.

See also:

Man in the News: John Maynard Keynes

Financial Times: October 17 2008
By Ed Crooks

Man in the News: JM Keynes

“We have reached a critical point,” John Maynard Keynes wrote in March 1933. “We can ... see clearly the gulf to which our present path is leading.” If governments did not take action, “we must expect the progressive breakdown of the existing structure of contract and instruments of indebtedness, accompanied by the utter discredit of orthodox leadership in finance and government, with what ultimate outcome we cannot predict.”

As the world reels from a 1929-style stock market plunge and a 1931-style banking crisis, his words are a fair assessment of the dangers we face once again. Keynes, whose life’s mission was to save capitalism from itself, is more relevant than at any time since his death in 1946.

His renewed influence can be seen everywhere: in Barack Obama’s planned stimulus package, for example. When George W. Bush said his administration’s plan to take equity in banks was “not intended to take over the free market, but to preserve it”, he could have been quoting Keynes directly.

The key to Keynes was his commitment to preserving the market economy by making it work. He was dismissive of Marxism but believed the market economy could survive only if it earned the support of the public by raising living standards.

The role of the economist, he believed, was to be the guardian of “the possibility of civilisation”, and no economist has ever been more suited for that role.

Lionel Robbins, later head of the London School of Economics, described Keynes as “one of the most remarkable men that have ever lived,” surpassed in his time only by Winston Churchill. Even Friedrich Hayek, Keynes’ staunchest adversary, described him as “the one really great man I ever knew, and for whom I had unbounded admiration”.

His optimistic, positive thought reflected his comfortable and happy upbringing and career. An academic’s son, he won scholarships to Eton and Cambridge and fell in with the Bloomsbury Group, the circle of writers and artists such as Virginia Woolf and Lytton Strachey who embodied an ideal of cultured living.

He was an imposing figure, six feet, six inches tall and full of jokes, gossip and sharp observations. Alongside economics, he had an array of other interests as mathematician, administrator, academic, investor, journalist, art collector, politician, impresario and diplomat. He was even an exemplary husband, devoted to his wife, Lydia Lopokova, a ballerina. In his language he could be carelessly provocative. But, as he said: “Words ought to be a little wild, for they are the assaults of thoughts on the unthinking.”

When bad policies were making economic problems worse, he felt a moral obligation to change them. He worked with distinction at the Treasury during the first world war and at the war’s end argued presciently against the imposition of excessively harsh conditions on Germany. When his advice was ignored, he left and published his views in his first great polemic, The Economic Consequences of the Peace .

Returning to Cambridge, Keynes kept up a flow of books and articles, including The Economic Consequences of Mr Churchill, savaging Britain’s return to the gold standard in 1925. It was not until the Great Depression, however, that his ideas reached their full flowering, published as The General Theory of Employment, Interest and Money in 1936.

The heart of the book is the idea that economic downturns are not necessarily self-correcting. Classical economics held that business cycles were unavoidable and that peaks and troughs would pass. Keynes contended that in certain circumstances economies could get stuck. If individuals and businesses try to save more, they will cut the incomes of other individuals and businesses, which will in turn cut their spending. The result can be a downward spiral that will not turn up again without outside intervention.

That is where government comes in: to pump money back into the economy by some means, such as spending on public works, to persuade individuals and businesses to save less and spend more themselves.

Keynes wrote to George Bernard Shaw that he expected the General Theory to “largely revolutionise ... the way the world thinks about economic problems”, and so it proved. Economists such as Paul Samuelson and James Tobin systematised Keynes’ ideas, using them as the foundations of what became orthodox thought and economic policy for more than two decades after the second world war.

The cover of Time magazine in December 1965 quoted Milton Friedman saying: “We are all Keynesians now.” Friedman later said he had been misrepresented by selective quotation, but the point held good. Charles L. Schultze, then US budget director, felt able to tell Time: “We can’t prevent every little wiggle in the economic cycle, but we now can prevent a major slide.”

By the time Richard Nixon borrowed Friedman’s line in 1971, however, the tide was already beginning to turn. Like a share tip from a lift boy, Nixon’s endorsement was a sign that Keynes’ intellectual stock was about to fall. Keynesian economics seemed as inadequate in the 1970s stagflation as classical economics had been for the 1930s depression, and Friedman’s monetarism eclipsed it among policy-makers in the US and Britain.

After crude applications of monetarism also foundered in the 1980s, modern macroeconomic orthodoxy blended ideas from both, reflecting a belief in the ability of monetary and fiscal policy to affect employment and growth, but also concern for inflation and budget deficits.

As the financial crisis has deepened, that orthodoxy has been shaken. The problems Keynes faced in the 1930s, such as the ineffectiveness of monetary policy and banking failures triggered by falling asset prices, again seem the most pressing. Keynes’ solutions, including greater public spending funded by borrowing, are becoming popular. The criticisms that this will fuel inflation and raise budget deficits are still heard but are increasingly seen as irrelevant.

Robert Skidelsky writes at the end of his definitive three-volume biography that Keynes’ ideas “will live so long as the world has need of them”. It certainly seems to need them now. Keynes was scathing about the view that the Great Depression was a return to normality, a necessary correction after the unsustainable excesses of the 1920s. On the contrary, he argued, the economic expansion should be seen as the normal state of affairs and the downturn was an “extraordinary imbecility”.

With the right policies, he said, the good times could be brought back. He was right then; we must hope he will be right again.

See also:

Brown's triumph over Brown

Guardian Comment is Free: October 22 2008
Christopher Harvie

Scotland will not thank the prime minister for his efforts to 'save' its banking system

In 1975 two books came from the Scottish universities. The Red Paper on Scotland would establish the radical reputation of the student rector of Edinburgh, Gordon Brown; The Crime Industry by the Glasgow sociologist John Mack and his German co-author, Hans Juergen Kerner, would remain for specialists, with its argument that computers, tax havens and globalisation would blur the line between tough business practice and outright crime.

Thirty years later, little remained of Brown's radicalism, but the Mack-Kerner thesis bobbed, iceberg-like, ahead of his economy, powered not by industry but by the speculation of the United Kingdom of London.

"Light-touch regulation" stemmed from the Big Bang of 1986, codified by Brown's "liberation" of the Bank of England in 1997. From it followed the noughties boom in the City. This was driven by American investment bankers, "Sarbanes-Oxley refugees" on the loose from a Wall Street increasingly regulated after the Enron fraud. They were able to operate unchecked by competing British regulators who rarely got their acts together.

Investment banking shifted from handling the financing of industrial concerns to trading in "derivatives" and "instruments". Translated, this meant bundles of capital, some legitimate, some which had been inflated by loans to people who could never pay them off. Much of the last sort of finance had murky origins in the $1.3 trillion (and counting) returns of international crime. Bernard Shaw in Mrs Warren's Profession talked of the Church of England living on the profits of Mrs Warren's brothels. Brown was roughly in the same position, and for years he did little to remedy matters.

In his study of money-laundering, The Washing Machine, Nick Kochan wrote:

"London increasingly looks like an offshore centre serving many dubious financiers while at the same time claiming to have regulations which put it among the world's top onshore jurisdictions …"

Government has failed to invest in sufficient skilled law enforcement officers or regulators to curb its sprawling financial system. But this is no accident. The UK's economy cannot afford to curb its income from the "invisible" financial sector while its industrial sector becomes anorexic.

The Tories haven't dissented, much of their funding coming from treasurer Michael Ashcroft's Belize ventures and various spread-betting wheezes. Nice Mr Cameron has been the PR front man of fringe finance, no more than that. The winners have long cleared off to their tax havens. Look at the City matadors of the late Thatcher or Major age. Where are they now? Nowhere near the place.

This was a culture in which fortunes were made selling packets of securities that only one or two nerds in a big bank could actually analyse. While the boom continued, happiness; when it failed – when actual houses in Phoenix or Greater Chicago couldn't be afforded and ground their 'owners' down – the derivative merchants clawed at one another in "shorting" the stocks of troubled firms.

In September 2006 the Observer's Bill Keegan, last of the Keynesians, wrote:

"All I can say is that at the World Bank/IMF annual meetings in Singapore last month, one needed several hands to count the number of people who were concerned about the possibility/probability of a great Regulatory Failure!"

A year later, Northern Rock broke. The remedy: state intervention. In autumn 2007 Chancellor Alistair Darling threw a sum of money at the Rock that would have bought over the entire British railway system. He and Brown were therefore relatively practised when Wall Street hit its own iceberg and first Bear Stearns and then Lehman went down. The anticipation of slump spread from property to the entire economy and "cut and run" pervaded the dealers, to whom property had become a burden. So Halifax, the UK got hit.

Brown thought he could do a deal with Lloyds TSB as Eric Daniels, its CEO (whose connections to Pinochet's Chile were as well-hidden as Brown's brother Andrew's position as chief PRO to Electricité de France, now owners of British Energy). But the City now tasted blood in the waters, like millions of potential house buyers in the suburbs who waited for their neighbour to drop the price of his place.

Result: UK investment banking followed its American counterpart into palliative care. Brown intervened with some aplomb, having nothing to lose. Further, by smashing the Scottish banking system, he might turn humiliation at the hands of the Scottish nationalists into a personal triumph. Alex Salmond needed his old employer, the Royal Bank, as an ersatz foreign office, powering his Economic Advisory Council under Sir George Mathewson.

So here we are in mid-October. Brown still fronts an economy in which only 14% comes from manufacturing, much lower than in Europe. Contributing little or nothing to renewable energy or sustainable transport, it is henceforth likely to contribute even less. Germany or France, with more invested in industry, and watching their market for Porsches, watches and cruise liners shrivel up, are still in the wings.

The whole thing might look – and the London press will make it look – like Scotland's second Darien disaster. But London's flawed financial elite stays in place – Stephen Hester, the new boss of RBS, is an iconic Tory Bourbon – and the condition of England has not improved. Industrial capital, however, remains powerful in Europe: the Norwegian oil fund, the manufacturing interests of the German regional banks. They must be appraising the offshore islands, matching decrepit infrastructure and disgraced management to energy potential.

Brown didn't take the Scots with him in his City commitments, and their banks were done down by a capitalism all too close to the Mack-Kerner model. His solution, "I value the Scottish banking tradition. I believe we can rebuild these banks' is shown up by Magnus Linklater's Times article as a lie: "They are now British, not Scottish, banks and their future strategy will be determined from the City of London, not Edinburgh." And the City whose credulity, greed and incompetence got us into this? After Brown's intervention, and in the light of his past policies, the Scots owe neither him nor the UK any loyalty – and the bank layoffs and surrounding depression haven't even begun.

Deutsche Bahn to Recall Part of High-Speed Train Fleet

Deutsche Welle: 24.10.2008

German railways company Deutsche Bahn said Friday it would idle the most modern type of its bullet trains, amid fears that the axles of the ICE-T trains were cracking.
Deutsche Bahn's decision is set to cause major disruptions to train travel across Germany

Deutsche Bahn blamed the major disruption to German passenger services beginning Saturday on the manufacturers of its 71 ICE-T trains.

The consortium, which consists of Germany's Siemens, France's Alstom and Canada's Bombardier, refused to provide "reliable data" on the safety of the axles, said DB Chief Executive Hartmut Mehdorn.

A cracked axle was blamed earlier this year for a low-speed ICE derailment at Cologne station in which nobody was hurt.

Passengers have worried since that an axle might fail while one of the trains is moving at the normal cruising speed of between 200 and 300 kilometers per hour.

Rail schedules have been disrupted over the past two weeks after the frequency of checks on both ICE-T and ICE-3 trains was increased after a further crack was found.

"Safety has the absolute priority," said Mehdorn on Friday. "We see ourselves as having been left dangling (by the consortium), which has confronted us with unreliable and unclear information."

He did not elaborate on how long the stoppage would last.

The ICE-T model is designed to tilt slightly on curves. Other models of the bullet-nosed red-and-white ICE trains -- the abbreviation stands for intercity express -- were not grounded.

Among routes likely to face delays are Hamburg-Berlin, joined by a popular hourly service that takes just 95 minutes, and a route between the financial centre of Frankfurt and the Austrian capital Vienna, which also employs the ICE-T model.

Deutsche Bahn said a late Thursday derailment by a slow-moving empty ICE train in Hamburg station appeared to have a different cause, human error.

See also:

Germany's D.Bahn suspends some high-speed trains

Reuters: Oct 24, 2008

BERLIN - German rail operator Deutsche Bahn is taking some of its high-speed trains out of use to make technical checks, the company said on Friday.

The company has also asked the manufacturers of its ICE-T fleet for safety guarantees for its trains and is checking the wheelset axles in dozens of trains.

The consortium of manufacturers includes Bombardier, Siemens.

"Safety is the absolute priority for us," said Deutsche Bahn chief Hartmut Mehdorn in a statement.

The inspections follow a derailment at Cologne station in western Germany in the summer.

Deutsche Bahn has been unable to establish the cause of the derailment. "We feel let down by the industry, which has given us flimsy and unclear information," said Mehdorn.

Bombardier said the train's axles had been in order.

"The axle of the ICE T-train and the ICE 3 train conform with the norms and standards that were in effect at the date of construction and this was approved by the authorities," said Heiner Spannuth, a spokesman for Bombardier in Berlin.

He added that Bombardier had given Deutsche Bahn support in the technical analysis of the crack but no manufacturers had been involved in the examination.

"It is done by the authorities and we are waiting for results from the examination and until we have received the results, we can not give any further comments," said Spannuth.

The incident is another blow for Deutsche Bahn after Germany was forced to postpone the planned partial privatisation of the company due to turmoil on financial markets earlier this month.

The checks are likely to cause chaos for travellers at the weekend and four lines in particular will be hit on Saturday, including those linking Hamburg and Munich, through Berlin.

The flotation of a unit of Deutsche Bahn, which German Finance Minister Peer Steinbrueck has said is off the agenda for now, would have been Germany's biggest initial public offering since 2000.

See also:

German railway takes tilting trains out of service

The Associated Press: October 24, 2008

Germany's national railway said Friday it is taking part of its high-speed train fleet out of service after a crack was found in an axle. The move is likely to cause disruption on several major routes.

Deutsche Bahn AG says nearly all the 70-strong fleet of ICE-T trains will be idled starting Saturday for safety checks. It was unclear when they might return to service. The Venturio-model trains are provided to Deutsche Bahn by a consortium of Bombardier Inc., Siemens AG and Alsthom.

The trains' tilting technology allows them to lean into curves and take them at a higher speed than ordinary trains. An axle crack was found earlier this month and Deutsche Bahn stepped up the frequency of safety checks.

The rail operator said that it is moving to sideline the fleet after the trains' manufacturers gave it only "unclear information" on the axles' life span.

See also:

Deutsche Bahn Limits ICE Service as Trains Checked

Bloomberg: Oct. 24
By Frances Robinson

Deutsche Bahn AG, Germany's state- owned railway, will temporarily reduce services tomorrow while safety inspections of its high-speed ICE-3 trains resume and the company seeks guarantees from the manufacturers.

Until Siemens AG, Alstom SA and Bombardier Inc. provide assurances that the trains' axles are in proper condition, the only option is to run a reduced timetable and carry out additional checks, the Berlin-based railway said in a statement.

Four lines are affected, including routes linking Hamburg with Munich via Berlin, Wiesbaden to Dresden, Stuttgart to Zurich and Dortmund to Vienna via Koblenz. "Safety is our absolute priority,'' Deutsche Bahn Chief Executive Officer Hartmut Mehdorn said in the statement, adding that he felt "let down'' by the railway's suppliers.

Deutsche Bahn has been staging periodic inspections of the ICE-3 models' axles since a derailment at the Cologne, Germany, main train station on July 9 that was blamed on a wheel-set. The trains are designed to travel at speeds as great as 300 kilometers (186 miles) per hour.

Alstom, the world's largest trainmaker, is "working closely together with Deutsche Bahn and all other members of the consortium to carry out an investigation,'' said Cecile Dodat, a spokeswoman at the company's Levallois-Perret, France, headquarters. She didn't know how long the investigation would continue.

Bombardier, the world's second-largest trainmaker, hopes that the German railway regulator's inspections "will come to an end soon,'' said Heiner Spannuth, a spokesman in Berlin for the Montreal-based company's Bombardier Transport unit. "Before the investigation comes to an end, we cannot act.'' The company is "supporting'' Deutsche Bahn's technical analysis.

Messages left via telephone and e-mail seeking comment from spokesmen at Munich-based Siemens didn't immediately receive a response.

China to invest in rail network as economic stimulus measure

AFP: 25 October 2008

BEIJING — China will invest nearly 300 billion dollars in its overburdened rail system as a stimulus measure aimed at blunting the impact of the global financial crisis, state press said on Saturday.

The investment is part of plans to extend the country's railway network from the current roughly 78,000 miles to nearly 100,000 miles by 2010, Shanghai's Oriental Morning Post reported.

The Beijing News quoted a rail official as saying that, while the network needed extending, the massive investment of 292 billion dollars was also intended to help lift the nation's economy as it suffers amid the global woes.

"New rail investment will become a shining light in efforts to push forward economic growth," railway ministry spokesman Wang Yongping was quoted saying.

China's economy recorded its slowest growth in five years at 9.0 percent in the third quarter of 2008.

The situation has looked increasingly dire in recent days with export-dependent factories closing and laying off thousands of workers, with warnings from industry heads of much worse to come.

The China Daily newspaper said the rail investment plan had been approved by the State Council.

About 1.2 trillion yuan (about 170 billion dollars) had already been allocated, it said.

The paper quoted a government policy advisor saying the plan was similar to China's successful strategy for warding off the Asian financial crisis of the late 1990s.

"In 1997, we dealt with the Asian financial crisis by stimulating domestic economic growth through investment in the construction of highways," policy advisor Zheng Xinli was quoted as saying.

"This time the money will go to improving the rail network."

China's railway network is one of the most extensive in the world, but has come under pressure as the nation's economy has boomed, giving millions more the opportunity to travel.

Among them, more than 200 million migrant workers are estimated to have left their homes in the countryside for work in urban or coastal areas.

The vulnerability of the rail network was laid bare last winter, when fierce snowstorms crippled China's transport systems, stranding millions of passengers trying to return to their homes during the peak Chinese New Year travel period.

See also:

China to invest $US300 billion in rail system

Radio Australia: October 25, 2008

China will invest nearly $US 300 billion in its rail system as a stimulus measure aimed at blunting the impact of the global financial crisis.

Shanghai's Oriental Morning Post says the investment is part of plans to extend the country's railway network from the current roughly 125,000 kilometres to nearly 160,000 kilometres by 2010.

The Beijing News quoted a rail official as saying that, while the network needs extending, the massive investment of $US292 billion is also intended to help lift the nation's economy as it suffers amid the global woes.

China's economy recorded its slowest growth in five years at 9 per cent in the third quarter of 2008.

October 24, 2008

Report prompts calls for inquiry into Potters Bar and Grayrigg rail crashes

The Guardian: October 23 2008
Dan Milmo, Transport correspondent

RMT union calls for joint investigation that should include study of rail industry structure
The derailed Virgin train at Grayrigg, Cumbria. Photograph: Getty

The government today faced renewed calls for a joint public inquiry into the fatal Potters Bar and Grayrigg rail crashes after an official report (pdf) criticised the safety regime at Network Rail.

The demand for a combined investigation followed the publication of a detailed study into the derailment of a Virgin train on the west coast main line last year, which killed one person and injured 86.

The Rail Accident Investigation Branch (RAIB) said a "number of shortcomings" in Network Rail's safety management helped cause the accident on the evening of February 23 near Grayrigg, Cumbria.

A faulty set of points, which switch trains from one side of a railtrack to another, was allowed to deteriorate and should have been spotted by a track inspection five days before the incident - but local management failed to carry out a scheduled check. The RAIB said an "incomplete" understanding of the type of point that caused the Grayrigg crash also contributed to the crash, in which an 84-year-old passenger, Margaret Masson, died.

The report has prompted calls from unions and representatives of rail crash victims for a joint public inquiry into Grayrigg and Potters Bar, where seven passengers were killed on May 10 2002 after a poorly maintained set of points derailed a train as it approached Potters Bar station at high speed.

"A public inquiry will take an independent look at what needs to be done. The problems with the maintenance regime are fundamental and systemic. This could happen again," said Louise Christian, a solictor representing victims of the Grayrigg and Potters Bar crashes.

The RMT union also called for a joint investigation that should include a study of the rail industry's structure, which Network Rail dominates as the owner of the system with sole responsibility for maintenance and engineering work.

The transport secretary, Geoff Hoon, today left open the option of a joint public inquiry into Grayrigg and Potters Bar. The inquest into the Potters Bar crash was suspended last year pending the outcome of the investigations into the Grayrigg crash. Hoon said today that he would consult victims and bereaved families from both crashes before making a final decision in the new year.

"I consider it essential to ensure that the way forward is one that will deliver closure to those who were affected, as soon as possible," he said.

Hoon added that Network Rail had already taken enough steps to prevent a repeat of Grayrigg, following two reports last year including an internal study by Network Rail in which the company was heavily critical of its role in the accident. Following Potters Bar, Network Rail took all maintenance work in house.

The Office of Rail Regulation (ORR), which has the power to bring criminal prosecutions over rail safety breaches, said it would consider the report "carefully". The RAIB's 29 recommendations included a review of how Network Rail inspects the thousands of points used across the rail system.

So far the ORR has ordered Network Rail to make two changes to its maintenance and safety regimes since the Grayrigg crash. The first, which demanded better organisation of track inspections, has been carried out, but the second, that Network Rail should change the design of certain points, is being challenged by Network Rail.

The RAIB today condoned the ORR's concerns over so-called groundframe points and ordered Network Rail to modify their design. It added that similar recommendations following Potters Bar were not implemented and could have prevented the Grayrigg crash from happening.

The RAIB has also ordered the Rail Safety and Standards Board to review its study into whether safety belts should be installed in trains. The RSSB has concluded that they will make a minimal difference and are too expensive but the RAIB say the circumstances of Grayrigg warrants a re-examination of its conclusions.

Iain Coucher, the Network Rail chief executive, said the company was "devastated" by its failings over Grayrigg. "Travel by rail is the safest form of travel and despite Grayrigg, the railways are safer than ever before. It is important that the rail industry seeks ways to make it safer still and this report should help that process," he said.

A Network Rail employee is still on bail after he was arrested as part of a British Transport police investigation into the crash.

RMT renews call for inquiry into Grayrigg and Potters Bar crashes

RMT: October 23 2008

BRITAIN’S BIGGEST rail union today renewed its call for a joint public inquiry into the Grayrigg and Potters Bar rail crashes after today’s publication of the Rail Accident Investigation Branch report into the Grayrigg derailment.

RMT notes that today’s final report, as expected, puts systematic management failings, lack of resources and imposition of unrealistic workloads at the heart of the Grayrigg derailment, which claimed the life of Margaret Masson and injured 86 other people in February 2007.

Similarities between the two crashes, and the coroner’s decision last year to adjourn the inquest into the seven deaths at Potters Bar in 2002 pending the outcome of the Grayrigg investigation, highlight the need for a joint public inquiry – with a remit that includes examination of the structure and continued fragmentation of the industry.

The union also renewed its call for an apology from the British Transport Police for keeping two of its members under caution over Grayrigg “without the slightest reason” for eleven months.

“It is now abundantly clear that systematic management failings, lack of resources and the fragmented ‘contract’ culture still prevalent on the railway all played their part in the complex of causes of the Grayrigg derailment,” RMT general secretary Bob Crow said today.

“It is a total no-brainer that there is a link between funding cuts, unrealistic workloads, inappropriate work practices and fragmentation on the one hand and inadequate standards on the other.

“The improvement notice served on Network Rail by the railways inspectorate last year made it clear that experienced track-inspection staff were being hampered by inadequate management of the inspection regime across the network.

“A second improvement notice – which NR is appealing against – requires action on the design, installation and maintenance of points across the network

The report also points out that procedures ‘inherited’ from the private sector continued

“The report points out that staff had complained before the crash at the lack of track access due to timetable changes, and that hard-pressed staff were forced to squeeze too many inspections into a few hours on a Sunday morning.

“It also says that considerable overtime was required to provide the numbers required to undertake and provide lookouts for inspections, and that there ‘may be a link between long hours and performance’

“For Network Rail to attempt, as it did, to point the finger of blame at individuals it managed so poorly was outrageous, and for police to keep two of our members under suspicion of manslaughter for nearly a year without a shred of evidence

“We need an end to the contract culture and inappropriate practices brought in by private contractors and to shift the emphasis from getting things done quickly and cheaply to doing them properly and safely.

“Both the RAIB interim report and Network Rail’s own report have pointed clearly to management failings and lack of resources, and it is those structural failings that still need to be addressed.

“Network Rail’s spending targets have been slashed by 30 per cent over the last five years and we have raised concerns about the workloads placed on individuals on a number of occasions.

“Those are the problems that need to be resolved, and we believe there still needs to be a joint public inquiry into Grayrigg and Potters Bar with a remit that includes the structure and continued fragmentation of the industry,” Bob Crow said.


October 23, 2008

RMT welcomes return of Metronet staff to London Underground

RMT: October 23 2008

LONDON UNDERGROUND’S biggest union RMT today welcomed plans to transfer the workforce at failed public-private partnership company Metronet back to LUL.

In a letter to RMT general secretary Bob Crow, Metronet Rail chief executive Andie Harper confirmed that a consultation over the TUPE transfer will soon be underway and that he hoped the process would be completed by December.

“RMT has been pressing for this measure all along and welcomes Metronet Rail’s move as a victory for common sense,” Bob Crow said today.

“It is another small step on the road for a properly integrated transport system for London after the disastrous experiment with PPP. Next up, Tubelines’ operations should be brought back in-house.”


Notes to editors: Metronet is responsible for maintenance on nine London Underground lines. It came under the control of Transport for London this May after going into administration in July 2007.

Wolverhampton MP calls for nationalisation of railways

Birmingham Post: Oct 23 2008
By Jonathan Walker, Political Editor

The nationalisation of the banks should be followed up by re-nationalising the railways, an MP has claimed.

Rob Marris (Lab Wolverhampton South West) called on the Government to take Britain’s rail services back into public ownership, following warnings that West Midland passengers faced more overcrowding in carriages.

The National Audit Office, the official financial watchdog, has published a report predicting that passengers can expert packed carriages and higher ticket prices. It highlighted the example of London Midland, which was given permission to carry more passengers on overcrowded trains when it took over its franchise last year.

The Department for Transport agreed to increase the number of commuters the firm could force to stand, by changing the definition of “full standing capacity” from 163 people to 191.

The change came in when Govia, the company behind London Midland, took over the franchise for services between London, Birmingham and Liverpool from Silverlink.

But the NAO warned that passengers on other services would also see services deteriorate when their franchises changed hands.

Mr Marris urged ministers to consider another option – and simply take over running the trains directly, when existing franchises come to a close. It would mean the West Coast Main Line would be taken into public control when Virgin’s franchise expires in 2012.

Speaking in the House of Commons, Mr Marris said: “May I suggest that with the £15 billion of investment, and to try to increase rail line speeds and reduce train congestion, we should nationalise the railways, just as we are nationalising the banks, by not renewing the franchises as they fall due?

“Many of those franchises, just like the banks, are bankrupt and would not be operating except for huge Government subsidy. Let us move the railways back into state ownership. What are his views on that?”

Transport Secretary Geoff Hoon insisted the train operators had helped improve services. He said: “I am sorry that he takes that view of the contributions that have been made by train operating companies.”

Mr Hoon highlighted improvements he said had been made to the Midland Mainline, which runs from London to Sheffield via the east Midlands, stopping at Leicester.

He was challenged by Conservative Shadow Transport Secretary Theresa Villiers, who urged him back a new high speed rail line.

The Conservatives announced plans at their party conference in Birmingham for a high speed rail link between Manchester, Birmingham and London.

She said: “The Government’s response to congestion on the midland main line and the rest of the network is wholly inadequate and painfully slow”

October 22, 2008

Scott Wilson wins Crossrail overground contract

CN: 21 October 2008
Andrea Klettner

Scott Wilson Group has won a £9.8 million contract from Network Rail to provide designs for the above ground sections of the Crossrail project.

A range of design options will be produced to transform the current above ground rail network into one capable of running Crossrail's new trains.

The designs will be the basis of Network Rail's entire £2.3 billion contribution to Crossrail.

Scott Wilson will address the routes west from Paddington to Maidenhead and east from Stratford to Shenfield and will include track, civils, buildings, overhead electrification and telecommunications work.

Design work will begin immediately and a range of options will be produced to allow a single option development in early 2010.

See also:

Network Rail picks Scott Wilson for Crossrail design role

Transport Briefing: 21/10/08

Engineering consultant Scott Wilson has bagged a £9.8m contract to design stations and other structures on the above-ground sections of the Crossrail route.

Network Rail has chosen the company to draw up plans that will form the basis of the infraco's £2.3bn contribution to the Crossrail project. Network Rail is responsible for most of the enhancement works required on the western section of the route between Maidenhead and London Paddington and on the north eastern stretch from Stratford to Shenfield. Transport for London is overseeing the central London section of the route, which will run undeground.

Scott Wilson says a range of design options will be produced to transform the current above ground rail network into one capable of running Crossrail's new services. The contract covers track, civils, buildings, overhead electrification and telecommunications. Work will begin immediately to allow a single option to be selected in early 2010.

The contract announcement comes as the Crossrail project gathers momentum ahead of the start of construction. At the end of last week London's Astoria music venue and 12 other properties were issued with compulsory purchase orders to allow buildings to be demolished to allow the creation of a Crossrail station alongside Tottenham Court Road Tube (Transport Briefing 20/10/08). At the weekend Chancellor of the Exchequer Alistair Darling said large infrastructure projects including Crossrail could be "reprioritised" to allow them to be delivered ahead of schedule.

Hugh Blackwood, Scott Wilson group chief executive, said: "Scott Wilson is delighted to bring our expertise to this challenging project for Network Rail, our principal rail client. We look forward to collaborating with them to help deliver the Crossrail programme, which will greatly enhance public transport in London."#

See also:

Scott Wilson reports robust results, despite economic downturn

New Civil Engineer: 21 October 2008

Crossrail contract work has helped boost Scott Wilson's results

Consultant Scott Wilson Group has today reported overall "robust" demand continuing for its multidisciplinary services, despite recent economic turmoil.
In a pre-close statement, in adance of six monthly results to be announced in December, it says that in both the UK and internationally, trading has remained "in line with mangement expectations".

The company attributes a continuing firm workload primarily to the long term nature of the projects it carries out in infrastructure development, enhancement and replacement where budgetary planning extends years into the future.

It has won new or extended orders for a significant number of such major projects in the last year it adds, with a strong order book including schemes such as Manchester Waste, East London line and London Gateway Port in the UK. A new £9.8M consutlancy value contract for above ground design on the Crossrail project has just been awarded by Network Rail.

The international contribution is growing in significance says the firm. Orders include national highway projects in India and Sri Lanka, power porjects in Greece, Qatar, Indonesia and Pakistan, and the Grand Mosque in Bahrain.

The company had organic growth of over 10%, and is also integrating activities from three acquistions: Benaim, Terence Lee Partnership and Strategic Leisure.

Unions show new appetite for rail reform

SMH: October 21, 2008
Linton Besser Transport Reporter

RAIL maintenance reforms announced yesterday by the Premier, Nathan Rees, were conceived by the union movement to prevent the poorly performing RailCorp maintenance yards being sold to the private sector.

The deputy assistant secretary of Unions NSW, Matt Thistlethwaite, confirmed last night that rail unions had urged the Government to reopen negotiations over the future of the public maintenance yards that had been abandoned by frustrated RailCorp executives.

"We took to RailCorp the idea of having one more go [because] there was talk of having it privatised," Mr Thistlethwaite said.

"RailCorp ignored it for a month or so [and] then they took back control of RailCorp, and the first thing they did was bring the proceedings back on."

Mr Rees said yesterday that after he was delivered a "mandate for change" in the weekend's disastrous byelection results, he would give the rail unions and RailCorp management until March to lift dramatically the standard of government-run maintenance depots

CityRail fleet breakdowns account for about 30 per cent of the network delays suffered by commuters. Reviews this year found RailCorp spends 35 per cent more than the private sector on rolling stock maintenance, but the trains break down three times more often.

Mr Rees said the Government had failed to act on proposals dating back to 1997 to reform "dinosaur-like" work practices at the depots but that "people were never kept to their word".

"Over the past couple of weeks, we've grabbed the too-hard basket and tipped it upside down," he said. "One of the first things that fell out was rail maintenance.

"What we have said to the unions, and what we have said to management, is that you have until 31 March 2009 to get this house in order … This is a demonstration of how serious we are."

Mr Rees and his Transport Minister, David Campbell, said they would appoint an independent auditor to benchmark private sector yards and that an agreement on how to achieve those benchmarks must be struck by March 31.

But a statement released by the Industrial Relations Commission late on Friday said: "The unions proposed that the parties agree on the engagement of an external consultant to develop a skills matrix modelled on best practice in the industry."

Any changes in the yards will only begin after March, the statement reveals. The Government has asked the unions, as well as RailCorp, to suggest consultants they would like to undertake the audit.

The Government would prepare "tender documentation" if both parties fail to meet the deadline, Mr Rees said.

Negotiations broke down last year over reforms that had to be instituted over 100 days at RailCorp yards at Hornsby, Flemington and Mortdale, after two spectacular train breakdowns on the Harbour Bridge.

A review by Boston Consulting Group said improved maintenance "could reduce fleet breakdowns by up to 50 per cent".

See also:

Sack maintenance foremen, urges review

SMH: October 22, 2008
Linton Besser Transport Reporter

ALL 50 maintenance foremen at CityRail workshops should be sacked and told to reapply for new supervisor roles as part of tough industrial reforms recommended in a report to the State Government that has so far been ignored.

The Keith Clark review into train maintenance was commissioned by RailCorp in August last year after two train breakdowns on the Harbour Bridge prompted the former RailCorp chief executive, Vince Graham, to condemn the organisation's "lack of a maintenance culture".

The report was furnished in October but it was released yesterday by the new Rees cabinet, a day after it revealed reforms to rail maintenance would be delayed until March next year under a new agreement with unions.

It recommends new industrial agreements that force multi-skilling without bonus payments and the wider use of contractors. "The current culture of low employee engagement, lack of trust between employees and managers and poor discipline in complying with polices and procedures has to change," it says.

The Opposition transport spokeswoman, Gladys Berejiklian, said that the report should have been acted upon 12 months ago.

"The report confirms that nothing has been done to address the problems regarding rail maintenance since 1997.

"This requires immediate and urgent attention otherwise public safety is compromised."

The report says all rosters should be reviewed and a new system introduced to record all work undertaken by each employee. "The capture and recording of man-hour bookings will allow each of the depots to [assess] their overall performance against others in the marketplace."

The "step change" that was needed in the depots would only be possible with the strengthening of depot management, the report says, "with increased responsibility and accountability".

For this, the current foremen should be replaced with a new supervisor that could be a "management/contract" position, who would be responsible for driving through the controversial industrial changes.

The Transport Minister, David Campbell, said that RailCorp and the unions had failed to reach an agreement on the issues identified in the Clark report.

"This is why the Government has taken action … which has led to an agreement on maintenance reforms."

See also:

Union boss recruited to fill Costa's old seat

WA Today: October 18, 2008
Andrew Clennell, State Political Editor

The man who helped bring down Morris Iemma by helping to defeat electricity privatisation, the Unions NSW boss, John Robertson, will take the former treasurer Michael Costa's upper house seat after frantic lobbying from the Premier, Nathan Rees.

The Right faction of the ALP was set to endorse Mr Robertson for the casual vacancy last night after Mr Rees promised him a ministry at some stage "down the track", party sources said.

One party source said Mr Robertson, an architect of the anti-Work Choices campaign during the last federal election, had "changed his mind a million times" but finally acquiesced.

Mr Rees is said to have been concerned at the quality of candidates coming into parliament for the Right - including the candidates for Lakemba and Cabramatta who stand today, Robert Furolo and Nick Lalich. Mr Rees also wanted a higher-profile upper house candidate than whom the party had come up with - the Rockdale councillor Shaoquett Moselmane.

The decision to recruit Mr Robertson prevents Mr Moselmane from becoming the first Muslim in the NSW parliament, as he had been lined up for the seat.

Mr Robertson said last night in a statement it had been a "very difficult decision".

The irony of Mr Robertson replacing Mr Costa after he had helped scupper his career early by leading the charge against electricity privatisation was lost on Mr Costa last night. He said he had previously offered Mr Robertson the seat.

"He should take it. I think it's the right spot for him," Mr Costa said.

Mark Lennon is expected to replace Mr Robertson as Unions NSW secretary and Mr Robertson's other assistant Matt Thistlethwaite will replace Karl Bitar as secretary of NSW Labor, with Mr Bitar to become national secretary of the party.

October 21, 2008

SNCF chief puts whole of Europe on his timetable

Financial Times: October 21 2008
By Robert Wright, Transport Correspondent

France's national train operating company needs to expand and treat the whole of Europe as its domestic market amid the sector's rapid consolidation, its chairman has said.

The comments by Guillaume Pépy in a Financial Times interview come after SNCF this month took a 20 per cent stake in NTV, Europe's first purely private high-speed train operator, which plans to operate between Rome and Milan. SNCF, which is wholly state-owned, has also this year acquired the shares it did not hold in Geodis, a logistics operator.

Mr Pépy's comments make clear the extent to which SNCF plans to mimic Germany's Deutsche Bahn, which has bought multiple logistics and rail freight operations across Europe, as well as the operator of the UK's Chiltern Trains passenger service.

"This industry is going to be consolidated, exactly as the airline industry has been consolidated during the past 20 years," Mr Pépy said. "So [the task] is proposing our benefits to other countries or to other companies and build the European rail service which doesn't exist today."

In his first interview with an English-language newspaper since taking office in February, Mr Pépy put the need to expand down to the growing competition SNCF faces. SNCF has faced competition in international rail freight to and from France since 2005 and within its domestic market since March 2006. It will face competition in international passenger services from January 2010.

Mr Pépy expects to face competition in French regional rail services, where the Alsace region is exploring the possibility of running a competition to find an operator for local subsidised services. The region, like others in France, at present has to use SNCF.

"In all the different segments of our businesses, up to now we have let's say 20 to 25 per cent of our businesses which are deregulated already," Mr Pépy said. "But I would assume that in the next three to four years it's going to be nearly 90 to 100 per cent deregulated businesses." The company would have to become more competitive, improving customer service and cutting costs, he said. The company's horizons would also need to change.

"Europe is the domestic market of SNCF," Mr Pépy said. The most immediate challenge remains SNCF's freight operation, which lost €200m ($266m) on €2.94bn revenue in 2007. The operation, whose restrictive practices make it highly inefficient, has lost market share to cheaper, more efficiently-run competitors such as Deutsche Bahn's Euro Cargo Rail and Veolia Transport's freight operation. After failing to reach agreement with its unions on reformed working practices, the company has sought volunteers to work under new conditions. About 800 drivers - 20 per cent of the freight operation's total - are due to work from December 14 under the arrangements, which will increase their pay and the time they spend driving.

"We're negotiating a new balance of interest between the unions and the company," Mr Pépy said.

The challenge for passenger services was less acute because passenger rail competed better against cars than rail freight could against trucks.

"That doesn't mean we're going to do nothing, but it's not the same kind of emergency," he said.

There would be particular pressure on regional domestic services from competition. Even where it has retained contracts, Germany's Deutsche Bahn has been forced to accept lower subsidies for services whose operation has been put out to tender by regional governments.

"The question we're going to face is, 'Are you able to provide more public service with less money?'" Mr Pépy said. As well as taking the stake in NTV and taking over Geodis this year, SNCF has also been in detailed negotiations with Freightliner, the UK's number two rail freight operator subsequently bought by Bahrain's Arcapita, and came close to taking a stake in Italy's Ferrovie Nord Cargo since acquired by Deutsche Bahn.

A small number of Europe-wide operators would emerge from the current process of liberalisation and consolidation, Mr Pépy predicted.

"For the moment, everybody is discussing with everybody," he said. "We're talking with dozens and dozens and dozens of colleagues, just to see. Co-operation, competition, alliance, joint venture - all kinds of strategies are imaginable."

However, Mr Pépy doubted SNCF's own ownership would change. There is no public debate about the possibility of even a partial privatisation such as is planned for the train operating arm of Deutsche Bahn.

"This is a shareholder issue," he said. "But what I do know from my shareholder is that it's not on my mandate. It's not on my road map and my road map is a five-year road map."

Operator lines up cross-border partnerships

One of the most remarkable signs of SNCF's new determination to compete across Europe was its announcement, on October 9, that it was taking a 20 per cent stake in Italy's NTV, a private company formed by senior Italian business people that will be Europe's first privately owned operator of high-speed trains. The company will run a fleet of new French-built high-speed trains between Rome and Milan in competition with state-owned Trenitalia.

Mireille Faugere, director general of Voyageurs France Europe, the SNCF division that handles long-distance passenger traffic, says its expertise can improve the services of companies in which it makes such investments.

The investment is part of SNCF's preparation to face competition in international high-speed rail once European legislation forces governments to allow it from 2010. Air France has already announced it plans to offer high-speed rail on international routes, while there is also speculation Germany's Deutsche Bahn might start running to London in competition with Eurostar, the Franco- British-Belgian operator mainly owned by SNCF.

However, Ms Faugere is sceptical that there will be many routes with enough traffic for high-speed operators to run in direct competition with each other. Instead, she expects SNCF to continue pursuing its present model, where it co-operates with railways on cross-border, high-speed traffic. "Co-operation is not old-fashioned," she says.

See also:

Threat from private-sector rivals

Financial Times: October 21 2008
By Robert Wright

The problems posed for SNCF by private-sector competition are summed up by the freight division, which has lost out to private competitors willing to offer better prices and faster, more reliable service, writes Robert Wright in London .

At the heart of its problems are restrictive practices - particularly unions' insistence that each locomotive can travel only a set distance from its home depot. Single locomotives consequently seldom haul trains for their entire journey and trains frequently spend long times in sidings at the change-over points between locomotives.

People involved say that Le Gouessant, a cereal producer which became the second-ever customer to start using Euro Cargo Rail, abandoned SNCF because its trains were frequently lost for such long periods in rail yards that the cereals would be ruined.

A direct appeal from management to drivers in the freight division has produced 800 volunteers to try a new operating system meant to do away with such practices. Managers hope the example of the volunteers - who will earn more - will encourage other drivers to drop their opposition to reforms.

However, SNCF is also concerned, like other state railways, that it faces major disadvantages in the competition with private operators.

SNCF still operates a single wagon-load business, offering smaller shippers the opportunity to move small loads in trains formed out of many different companies' goods. Such trains' handling costs are so high that most European countries either long ago abandoned the traffic or subsidise it heavily. SNCF's private competitors have no such business weighing them down.

Pierre Blayau, chief executive of the transport and logistics division, says the difference in charges facing SNCF and its private competitors skews the competition.

"Competition is a good thing," he says. "But the question is, if you look at the competition, if it's fair competition."

October 20, 2008

Now can we nationalise the railways, too, please?

London Evening Standard: 20.10.08
Andrew Gilligan

OH DEAR. The High Court of Conventional Media Wisdom may has ruled that Gordon has rescued his premiership but from the latest polls, at least, it looks as if someone forgot to tell the voters.

After a week when Mr Brown has barely been off the TV, saving the world, ComRes in the Independent on Sunday showed the Tories nine points ahead, with a modest two-point boost for Labour over its previous Independent poll, and a one-point fall for David Cameron. YouGov in today's Mirror has a one-point increase for Labour. Another firm, BPIX, regarded as less transparent and reliable by experts, put the Tories no fewer than 16 points clear, three up on its previous poll.

It's true that public opinion is like an oil tanker it takes a long time to turn. It's true that the Tory lead in most places is half what it was last month. And it's also true that the very important news narrative is pro-Brown; even yesterday's ComRes, which must be rather disappointing for Labour, was reported by the Independent on Sunday as having "slashed" Cameron's lead.

But, for the moment, even such shamelessly crowd-pleasing moves as the return of Peter Mandelson, let alone taking control of the banks, have failed to produce quite the rewards many were expecting. So in the spirit of helpfulness for which I'm renowned, may I suggest another state power grab which might be more popular.

Now is the moment to renationalise the railways and it has never been cheaper or more possible. Rather like the banks, many of the companies which hold Britain's rail franchises will soon become disastrously over-extended. They have contracted to pay massive sums to the Government for the right to operate trains, assuming that passenger numbers would continue to grow strongly and that fares could continue to rise well above inflation.

In a recession, both those assumptions look highly questionable but the Government has said that franchises will not be renegotiated. What that means, if ministers stick to their guns, is that some of the most justly hated companies in Britain First Great Western, Virgin Trains, SWT will have no option but to give back the keys. The franchises will revert to the state, and it won't cost taxpayers a penny.

The stations, tracks and signals are already in public hands. And thus, with a few exceptions, we could restore the railways to single ownership, a single command structure, and sanity. The only thing holding ministers back is their terror of the N-word but after spending £37 billion on partly nationalising the banks, that Rubicon has surely been crossed.

Last week, in recognition of a crisis even more serious than the economy's, the Government announced a new target of reducing C02 by four-fifths. If we are to meet it, one absolute necessity is a railway that runs as an integrated network, that functions seven days a week and that does not charge you more than it costs to travel by car.

Nice work on the banks, Gordon. But renationalising the railways would mark the real death of discredited Thatcherite neo-liberalism, and millions of commuters would thank you for it.

October 18, 2008

RMT and TSSA to ballot members at Arriva Trains Wales over pay

RMT: October 13 2008

BRITAIN’S TWO biggest rail unions are to ballot more than 1,100 workers at Arriva Trains Wales for industrial action over a pay offer they say is unfair and fails to tackle the problem of low pay or to share with the workforce the financial success it has brought the company.

RMT and TSSA are to urge members in all non-driving grades across the company to vote for action after the company failed to increase a pay offer already rejected by both unions by massive margins.

The ballots, which both open on Wednesday (October 15) will close on October 28, and the two unions will co-ordinate industrial action if the company fails to table an acceptable offer.

“Arriva Trains Wales has not long handed its shareholders £14 million in dividends but it is the workforce that creates its profits and it is time for them to get a fair share in the fruits of their success,” RMT general secretary Bob Crow said today.

“This is the second year in a row that lower-paid grades have been asked to swallow a smaller rise, and our members are telling us they have had enough.

“It is obscene that while ATW is paying directors £230,000 we have reps who have had to go to the Low Pay Commission to discuss the problem of poverty wages at the company,” Bob Crow said.

Manuel Cortes, TSSA assistant general secretary, said: “Our members are very upset that they are being asked to take a lower pay rise than other employees at Arriva Trains Wales.

“We all contribute to the success of the company and we should all receive the same rewards. This is unfair and it should not happen.”


Notes to editors: ATW’s offer to non-driving grades of 4.75 cent this year and RPI plus 0.75 per cent in 2009 was rejected by 77.2 per cent in a TSSA consultative ballot, and by 554 votes to 31 in an RMT referendum.

In the year to December 31 2007 ATW made a pre-tax profit of £11.9 million, paid out shareholder dividends of £14 million, and paid its highest-paid director £230,000.

See also:

Rail workers' ballot in pay row

BBC News: 13 October 2008

More than 1,000 railway workers are to be balloted for industrial action in a fresh row over pay, threatening disruption to passengers.

Two unions claimed lower paid workers at Arriva Trains Wales were being asked to "swallow" a two-year pay offer which was smaller than that to other staff.

Arriva Train Wales said it was "extremely disappointed" but would work to resolve the matter.

It said the offer compared favourably with the rest of the industry.

There was a 24-hour strike by train managers in south and west Wales last month.

The Rail Maritime and Transport Union (RMT) and the Transport Salaried Staffs Association (TSSA) announced the ballot on Monday.

They said the proposed pay deal of 4.75% this year and the rate of inflation plus 0.75% in 2009 to non-driving grades was worse than a pay rise given to other employees at the company.

"We all contribute to the success of the company and we should all receive the same rewards" - Manuel Cortes, TSSA

Bob Crow, general secretary of the RMT, said: "This is the second year in a row that lower paid grades have been asked to swallow a smaller rise and our members are telling us they have had enough.

"Arriva Trains Wales has not long handed its shareholders £14m in dividends but it is the workforce that creates its profits and it's time for them to get a fair share in the fruits of this success.

"It is obscene that, while the company is paying directors £230,000, we have to go to the Low Pay Commission to discuss the problem of poverty wages at the company."

Manuel Cortes, assistant general secretary of the TSSA, said: "Our members are very upset that they are being asked to take a lower pay rise than other employees.

"We all contribute to the success of the company and we should all receive the same rewards."

Voting will close at the end of the month and the two unions said they will co-ordinate any industrial action.

In September, Valley Lines services and those in west Wales were badly disrupted by a 24 hour official strike by train managers at Arriva Trains Wales.

Some train crews supported the strike.

Arriva Trains Wales human resources director Dennis Baker said he was "extremely disappointed".

He said the offer was 4.75% for the first year, or £750 whichever is the greater, as well as enhanced maternity benefits.

"The basic pay increase is exactly the same as that offered to other employees in the company except for the £750 minimum payment which was specifically designed to give enhanced benefit to those on lower pay," he said.

"We would like to make it very clear that all our employees are paid significantly above the statutory minimum hourly pay rates and would not be covered by the Low Pay Commission.

"At a time of extreme challenge in the UK economy we are offering a pay increase that compares favourably with the rest of the transport industry. We will continue in our efforts to resolve this matter and trust that our employees will recognise the value of our offer."

October 17, 2008

Australian transport unions to join forces

AAP: October 15, 2008

AUSTRALIA'S major transport unions are joining forces to present a united front over industrial issues relating to the nation's biggest infrastructure projects.

Meeting in Brisbane today, representatives of the Maritime Union of Australia (MUA), Transport Workers' Union of Australia (TWU) and the Rail Tram and Bus Union (RTBU) said they would form the Transport Unions' Federation (TUF) early next year.

The TUF will have a combined membership of about 120,000, but the unions have no immediate plans to amalgamate.

The unions said they wanted to co-operate with governments and industry without the complications of amalgamation.

TWU national secretary Tony Sheldon said the new federation was crucial as billions of dollars of infrastructure projects were expected to begin soon as the government responds to the global financial crisis.

"The federation is critical to bring together all modes of transport - sea, ports, road, rail and airlines - into a format which will make sure we get the right sort of infrastructure, the right sort of conditions right across our industry,'' Mr Sheldon said.

NZ rail boss outlines $1 billion spending plans

National Business Review: October 17 2008
by Allan Swann

New Zealand Railways Corporation acting CEO, William Peet, has laid out his roadmap for the country’s rail, throwing a few surprises into the mix.

Speaking at the Waikato Transport Summit this week, he laid out a clearer picture of how the $1 billion set aside for his state-owned enterprise would be spent over the next five years.

Mr Peet was appointed acting chief executive officer of the New Zealand Railways Corporation in October 2007 following the re-nationalisation of the rail sector.

Finance Minister Michael Cullen announced the government’s purchase of Toll NZ for $690 million in May 2008.

It was renamed KiwiRail, and with Ontrack and other entities now fall under the New Zealand Railways Corporation as subsidiaries.

Mr Peet summed up the birth of the entity succinctly, “we can’t shed costs faster than revenue.”

He was referring to the various stages of stalled infrastructure spending and funding on rail over the years, to justify the subsidies his corporation needed.

Controversy has stemmed from protectionist rules introduced to favour the newly formed company that effectively limit freight competition from the trucking companies.

They include the limiting of road tonnage and competing freight routes along rail corridors.

Of the $1 billion over five years, only $121 million is available this year, on top of the $80 million for Tranz Scenic lines to tidy up its operations.

The long-term plan is to spend the $1 billion on a new series of high power, double headed locomotives, rehabilitation of the railway network, the construction of freight hubs and IT upgrades.

“By 2010 we hope to be relatively stable,” Mr Peet said. He also stressed that all spending of these funds would decided by the NZRC board, not the government: “there will be no pork barrel spending here.”

NBR understands there has been a suggestion from Dr Cullen’s office that the company may not have access to the full $1 billion and that the company may be pushed towards self-sufficiency well before the five-year term is up.

If there is, Mr Peet isn’t showing the look of a chief executive under pressure, even if he is only in the acting role at present.

“Look, we’re not just here to talk about how great rail is, we’re about action. Judge us by our actions,” he said.

Mr Peet believes that long term in a post-Kyoto, post-ETS world, carbon emissions mean that rail is really the only way to go in the long term.

He estimates rail is three to seven times more efficient than road transport, which is congested and approaching capacity with little hope for viable expansion.

Rail, on the other hand, he believes is “under-utilised,” noting that huge spends on highway upgrades to the North and West of Auckland are significantly more expensive than the $1 billion rail upgrade.

Mr Peet did joke that the Northern Expressway will one day become rail.

“We’re happy for them to run the busway till it chokes up, then they’ll come to us and look at rail,” he chuckled adding, “it’s a great corridor, and corridors are our right to exist.”

The system currently moves 14 million tonnes nationwide, and is focusing on expanding its corridors by double tracking north of Hamilton. The goal of the infrastructure build is to produce reliability – “its our first goal” – rather than being overly ambitious.

At this stage the railway network between Auckland and Hamilton can carry 56.5 tonnes. He’s aiming for 62 tonnes, once the first round of upgrades are complete.

In terms of the growth in rail-based freight, Transport Engineering Research New Zealand believes that it will increase 100% by 2020, and the recently released National Freight Demands Study pegged 75% growth by 2031.

Another problem getting focus is the 19 wooden bridges on the network that need to be “blown up” and rebuilt.

“They’re just not a good look for a modern railway,” he laughed.

Electrification of the freight lines is not on the cards. The capex required to electrify the network meant that the benefit cost per tonne wasn’t better than what they were achieving currently.

While confident commenting on rural lines, Mr Peet conceded that the Auckland metro upgrades would be nowhere near as easy; although he does believe that electric passenger rail from Auckland to Hamilton will be possible “much sooner than many people think.”

The company is one to two months into its electrification project to Papakura, and as he put it, “When we get that far, we’re going to ask ‘do you really want us to stop here?’”

October 16, 2008

Government plans national firm to boost rail transport

Business 24/7: October 16, 2008
By Ashaba K Abdul Basti

No - not Gordon Brown - The United Arab Emirates Government will soon create a national railway company to help popularise the concept of rail transport across the country.
Dubai Metro, now under construction, is likely to be integrated with the UAE national railway line. (DENNIS B MALLARI)

The move will create a body to oversee railway projects and help rail transport become an alternative mode of transport for moving both passengers and freight amidst the growing road traffic congestions in UAE.

The National Transport Authority (NTA) in Abu Dhabi has already approved the formation of the company and a ministerial decree on it is likely soon. "We are expecting a decree any minute to create a national railway company," Abdulla Salem Al Katheeri, Director of Land Transport Department at the NTA told Emirates Business on the sidelines of the MEED rail projects 2008 conference in Dubai. "The firm will help drive the concept of railway transport to all emirates."

The new national company will draft laws and policies to create a comprehensive strategy for railway transport in UAE. It will also set conditions for ensuring quality in railway lines across the country.

The idea to create a national company stems from the ongoing drive to create a UAE national railway line that will link all the emirates. The line, both for passenger and freight transport, will also be linked to the planned 1,200km GCC railway network. "The UAE realises the importance of integrated transport to keep in pace with the growth in the economy and population. Railway transport is very essential in freeing up traffic by reducing congestion as well as accidents," said Al Katheeri.

Feasibility studies for the 800km UAE railway line, conducted by a consortium of German railway companies, had been completed but these had to be changed due to new major developments taking place. The announcements for construction tenders are expected once the railway company is established.

"Once the company is created, it will help us to speed up the process of creating a UAE national railway line. Already alignments in the Abu Dhabi have been completed," Al Katheeri said.

Both the UAE and GCC railway lines are expected to bolster the region's position as a fast growing global logistics hub by providing connectivity between the various GCC ports that have seen a 20 per cent annual increase in container handling.

While no official cost for the railway project has been announced, experts had earlier estimated the network will cost about Dh10bn. Abdul Redha Al Hassan, Director of Planning at RTA's Rail Agency, said that Dubai Metro is likely to be integrated with the national railway line. But because of changes resulting from major developments, a consultant would be appointed to study the possibility of aligning the two transport systems.

Rail franchising ‘efficiency’ being paid for by passengers says RMT

RMT: October 15 2008

System gives ‘guaranteed, risk-free profits’ at public expense, says union

RAIL FRANCHISING remains a fundamentally flawed system that delivers profits to private train operators out of proportion to any risk they take, Britain’s biggest rail union says today.

As the National Audit Office reports that the government has squeezed ‘better value for money’ out of the system, RMT warns that if rosy predictions of passenger growth fail to materialise then both taxpayers and fare-payers will have to make even bigger handouts to private rail bosses.

“The government has made franchising look more efficient because it has been shifting the burden of subsidising franchisees’ profits from the taxpayer to the fare-payer with inflation-busting fares increases,” RMT general secretary Bob Crow said today.

“The prediction of a huge fall in subsidy is based on sharp and sustained increases in passenger numbers, but if they fail to materialise in the current economic climate it will be passengers and taxpayers who will have to fork out.

“The agreements many TOCs have with the government mean that if passenger numbers don’t rise in line with the predictions it will be the government that picks up the bill for up to 80 per cent of the shortfall.

“That means the public will continue to be exposed to the risk while the private operators get to cream off the profits – and if it all goes wrong they just walk away leaving the rest of us to pick up the tab.

“The audit report makes much of the increase in capacity to be brought by 1,300 extra carriages, but that is nowhere near enough to cover existing demand, let alone the increase in capacity the economy and environment need to see.

“Less than two years ago the Transport Select Committee concluded that rail franchising delivers only fragmentation and short-term thinking, and that no amount of tinkering could resolve the fundamental flaws in the system.

“Rail investment is now more than three times more expensive than it was in BR days, while train services are less reliable, fares are the most expensive in Europe and stations all too often left decaying, unstaffed and in darkness.

“The huge sums of taxpapers’ and fare-payers’ money already going into the railways should be spent on improving them, and bringing rail operations back in-house would be a massive step towards ensuring that that happens,” Bob Crow said.

Train standing at Platform 1 is not overcrowded, it's 'acceptably loaded'

The Times: October 15, 2008
Ben Webster, Transport Correspondent

Among the passengers crushed into the corridors of commuter trains, the Department for Transport’s latest solution for rail overcrowding is unlikely to provoke spontaneous applause.

Officials have found a way of reducing the number of trains deemed to be overcrowded without requiring any passengers to get off and without adding a single seat.

They have achieved this by changing the definition of the “acceptable loading of passengers on trains”.

Under the old standard, used in the West Midlands and some other parts of the country, it was considered acceptable to have ten people standing for every hundred seats. The new national standard, which will apply to all routes, has tripled the acceptable number of standing passengers to 30 per 100 seats.

The department said that its loading standard assumed that each standing passenger would have 0.45 sq m of floor space: any less and the train would be officially overcrowded.

Centro, the public transport authority in the West Midlands, has complained to the National Audit Office (NAO) that the new definition would result in even worse conditions on trains in the region and encourage people to travel by car.

Despite being easier to meet, the revised standard is being breached on hundreds of trains each day. According to the DfT, the most overcrowded service is First Capital Connect’s 7.15am service from Cambridge to King’s Cross, which has 76 people standing for every 100 seats.

In a report published today, the NAO said that overcrowding would continue to get worse until the Government fulfilled its pledge, made 18 months ago, to introduce 1,300 extra carriages. To date, only 423 of the carriages have been ordered from manufacturers and none has been delivered.

The department said that it was unable to give details of when the carriages would arrive except to say that they should all be in place by 2014. It was also unable to say to which lines the carriages would be allocated.

Demand for rail travel has been outstripping the supply of extra capacity for the past decade. Passenger numbers have grown by 50 per cent and the amount of freight carried by trains has grown by 60 per cent. But the number of trains has risen by only about 20 per cent. The Government announced last year that it would in- crease capacity by 22.5 per cent in the seven years to 2014. Network Rail has said that this would be inadequate if passenger numbers continued to grow at the present rate of 7 per cent a year.

The NAO, which investigated the value for money of eight train franchises signed by the Government since 2005, said that they all faced “severe capacity pressures on a number of routes, with increasing levels of crowding on peak commuter services, notably to London”. It said that the train companies, encouraged by the Department for Transport, were increasingly opting for “airline-style pricing techniques” to deter passengers from travelling on the most crowded trains.

Virgin charges £215 for an open single in standard class from London to Warrington, but as little as £13 for passengers able to book several weeks in advance.

The NAO said that the Government’s approach of encouraging train companies to maximise income from passengers meant that fares would continue to rise above inflation. It concluded: “Most passengers can expect to pay higher regulated and unregulated fares in the future.”

Edward Leigh, chairman of the Commons Public Accounts Committee, said: “The news that fares are likely to rise above inflation in these difficult times will infuriate many passengers who have no alternative but to travel day after day on packed trains.”

Theresa Villiers, the Shadow Transport Secretary, said: “Excessive government micromanagement of our railways is delaying the delivery of vitally needed capacity enhancements, which means passengers suffer.”

Norman Baker, the Liberal Democrat transport spokesman, said: “People are being forced off the trains and into their cars by unacceptable ticket prices.”

See also:

Railway terminology places passengers at risk

The Times: October 17, 2008

Putting words in our mouths: the redefinition of 'overcrowding' is an outrage

Sir, The Department for Transport has decided that in future a train will not be classed as overcrowded unless it is carrying more than 130 passengers for every 100 seats compared with 110 at present (“Rail misery solved at the stroke of a pen: a new definition of the word ‘overcrowded’ ”, Oct 15).

Over the years, the railways have been responsible for a number of innovative definitions of common words and phrases that mean something different to the rest of us. For example, “on time” or “punctual” can include trains that are up to ten minutes late, despite the likelihood that many passengers will have missed key connections because of the delay. A train is not regarded as “cancelled” if it has completed 50 per cent of its journey, however many passengers are left stranded at the stations on the rest of the route.

Now “overcrowding” has been redefined to mean “packed in like sardines” rather than “a few standing passengers”. Indeed, the railway industry tends to use the term “crowding” rather than “overcrowding” as if to lessen the import of what is in reality a miserable daily experience for many passengers. The sad fact is that the the new definition of overcrowding will be used to determine the need for additional trains as they come on stream, so the trains will not be used to alleviate the new high levels of overcrowding; they will merely perpetuate this situation.

Perhaps the only light at the end of the tunnel is that the oncoming recession will reduce demand for peak train services drastically. For a time at least, those passengers who remain will have more chance of getting a seat —- until, of course, the drop in revenue and subsidy lead to capacity being slashed again.

Michael Patterson
Secretary, Central Rail Users Consultative Committee 1987-97

Sir, Your report was very welcome for the accompanying diagram. This showed that where there are more than six passengers standing within the area between the sliding doors of a modern railway carriage it is impossible for them all to hold on to anything without invading one another’s personal space.

A few years ago I corresponded with a railway company that refused to accept that passenger numbers could be a safety issue unless a train’s undercarriage was overburdened by their weight.

Your item illustrates graphically that a far lower level of overcrowding presents the danger of crushing through inadequately supported travellers becoming loose cannon on a change of speed or direction.

John Harvey
Caterham, Surrey

Sir, Surely redefining the term “overcrowding” will place passengers at an increased risk of injury.

Where are the health and safety police when you need them?

Mark D. Williams

Sir, The proposal to solve rail misery by redefining “overcrowded” does not go nearly far enough. We should abolish such negative adjectives altogether.

I suggest that there could be degrees of passenger density, described as “sociable”, “cosy”, and so on. “Intimate” would mean one sits on seated passengers’ knees. Trains where one might find a vacant seat would be “deluxe” and cost more.

Nigel Macnicol
Greetham, Rutland

Travellers squeezed by fares, warns watchdog

Financial Times: October 15 2008
By Robert Wright, Transport Correspondent

The cost to taxpayers of running the rail system has fallen sharply but at the expense of continuing above inflation fare increases and overcrowding, according to a government watchdog.

Many commuters are also set to suffer more overcrowding until fresh investment provides new carriages on busy routes, warns the report by the National Audit Office, published today. In 2006, the last date for which information was available, trains travelling to and from London at peak times were carrying 3.5 per cent more passengers than they were designed to carry.

Fares regulated by government have been rising by 1 percentage point above retail prices since June 2003, the report adds. There have also been sometimes substantial increases in off-peak fares - including a 20 per cent increase in some fares on South West Trains.

"Although there will be some service improvements, passengers overall will pay more," the report says. "Crowding will increase for many commuters until expected investment delivers more carrying capacity."

The report examines the Department for Transport's hand-ling of competitions to run eight rail franchises, from 2005 to 2007. The franchises were the first let by the DfT after taking over responsibility for the process - where train operators bid to run services on a set route for a set time - from the abolished, semi-autonomous Strategic Rail Authority.

The SRA's abolition and the bringing of the franchising process into the DfT have been deeply controversial in the rail industry, with widespread accusations that the department has been over-prescriptive in the terms set out for franchisees.

The £811m subsidy paid to the eight franchises examined in 2006-07 was projected to turn into a £326m payment from the operators to government in 2011-12, the report says. The franchises involved currently operate as South West Trains, Southeastern Trains, First Capital Connect, First Great Western, East Midlands Trains, London Midland, Arriva Cross Country and National Express East Coast.

Despite falls in payments to train operators, the rail industry still receives an overall government subsidy because of direct payments to Network Rail, owner of the network. But the overall proportion of costs paid by taxpayers rather than fare-payers is set to fall.

The continuing reduction in taxpayers' share of costs depends on continued strong growth in passenger numbers, the report says. Clauses in train operators' franchise agreements protect them from some of the cost of lower-than-expected revenues, just as the DfT gains if revenues are higher than expected.

See also:

Recession could derail government plan to cut subsidies for train firms

The Guardian: October 15 2008
Dan Milmo

• Lengthy downturn would endanger funding
• Rail passengers face more above-inflation fare rises

The government could be forced to pump more cash into the railways if slowing economic growth drives down passenger numbers, the state spending watchdog warns today.

The National Audit Office (NAO) says a planned multibillion-pound cut in rail subsidies will be threatened if train operators cannot deliver the high customer numbers promised in their franchises. Its comments follow a warning by a former cabinet minister that the government may need to recapitalise rail companies if a severe downturn threatens income.

South West Trains, First Great Western and National Express East Coast have promised more than £1bn each to the Department for Transport over the next decade under their contracts to run services along some of the busiest lines.

The NAO becomes the latest organisation to question whether government rail spending plans over the next five years can withstand a downturn. TAS, a leading transport consultancy, has warned that rail funding would be a "serious problem" if there were a long recession because the majority of funds come from ticket sales.

In a report on the rail franchise system out today, the NAO says the DfT could be caught out if passenger numbers fall because the department is expected to make up much of any deficit in franchise payments. "The [franchise] bids assume continued high passenger growth. Slower growth would lead to subsidies falling by less than projected," the report warns.

Last week Peter Hain, the former work and pensions secretary, said the government should draw up contingency plans to rescue troubled rail and utility companies. According to the NAO, government subsidies of eight major franchises that totalled £811m last year will become a net profit of £326m by 2012. However, that assumes SWT, FGW and National Express East Coast will pay a combined total of less than £500m to the DfT in 2012, rising to more than £1bn three years later.

By 2014 the farepayer will be expected to provide three-quarters of funding for railways - a commitment of £9bn a year.

The NAO adds that above-inflation fare increases will remain but the improvements they will fund, including 1,300 extra carriages for the network, will take time to arrive.

Tim Burr, head of the NAO, said: "The Department for Transport has contracted to save the taxpayer money while improving service quality, but it will need to see capacity increases are well managed and timely if passengers are to expect less crowded and more reliable journeys."

Edward Leigh MP, chairman of the public accounts committee, said: "Travelling by rail is still too often an unpleasant experience. The news that fares are likely to rise above inflation in these difficult times will infuriate many passengers who have no alternative but to travel day after day on packed trains."

A Department for Transport spokesman said: "Rail has seen record levels of growth in the last decade and our priority is to address current and future passenger growth."

Theresa Villiers, the shadow transport secretary, warned that overcrowding was also a consequence of civil servants and ministers specifying franchises too tightly. "Excessive government micromanagement of our railways is delaying the delivery of vitally needed capacity enhancements, which means passengers suffer," she said.

Arrested track workers cleared over Grayrigg crash

Construction News: 15 October 2008 09:38
Rhiannon Hoyle

Two track workers arrested over the fatal Grayrigg rail crash have been cleared and will not face any action, the RMT has revealed.

A woman was killed and 22 passengers injured in the incident in Cumbria, which occurred on 23 February 2007.

RMT general secretary Bob Crow said the men were not directly involved in maintenance on points in the area of the accident and neither would face any disciplinary action.

It is understood a third man will remain under police bail until 3 November.

The union criticised the arrests, saying the two men had been living under a "shadow of suspicion" for the best part of a year. Mr Crow said the pair now deserved an apology.

He added: "Both the Rail Accident Investigation Branch interim report and Network Rail's own report have pointed clearly to management failings and lack of resources, and it is those structural failings that still need to be addressed.

"Network Rail's spending targets have been slashed by 30 per cent over the last five years and we have raised concerns about the workloads placed on individuals on a number of occasions.

"Network Rail is still dogged by inappropriate practices brought in by private contractors and there is still too much emphasis on getting things done quickly and cheaply rather than properly and safely."

He called for a joint public inquiry into the Grayrigg incident as well as the 2002 Potters Bar rail accident, with a remit to study the fragmentation of the industry.

An 84-year-old woman from Glasgow was killed when the Virgin train from London to Glasgow derailed at Grayrigg at a a speed of around 95mph.

An initial report by the RAIB found the derailment was caused by a faulty set of points. A later report by Network rail found lapses in the inspection regime, which led to the faults escaping detection.

Rail disaster kills four in Hungary, rail board chairman and minister resign

Budapest Times: 16 October 2008
Written by Robert Hodgson

Driver flees as his train rear-ends another

Four people were killed and another three, one of them a young German girl, were in critical condition after a train crash 30km southeast of Budapest last Monday. Signal failure was initially blamed for the disaster, which prompted the resignation of the chairman of the board of state railway company MÁV and the transport minister.

A local passenger train crashed into the back of a Budapest-bound InterCity train from the eastern city of Debrecen. Residents in Monorierdo reported hearing a loud bang and seeing a cloud of dust and smoke rising over the railway line that runs past the village just before 10.30am last Monday. Rescue workers rushed to the scene and helicopters were called in to carry the more seriously injured victims to hospital.

A spokesman for the National Ambulance Service, Pál Györfi, told the state news agency MTI that two women and one man had died at the scene. By the afternoon, the death toll had risen to four. Several survivors sustained life-threatening injuries and were rushed to hospital. A further two dozen people who were less seriously hurt were given first aid on the spot and taken to hospital for check ups. It was reported the following day that a British woman was among those who sustained less serious injuries.

A spokesman for the state railway company MÁV, Tibor Sigulinszky, promptly admitted that the crash may have been caused by a signalling failure.


Eyewitness reports suggest the InterCity train slowed down or stopped as it approached Monorierdo, and a shuttle train travelling on the same line from Cegléd to Budapest crashed into it from behind at around 70 kilometres per hour. Most of those who sustained serious injuries were travelling in the rear carriage of the InterCity train, although many more were hurt in carriages from the other train as its carriages were derailed.

The MÁV spokesman added that it is thought the driver of the InterCity may have braked legitimately in response to an erroneous stop signal. The driver of the other train survived the crash by rushing to the back of his engine. He subsequently told investigators that he had applied the emergency brakes when he saw the InterCity train ahead, then left his post as there was nothing else he could do.

The area around the crash site was closed off as rescue workers tried to free passengers trapped in the crumpled InterCity carriage and police and MÁV technical staff began an investigation into the cause of the disaster. The “black boxes” of both trains were recovered intact, and should soon cast some light on where the blame for the disaster lies.

Prompt resignations

Within hours of the disaster, Minister for Transport Pál Szabó and the head of board of directors of state-owned railway company MÁV Zrt tendered their resignations, which were accepted by Prime Minister Ferenc Gyurcsány. The CEO of MÁV, István Heinczinger also offered to stand down, but Gyurcsány did not accept his resignation as the company cannot be left leaderless, he said. Heinczinger said that the results of an initial investigation into the crash should be out by the end of this week.

Secretary of state at the newly-created Ministry for Transport, Telecommunication and Energy, László Puch, announced that the families of the deceased will receive an immediate cash payment of HUF 400,000 (EUR 1,604). Parliament observed a minute’s silence for the victims of the crash the same day.

October 13, 2008

A good time to renationalise the railways

Guardian Comment is free: October 13 2008
Christian Wolmar

Unlike the bank bail-out, it wouldn't even cost us anything. But will this government have the guts to do it?

With banks being nationalised almost daily and the national debt now soaring well over the 40% which used to be Gordon Brown's target, what about the railways? Could it not be possible to slip them back into the public sector, something that many people would love to see happen?

There is undoubtedly a strong case to be made, since the railways may soon find themselves in financial difficulties. In recent years, passenger numbers have soared and the government has let a series of franchises on the basis that revenue will continue growing at 7-8% per year. This has partly been predicated on fares rising above the rate of inflation, and partly on an expectation that passenger numbers will continue growing.

So far there has been little sign of the impending recession, with patronage on the railways continue to increase, though at a slower rate. However, railways are very dependent on the general state of the economy and there is no doubt that passenger numbers will soon level off and start to go down. The above-inflation fares rises of 6% – with some rising by 11% – that will be imposed in January will probably be the turning point.

That will leave the train operators, and ultimately the government, in a real pickle. Many train operators are paying heavy premiums for the right to run services and if they plunge into the red, they will do an Oliver Twist on the government. Ministers have repeatedly said that they will not renegotiate franchises and that if big operators such as FirstGroup, Stagecoach or National Express throw in the towel on one franchise, it would have to hand back all its other ones as well. In a rational world, that would be the perfect opportunity for the Department for Transport to say, sorry guys, we are going to bring the franchises back in-house and effectively renationalise the railways.

That is to underestimate the absolute antipathy that New Labour has to nationalisation. The reluctance to step in over Northern Rock and the initial plan to take out only preference shares rather than normal stock which gives the government a say over the running of the banks in today's huge recapitalisation, demonstrates this. The recently sacked transport minister, Tom Harris, told me in an interview earlier this year that if New Labour had inherited British Rail, it would have privatised it. That was not, incidentally, the reason for his departure – being too rightwing has never been the cause of a New Labour minister's dismissal.

In fact, what New Labour refuses to let on is that the railways are effectively largely publicly-owned anyway. Network Rail, which owns the infrastructure, is a company without shareholders that is dependent on government backed debt (to the tune of £20bn), for its survival. It receives billions in annual grants direct from government and is, to all intents and purposes, a state-run enterprise.

Yet Peter Hain was quoted at the weekend as saying that there was no question of renationalising the railways because it would be too expensive. In fact, with Network Rail already in public hands, it would cost nothing to bring back the railways under public control if the train operators handed back the franchises either when they get into financial difficulties or when their terms expire.

Hain's dishonest argument, parroted for some time by successive transport ministers, suggests that British Rail will not emerge Phoenix-like from the ashes of the recession-hit railway system. The new transport secretary, Geoff Hoon, will undoubtedly toe the same line, but he will face a rocky time when the whole complex privatised edifice starts to fall apart as the expected growth of passengers on which it is based does not materialise.

First Great Western asks for new franchise terms

The Guardian: October 13 2008
Dan Milmo and Rob Evans

• Operator wants payments reduced to buy carriages
• Enforced service cuts added pressure, it says

First Great Western, one of Britain's most overcrowded rail franchises, has warned ministers that it does not have enough services to cope with demand.

In a warning that the government has put too much strain on the rail network, the operator has asked to renegotiate the terms of its £1.1bn contract. It wants to reduce payments so it can buy more carriages and has warned it is overspending in order to accommodate commuters.

Documents obtained by the Guardian under the Freedom of Information Act show that FGW requested a review of the contract because, under current terms, it does not run enough services in west England. In a presentation in May to the former rail minister, Tom Harris, FGW said the Department for Transport had put "substantial service cuts" into the franchise when it was renewed in 2006.

"FGW is the only franchise to have been specified with substantial service level cuts - when will it be the right time to review?" it said. FGW added that timetable cuts on the new Cross Country franchise, operated by Arriva, were putting pressure on its own services and that South West Trains is leaving "substantial gaps" in the west country by withdrawing trains.

FGW and its parent, FirstGroup, nearly lost the franchise this year after breaching its contract twice. The DfT found that FGW misled passengers by under-reporting service cancellations last year. It then broke the contract for a second time by exceeding the threshold for cancelled trains in the second half of 2007 because of staff shortages. The then transport secretary, Ruth Kelly, imposed a "remedial agreement" that cost the franchise owner £29m and forced it to buy more carriages, increase compensation payments to passengers and hire more staff.

The head of the rail passenger watchdog said the presentation to Harris underlined that the government has been too prescriptive in setting franchise terms that slashed services while demanding ever-higher premium payments. "The railways are having their own liquidity crisis. They don't have enough trains, and carriages are the industry's currency," said Anthony Smith, chief executive of Passenger Focus. He added: "In the future, franchises should take on a much greater level of passenger input."

The DfT has rejected accusations that it is demanding too much from the rail network in exchange for too little investment. It is spending more than £1bn on 1,300 new carriages that will operate on the most overcrowded routes by 2014. Government investment in the rail network will fall over the next five years, with passengers making up the difference by footing three-quarters of the cost at about £9bn a year.

FGW carries 79 million passengers a year and operates services between London and Cardiff as well as services in the west country and the busy commuter routes in the Thames Valley. Its reputation reached a nadir last year when passengers staged a one day "fare strike" in Bristol in protest over carriage shortages and timetable problems. However, FGW has undergone a substantial management revamp and is running a more reliable service with nine out of 10 trains arriving on time.

A FGW spokesperson said: "We meet regularly with the DfT and continue to discuss options to improve services."

Tory plan to cut Network Rail's engineering work monopoly

Guardian Online: October 13 2008
Dan Milmo, transport correspondent

Network Rail would lose its monopoly on engineering work under Conservative plans to shake up the performance of Britain's railways.

Train operators would be invited to bid against the owner of the country's rail infrastructure for engineering tasks in the biggest shakeup of the industry since Railtrack collapsed seven years ago. The Tories are also planning to strengthen independent oversight of Network Rail by handing greater powers to the rail regulator, amid complaints from train companies and passenger groups that their concerns are often ignored.

Virgin Trains, a critic of Network Rail's performance, welcomed the proposal, which is expected to form part of a rail review to be published before Christmas. "We understand that Network Rail has many priorities across the network and this policy may offer an imaginative way to get things done."

The proposal to break up Network Rail's dominance of maintenance and engineering work follows a failure to deliver crucial work on time in the new year. A record £14m fine was levied on Network Rail after a line upgrade on the London to Glasgow route overshot by four days due to a shortage of electrical engineers.

A party source said the Conservatives had stepped back from even more radical solutions such as splitting Network Rail into eight regions and integrating track ownership with franchise ownership. Such a move would have returned the railways to the British Rail era, and the party had opted for "evolution, not revolution".

"We want to see more cooperation between Network Rail and train operators. We need to make sure that the issues of the customer and travelling public are addressed," said the source.

However, train operators would be barred from bidding for large-scale engineering work such as the £8.6bn west coast main line upgrade. Instead, they would be allowed to bid against Network Rail for public funds for smaller tasks such as platform lengthening, station improvements and signalling upgrades.

Network Rail, which is asking for nearly £30bn in taxpayers' and farepayers' money to maintain and improve the railways over the next five years, said it was receptive to any idea "whose sole purpose is to improve the railways, making it better for its millions of daily users". The company argues that the rail system's performance has improved significantly in recent years, with the proportion of trains arriving on time rising from a nadir of 75% in 2001 to 90% currently.

The Tories have already pledged to increase the length of rail franchises - contracts between private operators and the government to run trains on certain routes - to between 15 and 20 years rather than the norm of about 10 years. Conservatives expect train operators to use the revenues generated by the longer contracts to buy their own carriages and to fund infrastructure improvements.

Deutsche Bahn mulls private share placement, press reports

Reuters: Oct 13, 2008

FRANKFURT - Deutsche Bahn DBN.UL, the German railway operator that last week put its IPO plans on hold, is assessing the sale of stakes in its DB Mobility Logistics unit to institutional investors in private placements, the Frankfurter Allgemeine Zeitung reported.

Chief Executive Hartmut Mehdorn and finance chief Diethelm Sack are looking into potential off-exchange transactions with investment funds in China, Singapore, the Middle East and with Russia's state railway company, the paper reported on Monday without citing its source.

A new IPO date, initially penciled in for November, now looked unlikely given the recent financial market turbulence, the paper said.

Deutsche Bahn had no immediate comment on the report.

(Reporting by Ludwig Burger; Editing by Paul Bolding)

Scotland’s rail transport is moving in the wrong direction

The Herald: 13 October 2008

I note with sadness the effective dismantling of the Strathclyde Transport rail network as SPT identifiers are to be removed from trains and stations.

At a time when most countries are striving to expand and further integrate the urban rail transport of their major cities, Scotland is moving in the opposite direction.

To remove the user-friendly visibility of the multi-line SPT system, serving city and suburb and linking in with the subway, in order to return to a lone SPT circle line, is, effectively, to step back to 1896.

In 2014, to the eyes of onlookers, Strathclyde's rail transport will be no less than an ecological dinosaur and a Commonwealth-wide laughing stock for Glasgow, and indeed for Scotland as a whole. Is that really the picture that Transport Scotland wishes to paint?

Can someone please explain this retrograde step to me?
Laurence Grove, Senior lecturer and head of French, Director, Centre for Emblem Studies, University of Glasgow.

October 10, 2008

Tony Woodley and T&G may quit Unite over friction with Derek Simpson of Amicus

The Times: October 10, 2008
Christine Buckley, Industrial Editor

Britain’s biggest trade union could be heading for a dramatic break-up, destroying what was hailed as a big step forward for the labour movement.

The Times has learnt that the T&G section of Unite has sought legal advice about pulling out of its troubled merger with the Amicus union, amid tensions between its joint leaders.

Unite has been hampered by friction between Tony Woodley, from the T&G, and Derek Simpson, from Amicus, who share power as joint general secretaries.

Their relationship has been marked by rivalry and suspicion. Mr Simpson failed to attend the launch of Unite last year after Mr Woodley was interviewed about it that morning on BBC Radio 4’s Today. Insiders say they can barely be in the same room together.

The T&G side is also very unhappy with Amicus’s finances after it went £3.6 million into the red in the past six months. Amicus says it is paying for some operations that serve both unions, such as communications.

The confirmation of the severity of the problems at Unite comes as Mr Simpson prepares to stand for re-election to bolster his own position. He will submit himself to an election among members of his Amicus side of the union after a legal challenge to his plans to stay on beyond retirement age.

As revealed in The Times last month, Mr Simpson is seeking a fresh mandate in the face of the legal challenge, which is being considered by the unions’ watchdog, the Certification Officer.

If Unite, which has 2.1 million members and gives £2 million a year to the Labour Party, were to split up it would be a big blow to the union movement, which is increasingly using mergers to offset declining membership and job losses in traditionally unionised areas such as manufacturing.

Mr Simpson will face a serious internal challenge for his job from Laurence Faircloth, a regional official. A third candidate will be Jerry Hicks, a former Rolls-Royce official who is mounting the legal challenge to Mr Simpson’s tenure. The election will be held early next year.

Mr Simpson had intended to quit as joint general secretary of Unite in late 2010, when he is 66.

Mr Woodley plans to step down early the following year and hand over to a single successor for the merged union, who is due to be elected next year.

Mr Simpson has been an ardent supporter of Gordon Brown, giving a job to Charlie Whelan, his former spin doctor, and if he were toppled it would be a blow to the Prime Minister.

An emergency meeting of Unite’s ruling executive yesterday voted to approve his plan to hold the election. Significantly, it also suspended for six months the new rule book for the merged union. This means the two sides remain individual organisations. The full merger was supposed to have been sealed, with the new rule book, on November 1.

Although formal plans to merge were laid out in May last year, the two sides are still at odds over a financial structure. Finance is a key issue for the T&G, where officials are also unhappy with the spending of Mr Simpson. He has been criticised for living in a house paid for by the union and for other costs such as twice taking a helicopter to the Glastonbury Festival.

Mr Faircloth, 56, Unite’s regional secretary for the southwest, said he was standing against Mr Simpson because he did not believe enough was being done to push through the merger. The election will enable the new joint general secretary to serve only for a year, finishing in 2010. Unite officials declined to comment.

Neglected railways need more inventiveness and less market

Dutch Socialist Party: October 10th, 2008

Long before the EU was founded, Europe had a wonderful international railway system, linking nearly all countries and their capitals by direct long distance trains and overnight connections, if necessary completed by ferry links.
Dutch Socialist Party MEP, Erik Meijer

Besides this system small cross border connections guaranteed the direct relations between regions in neighbouring countries in the continental part of Europe. The entire system was possible on the basis of voluntary co-operation between national railway companies and an international company for sleeping cars. It was an example of successful bottom up European co-operation.

However, to-day at the European level there is less integration of railways. On the main lines national frequencies have been improved, but cross border links, night trains and long distance trains have been seriously reduced. Now the railways focus on frequent services in densely populated urban regions and the link between the biggest agglomerations, mainly inside one country. The main cross border exception is the high speed network from Brussels to London and Paris, which will soon be extended to Amsterdam, Cologne and Barcelona and later to Milan. The remaining parts of the traditional network, especially in scarcely populated rural regions, are in danger of being disused or neglected.

For many years politicians and governments invited the railway companies from different European countries no longer to consider themselves colleagues, but to feel themselves condemned to be in competition with their neighbours in an attempt to conquer their home markets. Since the introduction of computers some countries no longer take responsibility for the integration of trains coming from abroad into their home network. So the selling of international tickets has become more complicated. In the past you could buy hand written tickets to use far from home, but to-day you can only buy the limited selection that your home railway company has available in its computers. There is also a lack on information on international long distance services. The EP failed to correct those shortcomings in its recent decisions on passengers’ rights. Only linguists and geographers can rapidly and easily cross modern Europe by rail. Most other people, aside from inventive people on holidays, who are not in a hurry, are condemned to take an aeroplane, a bad choice from an environmental viewpoint.

The three railway packages which passed the EP between 2000 and 2007 ignore most of those problems. They are based primarily on the idea that railway companies can reduce their expenses by adopting the experiences of the free market in air and road transport, where demand is growing. Liberalisation and an obligation to select operators by tendering are the presumed means to promote growth and quality. First, European freight transport should be taken over by cross border operating companies, and later cross border passengers transport as well. To that aim some operating companies have been separated from the rail network, and they have to pay for using it, although the Swiss experience taught us that it is cheaper to integrate both. For the future we need less market and more use of practical experience and inventiveness.

Erik Meijer, MEP Dutch Socialist Party (GUE/NGL)
Rotterdam, the Netherlands

October 9, 2008

Berlin delays privatisation of Deutsche Bahn

Financial Times: October 9 2008
By Chris Bryant and Gerrit Wiesmann

Financial market turmoil dealt a potentially fatal blow to Germany’s biggest privatisation in eight years when Berlin was forced to postpone the sale of a quarter stake in the train operating unit of Deutsche Bahn, the state-owned railway.

Peer Steinbrück, finance minister, said the initial public offering of DB Mobility and Logistics, once slated for October 27, would still go ahead. “As soon as the market environment is conducive to a successful IPO [initial public offering], we will proceed,” he said.

The public is sceptical about the project and the delay means it could happen close to the general election in September 2009 – a scenario the government had tried to avoid after wringing approval from parliament in the summer. One person familiar with the process said the chances of a share sale, by spring at the latest, remained “very high” – if financial markets stabilised and global investors were again willing to put up the €5bn ($6.7bn) the German government was looking for.

The decision to postpone came after a chorus of politicians had demanded that the government put the share-sale on ice given current market turmoil. They worried a sale now would not have delivered sufficient value for taxpayers.

According to people close to the process, government officials and bankers from Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS on Thursday abandoned the search for a price range after three days of unprecedented market volatility.

This followed weeks of behind the scenes wrangling about DBML’s valuation, which had seen Berlin insist on takings of €5bn-€6bn, and bankers push for a price below €5bn, a target DBML-parent Deutsche Bahn also seemed to back.

The postponement creates a headache for Chancellor Angela Merkel’s coalition government of conservatives and social democrats as there are no guarantees the market will recover in the next six months to render acceptable takings.

But the government remains anxious to complete the much-delayed sale before the election campaign kicks off in the summer, as failure to do so would mean the next administration would have to seek a renewal of parliamentary approval.

The sale is unpopular with the public, and officials are concerned the financial crisis will further fuel doubts about the merits of privatisation at a time when other countries are treading the opposite path by nationalising financial institutions.

See also:

Germany Delays National Railway IPO

Wall Street Journal: OCTOBER 10, 2008
By MIKE ESTERL in Frankfurt and DAVID CRAWFORD in Berlin

Germany slammed the brakes on its largest privatization in nearly a decade, postponing a stock-market listing of its national railway Deutsche Bahn.

Deutsche Bahn trains in Frankfurt, above. The German national railway has postponed its IPO amid the fallout from the global financial crisis.

Blaming "extreme uncertainties" in markets, the government said Thursday it is delaying indefinitely an initial public offering of a 24.9% stake in Deutsche Bahn that was set to begin trading Oct. 27. Estimates on the value of that stake had ranged from €4 billion to €8 billion, or about $5.5 billion to $10.9 billion, in recent months.

The decision is a blow for policy makers in Berlin and underscores how the havoc accelerating through stock exchanges can quickly gum up plans that were years in the making. As recently as last week, Hartmut Mehdorn, Deutsche Bahn's chief executive, said the IPO was moving ahead.

Finance Minister Peer Steinbrück said Germany will carry out the IPO for Deutsche Bahn, which booked €31 billion in revenue last year, as soon as it can ensure a "fair price." But a ministry spokesman said there is no target date, given the market volatility. "We don't have a crystal ball," the spokesman said.

Caught in a global downdraft, the DAX index of Germany's 30 largest publicly traded stocks has lost about a fifth of its value since the government formally set the IPO date in late September. Subscription rights to the share offering -- Germany's largest since it listed the national postal service in 2000 -- were slated to start Monday.

Getting the IPO back on track could prove a challenge. German politicians have long been divided about privatizing Europe's largest railway network, and efforts by free-market advocates have been stymied for years.

Berlin was counting on the IPO proceeds to help bankroll its budget next year, as a slowdown in Europe's largest economy threatens to shrink tax revenue. Further increasing potential financial obligations, German authorities in recent days moved to guarantee domestic bank deposits and brokered a €50 billion credit line for lender Hypo Real Estate Holding AG.

In a breakthrough last May, German lawmakers agreed to publicly list just below 25% of the national railway. The compromise was struck after lawmakers from Chancellor Angela Merkel's conservative Christian Democrats dropped initial efforts to sell as much as 49%, which had been opposed by the Social Democrats, their center-left coalition partners.

Observers warn the latest delay could allow lawmakers to reconsider their positions, especially as Germany heads into what are expected to be heavily contested national elections next year. DSW, a German shareholder-rights association, said Thursday that the IPO "will be more difficult politically" in a campaign year.

Under the partial privatization plan, investors would be allowed to take a 24.9% stake in a new unit called DB Mobility Logistics that groups Deutsche Bahn's transportation services with its sizable logistics business. The government would retain control of Deutsche Bahn's tracks, stations and energy network.

DB Mobility Logistics booked €16.17 billion in revenue during the first half of 2008, up 6.8% from the year-earlier period, with an operating profit of €1.13 billion and nearly 180,000 employees. About a third of Deutsche Bahn's revenue is tied to passenger transport and a third of overall revenue is generated outside Germany.

—Marcus Walker and Almut Schoenfeld in Berlin contributed to this article.
Write to Mike Esterl at mike.esterl@wsj.com and David Crawford at david.crawford@wsj.com

See also:

'A Deathblow to Privatization'

Spiegel Online: 10/10/2008


One of the German government's most ambitious and arduously negotiated projects fell victim to the financial crisis on Thursday. The planned IPO of Deutsche Bahn have been put on hold. German commentators have their doubts if it will ever get back on track.
Wave bye-bye to the privatization of German rail.

With the global financial crisis showing no sign of abating, German crisis managers find themselves both adjusting future budgetary expectations and reconsidering earlier economic decisions. Among the objects of second-guessing are plans to privatize Deutsche Bahn, Germany's national railway company. The initial public offering process had been scheduled to begin on Monday and the company, expecting to take in upwards of €4 billion, had already been courting international investors for months.

Thursday, government officials announced that the privatization would be delayed until further notice. "We are not going to put the assets on the capital markets at the wrong time," Finance Minister Peer Steinbrück said.

The postponement is a bitter pill to swallow for Germany's ruling "Grand Coalition" between Christian Democrats and Social Democrats. The privatization plans -- which called for the company's passenger, freight and logistic divisions to be spun off into a holding company, 24.9 percent of which was to be privatized -- were the product of months of arduous negotiations between the coalition partners. It was also among the government's few headlining achievements during its three years in power.

Politicians insist that they reckon only with a delay, not a cancellation of Deutsche Bahn's privatization. As Angela Merkel told reporters Thursday, "I assume that there will eventually be a business environment in which the privatization can take place." But, with politicians openly discussing greater intervention in the economy and murmuring of further bank takeovers, Germany's newspaper commentators are skeptical that the Deutsche Bahn plan will ever get back on track.

The center-left Süddeutsche Zeitung writes:

"The worst case scenario for Deutsche Bahn is that nothing changes. Rail remains a state-owned company and it remains a giant with monoplistic control over trains and track networks. How likely the worst case is, though, is about as easy to predict as the health of the stock market at the end of November. The fact is that the privitization of German rail has lost all momentum...."

"Meanwhile, difficulties are mounting. German rail may be able to credibly promise that rail doesn't need to be overly concerned about the economic problems. After all, travellers will continue to travel and goods will still have to be transported through the country. But one business segment, carefully built up by the head of Deutsche Bahn Hartmut Mehdorn, is in trouble: global freight. If the global economy slows down, there won't be as much to transport. When the numbers will be as auspicious for a German rail IPO as they were this year is a question nobody can answer."

The business daily Handelsblatt writes:

The fact is, the already botched, partial privatization of the Deutsche Bahn received on Thursday ... it's death blow. And that's a good thing."

"The calculation behind the political pressure for partial privatization is clear: the IPO is a prestige project for Germany's governing coalition. But that coalition reaches the end of its road in the elections next fall. The coalition can see that there will likely be a larger opposition from the left, which is hardly supports rail privatization. The IPO, then, would have to take place before next autumn's elections."

"That, though, isn't likely and, seen politically, the chances that the light will ever again be green are sinking. At the moment, one bank after another across the globe is being partially nationalized. A partial privatization of German rail hardly fits."

"Finally, there are the economic forecasts, that predict anything but rosy economic times in the coming months. It is hard to imagine stock markets making a quick recovery. The value of the company on the stock market will continue to sink. Every day that the stock market drops is another argument for not selling the German rail system cheaply -- and with that, the light will remain red."

The business daily Financial Times Deutschland writes:

"Among the people, the entry to the market has few friends, and skepticism of the market will only increase. It won't be long until the representatives of the governing parties succumb to the temptation to question the privatization plans. Then we'll be facing a bizarre alliance of panicking markets and moralizing admonishers. That would be a big mistake."

"If the government initiates another fundamental debate about the privatization of Deutsche Bahn, many of the interested investors would be permanently turned off. It would be too clear a signal that the company is a plaything of political interests."

"If Berlin doesn't manage [to realize the privatization plans] years of preparation will have gone to waste. And that won't have helped anyone -- neither the head of Deutsch Bahn, nor the passengers of the railway."

The left-of-center Berliner Zeitung writes:

"It's understandable if the latest rejection causes stomach problems for the head of Deutsche Bahn. Because nobody knows whether the markets will have calmed down enough in the next few weeks to make another go at privatization. There's much to suggest that that won't be the case."

"A large majority of the population has always rejected the idea of going public. Many of Deutsche Bahn's employees have also always preferred to remain under control of the state. Their desire is understandable. They fear that unserious investors will have a say at the company. And in the past few days, these fears have likely deepened and spread even further. The recent turbulence has caused enormous damage to the public's trust of the free market. Certainly it calls into question the point of railway privatization. It is indeed a paradox that, at a time when banks around the world are getting nationalized, Deutsche Bahn wants to enter the stock market."

-- Cameron Abadi; 3:15 p.m. CET

France's SNCF partners with Italian private rail

Associated Press: October 9, 2008

ROME: The French state rail operator SNCF has bought a 20-percent stake in an Italian high-speed private railway that plans to launch services in 2011, officials said Thursday.

SNCF's partnership with the Italian company NTV could pave the way for collaboration in areas such as booking, sales, ticketing and passenger services, NTV said in a statement. Financial terms were not released.

"The agreement gives NTV the opportunity to become a player in the European market, which will be completely liberalized for international services from January 2010," one of NTV's founders, Luca di Montezemolo, said in the statement.

The first major challenge to Italy's state rail monopoly, NTV was founded in 2006 by a group of Italian entrepreneurs, including Fiat and Ferrari chairman Montezemolo and Tod's shoe founder Diego Della Valle.

NTV has a goal of capturing 20 percent of the high-speed market, or 10 million passengers a year by 2015, with a fleet of 25 new high-speed AGV trains from the French manufacturer Alstrom. NTV will launch with services to major Italian cities, but its ambition is international.

See also:

SNCF buys into Italian rail plan

Financial Times: October 10 2008
By Guy Dinmore in Rome

France’s state railway, SNCF, is pushing ahead with its cross-border expansion by taking a 20 per cent stake in NTV, an Italian consortium that plans to launch Europe’s first privately operated high-speed train service in 2011.

Guillaume Pepy, SNCF president, and Luca Cordero di Montezemolo, NTV chairman, on Thursday told a Rome news conference that the exclusive deal ensured SNCF would not enter into any other high-speed train operations in Italy. It would also provide a platform for joint expansion elsewhere in Europe.

The tie-up is the latest empire-building move among major state-owned railways taking advantage of Europe’s deregulation and challenging airlines on some of their most profitable domestic routes.

NTV is the first customer for Alstom’s AGV model, which has the same traction system that set a world rail speed record of 574km/hour last year. Twenty-five trains are on order at a cost of €650m ($887m).

Among its planned routes – from Bari and Salerno in southern Italy as far north as Venice and Turin – NTV aims to run 16 services a day between Rome and Milan, cutting about 60 minutes off the four-hour journey.

This would take it into direct competition with Alitalia, Italy’s lossmaking flag carrier, which is in the process of being rescued by Cai, an Italian consortium, and merged with Air One, its smaller Italian rival. Cai, which includes the bank and NTV shareholder Intesa San Paulo, is holding talks this week with Air France-KLM, Lufthansa and British Airways, with the aim of selling a minority stake.

Mr Pepy declined to say how much SNCF was paying for its stake in NTV. It will have two members on the 14-seat board.

Mr Montezemolo, who is also president of Ferrari and is having the trains painted the famous shade of red associated with the sports car maker, said NTV’s target was to take 20 per cent of the Italian high-speed market, carrying 30,000 passengers a day. His most immediate competitor is Italy’s state-owned Trenitalia, which plans to open its first high-speed connection, from Milan to Bologna, this year.

Carlo Toto, owner of Air One and a member of the consortium bidding for Alitalia, also plans a high-speed train service but has not yet ordered his trains.

SNCF, Europe’s largest high-speed train operator, intends to expand its partnerships across Europe with what Mr Pepy called “flag carriers” and “newcomers” such as NTV. He identified Germany and Austria as potentially interesting markets.

SNCF’s strategy of forming partnerships is aimed at matching Germany’s Deutsche Bahn, which has grown aggressively by buying the freight arms of state railways in the Netherlands and Denmark and buying or taking stakes in operators elsewhere.

Consummate networker who brings a passion for pace

As chairman of Ferrari and its parent Fiat, Luca Cordero di Montezemolo takes his passion for pace and Italian flair into high-speed trains as chairman of NTV.

Once named by a Japanese magazine as the world’s most elegant man and who recently advised FT readers against wearing short sleeves or socks, the 61-year-old member of the Italian jet-set is a consummate networker who thrives on publicity.

Until this spring, he was also head of Confindustria, the influential employers’ lobby that jealously preserves its status as counterweight to the trade unions. He criticised Prime Minister Silvio Berlusconi in the 2006 elections, but shed no tears over the defeat of the dysfunctional left-wing coalition this year.

He also champions Italian brands and ownership and opposed the takeover of Alitalia by foreign airlines.

Together with long-time business partner Diego Della Valle (owner of Tod’s fashion brand) and Gianni Punzo, a Naples magnate, the three own a joint 38.4 per cent of NTV.

October 8, 2008

Australian State to take back control of rail

AAP: October 08, 2008

RAILCORP will be scrapped and New South Wales train services returned to direct control of the State Government in a move Premier Nathan Rees says will improve services.

Mr Rees will formally announce the move today, saying it comes after RailCorp continually ignored the State Government's commitments to the electorate.

Legislation will go before Parliament when it returns later this month to remove the corporation's commercial board.

RailCorp will return to being a statutory authority under the direct control of the state's transport minister.

Mr Rees said the decision was about taking control of a service which impacted on people daily.

He said the experiment to create RailCorp back in 2004 had not worked.

"Some millions of people travel on our rail system, and since 2004 it's been managed by a board at arm's length from Government," he told ABC Radio.

"And what we're saying is that experiment has failed, that it's been unwieldy."

RailCorp was announced by former transport minister Michael Costa in 2003 as part of an amalgamation of several distinct rail authorities.

Mr Costa, and then newly-appointed chief executive Vince Graham, decided on a market-style corporate model for RailCorp, in a move to carry out essential but not necessarily popular reform.

The changes were enacted in January 2004.

Mr Rees said under the corporate structure, transport ministers were held to public account, but they did not have any day-to-day control over the network.

He cited the recent trackwork carried out on train lines over the long weekend which coincided with the NRL grand final and a major race meeting at Randwick Racecourse.

"That to me is unfathomable and the answers we were getting from RailCorp on that were simply not satisfactory," Mr Rees said.

He said public transport and road congestion was the top issue for Sydneysiders and would be a priority in next month's mini-budget.

See also:

Fears of union control over rail

THE AUSTRALIAN: October 09, 2008
Nicky Trup

THE NSW Government's decision to bring the state rail network under its control has raised concerns that union bosses will exert a heavy influence over the state's public transport network.

Premier Nathan Rees announced yesterday that the commercial management board responsible for RailCorp would be abolished and control returned to the state Government in an attempt to boost accountability and service performance.

NSW Opposition Leader Barry O'Farrell criticised the move, saying it would do nothing to improve services and might leave the rail industry at the mercy of the unions.

"Changing the driver won't fix the train after 13 years of neglect," Mr O'Farrell said, describing the move as a diversion from Labor's "mismanagement" of the state rail network.

He said Labor's decisions to reduce maintenance spending, delay replacing trains and grant protection to rail unions had hurt commuters, who would now be beholden to the unions.

"Nathan Rees has basically handed over the keys of the rail network to the union bosses," Mr O'Farrell said.

But the Opposition Leader's claims were dismissed by Rail Tram and Bus Union secretary Nick Lewocki.

He said the change would benefit the travelling public, rather than union members.

Mr Lewocki said the restructure would improve aspects of rail travel such as timetables, overcrowding, security and staffing at stations.

RailCorp's standards had slipped when the management focused on slashing jobs and cutting costs to suit the state Treasury, instead of providing better services, he said.

The Premier defended the decision, saying RailCorp was in need of government control and had become "a law unto itself".

"RailCorp was operating as a business -- not as a service delivery arm of the Government," he said.

"It wasn't good enough, so we've changed it."

See also:

All union bosses aboard as Premier brings railways back

Sydney Morning Herald: October 9, 2008
Andrew Clennell State Political Editor

NO MATTER what spin the Premier, Nathan Rees, might put on it, he owes his job to union and party bosses.

It became crystal clear yesterday that in the next few months his biggest test will be to show whether he is a true reformer or a union lackey.

Rees did nothing yesterday to suggest he would be anything but a union sympathiser with an announcement, welcomed by rail union bosses, that he plans to turn RailCorp back into an in-house government entity.

He said it was about returning accountability for the service to the Government and the Transport Minister and therefore improving service delivery. If Rees is taken at his word, if what he called his "first step" of rail reform is about improving the system, the true test is ahead.

If, in coming months, he does not make the job cuts and other tough decisions that so many experts have recommended for the rail system over so many years, then he will not be, as he puts it, "fair dinkum".

Rees was backed into the job of Premier amid an electricity privatisation storm by the Unions NSW boss, John Robertson, and the ALP state secretary, Karl Bitar.

With Mr Bitar expected to become Labor's national secretary, Mr Robertson's assistant - the man who was supposed to succeed him at Unions NSW, Matt Thistlethwaite, is hotly tipped to take Mr Bitar's job - one of the most powerful in NSW politics.

In that case, and with the Government's loss to the unions over electricity privatisation in the shadows, it will be difficult for Rees to wage any sort of campaign to break down union domination of the rail system.

Rees denied yesterday his announcement was a move away from the philosophy of the former treasurer, Michael Costa, towards the Left - the faction he used to be in. He said the Herald was welcome to "view it through that prism" but the old state-owned corporation structure, with the treasurer and transport minister involved in the Railcorp board, was a "recipe for paralysis".

The path to rail reform has been long. Morris Iemma had promised it in April and was well advanced along the path when he left office.

Rees yesterday promised announcements by Christmas; a public fed up with the service can only hope he delivers.

The Premier has made a big deal about his regime for "accountability and transparency". Yet he seemed to fuel the Opposition's line of attack that he was "loose with the truth" yesterday as he tried to pass off the announcement as his own idea. The Herald has learnt that the former transport minister John Watkins was pushing for it earlier this year.

But Rees will deliver on his promise of transparency in at least one area. Asked at yesterday's media conference about making the $10 million Boston report on suggested reforms for rail public, he had no option but to agree.

It will be made available to the media today.

RMT calls for urgent investigation into reports of Edinburgh signals ‘blunder’

RMT: October 8 2008

SCOTLAND’S BIGGEST rail union has called for an urgent safety probe into reports that a signalling blunder at Edinburgh Waverley station yesterday (Tuesday) afternoon could have resulted in a head-on collision between two passenger trains.

RMT has asked the Railways Inspectorate to investigate reports that a train was signalled into a platform at the station at the same time as another was being signalled out of it, and to probe the competency of managers being used to staff signal boxes during the signallers’ strike.

“Our information is that at around 13:30 today a train was signalled out of platform ten at Waverley Station at exactly the same time as another was being signalled into it,” RMT general secretary said today.

“If that is true it amounts to a near miss and it raises serious concerns about the competency of the managers Network Rail is using to do our members’ jobs during the dispute, and I have asked the railways inspectorate to investigate as a matter of urgency.

“NR has been attempting to label RMT as a union that considers safety to be optional, but this underlines the double standards of an organisation that is happy to water down its own safety standards during a dispute.

“If one of our members was responsible for a serious blunder like this the book would be thrown at them, yet the company is putting managers who may not have been in a box for years into the front line and putting rail workers’ and passengers’ lives into their hands,” Bob Crow said.


Notes to editors: Fresh talks in the signallers’ dispute will take place at ACAS today (Wednesday). The first of two scheduled 24-hour strikes ends today at noon, and the second is set to begin at noon on Thursday October 9. A ban on overtime and rest-day working began at 00:01 on Tuesday.

RMT signallers and signals supervisors in Scotland voted by a margin of more than two to one for strike action over the breakdown in industrial relations that centres on agreements on rostering and transfers.

Talks to end rail strike misery restart

The Times: October 7, 2008
Charlene Sweeney

Talks are due to resume today aimed at ending the nationwide strike by railway signal workers that brought travel chaos across Scotland yesterday.

Tens of thousands of commuters faced lengthy delays as 40 per cent of services were cancelled, while others were severely reduced. Many travellers took to the roads, causing heavy congestion on a day when driving conditions were already poor because of heavy rain.

The signal workers, employed by Network Rail, walked out at midday in the first of two 24-hour stoppages, with the second scheduled for noon tomorrow. About 450 members of the National Union of Rail, Maritime and Transport Workers (RMT) are involved in the dispute over staff rosters. The union has accused Network Rail of wanting to make changes to rosters at short notice, but the company denies the claim.

Although the industrial action was expected to disrupt services for four days, RMT officials and Network Rail agreed to get back round the table today, raising hopes of a resolution. The discussions, helped by Acas, the conciliation service, are scheduled to take place at Network Rail's head office in Glasgow at 2pm, shortly after the first walk-out finishes.

Alex Salmond, the Scottish First Minister, hailed the meeting as a positive step forward, and urged the two sides to come to a resolution.

“It must be a good sign that both sides are willing to resume talks and I welcome this development,” he said.

“It is deeply unfortunate that one remaining issue in the dispute has resulted in substantial inconvenience to the travelling public today and tomorrow and both the union and management must do their utmost to resolve their differences and avoid a repetition of the action.”

Services wound down after the morning rush hour yesterday, affecting all main routes north of the Border. Only half the usual number of trains ran on the main commuter route between Edinburgh and Glasgow, with the last service at 6pm.

There were no trains operating north of Perth, as the larger number of small signal boxes made the area more difficult to cover with contingency staff, but replacement bus services have been running to Aberdeen and Inverness. Some cross-border routes were also affected when Virgin Trains cancelled a handful of its services last night and this morning.

The concourses at Central Station and Queen Street Station in Glasgow, two of the biggest in Scotland, were quiet yesterday as passengers sought to avoid the stoppages.

Travellers who had ventured out voiced anger yesterday over the strike. Jean Morrison, chief executive of SCAR, an Aberdeen-based fuel poverty charity, who had to attend a business meeting in Glasgow yesterday, said it had taken a day out of her working week.

An assistant in a catering outlet in Queen Street station pointed out that it was not only commuters who had been affected. “We are probably going to shut early tonight, which means we are losing five hours of trade and our wages could be cut.”

Despite the failure on Monday of talks aimed at averting the strike, both the union and railway management remain hopeful of reaching agreement today.

Ian Macintyre, RMT regional organiser for Scotland and Northern Ireland, who joined a picket line at Central Station yesterday, said: “We are happy that there are talks tomorrow but they have got to be meaningful.”

David Simpson, Network Rail route director for Scotland, said: “It is encouraging that the RMT has agreed to get around the table again but we call on them to suspend Thursday's strike while we try to find a resolution.”

Mary Grant, managing director of the train operator First ScotRail, called on the two sides to put passengers first. “Our customers are caught in the middle of a strike which has nothing to do with us,” she said.

“We will continue to run as many trains as possible, but there are limits to what can be provided.

“It is hoped Network Rail and their signallers will resolve issues and end the misery for our customers.”

Tavish Scott, leader of the Scottish Liberal Democrats, said that the SNP administration needed to work out what role it was taking in resolving the dispute: “First they said it was none of their business. Then the First Minister phoned everyone, which was too late.

“Now the Government is involved, it needs to stop Thursday's strike.”

Crisis puts German rail IPO in doubt

Financial Times: October 6 2008
By Gerrit Wiesmann in Frankfurt

The financial market turmoil has forced the German government to consider postponing the privatisation of the rail operating unit of Deutsche Bahn, the German state railway, which it had hoped would raise €5bn-€6bn ($6.8bn-$8.1bn).

“At some point, we have to consider whether now is the right time [to proceed with the sale]”, said Peer Steinbrück, the German finance minister, on Monday.

The decline in equity prices has brought to a head a long-simmering disagreement between the German government and the banks acting as global co-ordinators – Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS – about the valuation of Deutsche Bahn Mobility and Logistics (DBML).

Berlin has already earmarked privatisation takings of up to €6bn for the federal budget and as new capital for Deutsche Bahn, the state-owned railway company that will continue to control DBML and Germany’s 34,000km of railway network.

The banks have been pushing the government to consider a price of below €5bn for its quarter-stake in DBML, arguing that investors would not pay more, and that the co-ordinating banks could be saddled with unwanted, overvalued stock.

People familiar with Mr Steinbrück’s thinking said no decision had been taken, but that it was useful to signal – both to potential investors and the banks running the sale – that Berlin was not chained to the public offering set for October 27.

People close to the process said Mr Steinbrück had now voiced publicly what his officials had been saying privately for weeks: If the banks could not guarantee the kind of sum Berlin expected, Germany’s largest privatisation in eight years would be postponed.

Such a move could derail the project for the foreseeable future.

Even if financial markets were to calm down in the coming months, a stock offering early next year would, for many in government, come too close to the national election in September 2009.

Should the next government still want to pursue the project, it would again have to ask the German parliament for permission – a fraught process given popular distrust of privatisation and deregulation, widespread even before the banking turmoil struck.

See also:

Germany may pull rail sale

JOURNAL of COMMERCE: October 7, 2008
Bruce Barnard

The German government is mulling delaying the partial privatization of Deutsche Bahn, Europe’s biggest rail freight operator, scheduled for later this month amid growing turmoil on global financial markets.

“At some point, one has to consider whether now is the right time [to continue with the privatization], Finance minister Peer Steinbrueck said.

The government was hoping to raise 5-6 billion euros [$6.8-8.1 billion] from an initial public offering of 24.9 percent of DB Mobility Logistics, Deutsche Bahn’s freight and passenger unit, on Oct. 27.

Part of the proceeds were earmarked for investments by DB Schenker, Deutsche Bahn’s forwarding subsidiary.

Deutsche Bahn Chief Executive Hartmut Mehdorn on Oct. 2 said there was healthy interest in the planned offering despite the turmoil in financial markets. "The time frame is set.There is no need to change it,” he said.

But doubts about the timing have grown following sharp declines in stock prices around the world, accelerated in Germany by the government’s 35-billion euros [$47.8-billion] emergency bailout of Hypo Real Estate, the country’s second-largest mortgage lender.

Deutsche Bahn executives are due to meet finance ministry officials on Thursday to discuss the price range for the stock offering and the potential proceeds from the sale. Analysts have scaled back their estimates to around 5 billion euros, prompting speculation the government might pull the flotation.

See also:

Minister raises doubts over German rail IPO

Associated Press: October 6, 2008

BERLIN: Germany's finance minister raised doubts Monday over plans for a partial initial public offering this month of Deutsche Bahn AG, which operates the country's railways.

State-owned Deutsche Bahn last month said it plans to go ahead with the IPO — in which 24.9 percent of its passenger, cargo and logistics divisions will be sold — on Oct. 27, despite volatility on the markets.

Since then, the global financial crisis has made its effects felt more strongly in Europe, with several countries moving to guarantee bank deposits and Germany shoring up distressed lender Hypo Real Estate AG.

Finance Minister Peer Steinbrueck said it was necessary to consider "whether now is the right point in time" for the Deutsche Bahn IPO.

Steinbrueck said preparations were continuing on schedule, but "the time will come to decide whether we complete the process now or pull out a plan B." He did not elaborate.

Some German lawmakers have argued against going ahead with the IPO now given the high degree of uncertainty in financial markets.

See also:

Germany Should Halt Railway IPO as Crunch Widens, Lawmakers Say

Bloomberg: Oct. 6
By Andreas Cremer

The German government should delay a planned sale of state-owned railway Deutsche Bahn AG as the deepening credit crunch curbs demand for the stock and limits the price investors may be willing to pay, lawmakers of Chancellor Angela Merkel's ruling Christian Democrats said.

"Given market developments, I'm skeptical whether October or November is the right point of time for a share sale,'' Dirk Fischer, transportation spokesman for Merkel's party in the lower house of parliament, said in an interview.

Deutsche Bahn will stick to plans to sell its train operations on Oct. 27, though "the market will be the decisive factor'' for any decision to press ahead with the IPO or cancel the project, spokesman Oliver Schumacher said today.

Germany is seeking to lure investors and money managers to Europe's biggest initial public offering this year as equity markets around the world plunge. The yearlong credit market seizure caused bank bailouts to spread through Europe, leading Europe's Stoxx 600 to lose 7 percent, the biggest intraday decline since Oct. 20, 1987.

"Of course, one must follow those developments very closely,'' Klaus Lippold, head of the German parliament's transportation committee, said. "Should it become clear that the railway can't be sold for more than a euro, then one may have to rethink the project,'' said Lippold, who is also a lawmaker of Merkel's Christian Democrats.

Budget Impact

Finance Minister Peer Steinbrueck, whose budget would reap no more than a third of gains from the share sale, has also cast doubts about the project, the Financial Times Deutschland reported today. The government is questioning whether "now is the right time'' for the IPO, the newspaper quoted Steinbrueck as saying.

Berlin-based Deutsche Bahn bundled its train divisions into a new unit, DB Mobility Logistics AG, in May in preparation for the sale of a 24.9 percent stake. The government estimates the IPO will raise 5 billion euros, two-thirds of which would be used to increase the railway's capital and upgrade infrastructure. The parent company and its track, stations, and communications will remain wholly state-owned.

"One should seriously consider to postpone the IPO rather than selling Deutsche Bahn at a loss,'' Peter Hettlich, deputy head of parliament's transportation committee and a Green Party lawmaker, said by phone. "In such an evil market environment, it would be utterly irresponsible to see this thing through.''

See also:

D.Bahn, govt to mull IPO price range Thursday

Reuters: October 7 2008

FRANKFURT/BERLIN - Deutsche Bahn AG will get an initial indication on Thursday of the price range for its planned flotation, allowing a decision on whether to go ahead with the IPO, banking and government sources familiar with the situation said.

Deutsche Bahn executives are due to meet with the government steering committee for the IPO on Thursday to discuss the price range and analyse the potential proceeds for the public purse, a government source said on Tuesday.

Deutsche Bahn and the Transport Ministry declined to comment, but doubts about the timing of the part-privatisation of the rail operator have grown amid sharp falls in share markets around the world.

The IPO would be Germany's biggest stock market flotation in eight years.

German Finance Minister Peer Steinbrueck on Monday questioned the launch of the Bahn's transport, logistics and service business unit, now set for Oct. 27. "At some point one has to consider whether now is the right time," he said.

A Deutsche Bahn responded by saying there had been no negative signs from the market so far and that investors were looking for safe assets.

Deutsche Bahn board member Georg Brunnhuber told Reuters demand for shares was strong, notably among institutional investors, and said there was no reason to put off the IPO.


"There's no reason for a delay," said Brunnhuber, a member of Chancellor Angela Merkel's conservative Christian Democrats. "According to my information, demand for Deutsche Bahn shares is even higher than the supply."

Brunnhuber said he had recently discussed the matter with Merkel and had not detected any inclination on her part to delay the flotation. He criticised Steinbrueck, saying the minister's comments had caused unnecessary uncertainty.

Sources from the banking consortium handling the IPO have said investor interest is broad-based and sustained but bidders are likely to demand a price discount because of the financial market ructions.

Analysts have progressively scaled back estimates of what they expect the IPO to raise to as little as 4 billion euros ($5.4 billion), from up to 8 billion euros originally.

Since announcing the IPO date on Sept. 26, Deutsche Bahn has been adamant the IPO would go ahead in October as planned. The subscription period for is due to start on Monday.

An IPO might be considerably harder to pull off next year, given the threat of recession, if Deutsche Bahn was forced to delay, a banker involved in the privatisation said this week.

Shares representing 24.9 percent of Deutsche Bahn's Mobility Logistics unit are due to be offered to private and institutional investors inside Germany and to institutional investors abroad through a private placement.

The global market for IPOs collapsed in the third quarter of this year in its worst performance since early 2003, data from Thomson Reuters has shown.

(Reporting by Jonathan Gould, Philipp Halstrick and Kerstin Leitel in Frankfurt and Markus Wacket in Berlin; Editing by David Holmes)

RMT talks initiative aims to break deadlock in signallers’ dispute

RMT: October 7 2008

SCOTLAND’S BIGGEST rail union is to table a fresh initiative at talks with Network Rail tomorrow (Wednesday) afternoon aimed at breaking the deadlock in the dispute over rostering agreements.

RMT says it has put together a new formula, in line with the national rostering principles, which it hopes will allow Network Rail to move towards a settlement of the dispute, which has seen 450 signallers and supervisors on strike since noon today.

"Our members have given a magnificent display of solidarity today, and we now need to see Network Rail move towards us if we are to see this dispute settled before Thursday's second strike begins," RMT general secretary Bob Crow said tonight.

"We will be taking the initiative and going in to tomorrow's talks with a fresh form of words which we hope will form the basis of an agreement, and it is to be hoped that Network Rail will respond in a positive way," Bob Crow said.


Notes to editors: Fresh talks in the signallers' dispute will take place at ACAS tomorrow (Wednesday) afternoon.

The first of two scheduled 24-hour strikes by some 450 RMT signallers and signals supervisors will end at noon tomorrow, and the second is set to begin at noon on Thursday October 9. A ban on overtime and rest-day working began at 00:01 today.

RMT signallers and signals supervisors in Scotland voted by a margin of more than two to one for strike action over the breakdown in industrial relations that centres on agreements on rostering and transfers.

October 6, 2008

Eurostar travellers face disruption with Belgian rail strike

Daily Telegraph: 06 Oct 2008
By Aislinn Simpson

Travellers visiting the Continent by Eurostar could face disruption because of a strike by Belgian rail workers.
Eurostar services to Brussels and Lille will be cancelled today Photo: JONATHAN LODGE

Eurostar services to and from Brussels and Lille will be cancelled today as a result of the industrial action.

It is the latest blow to hit the service after a major fire broke out in the tunnel under the Channel, halting its use for several weeks.

The September 11 blaze, which was caused by a lorry, lasted 16 hours and left thousands of passengers stranded.

In all 32 people, lorry drivers and train staff, had to flee for safety and six were treated for smoke inhalation

The 24-hour walk-out by public sector employees began on Sunday evening, leading to the closure of Brussels Midi station and the rest of the Belgian rail network.

No trains will run between Brussels and Lille, said Eurostar, adding that because of the constraints of the amended timetable caused by the fire, no trains will run between the UK and Lille either.

Eurostar said passengers should change their travel plans. Services are expected to get back to normal after the strike ends.

The last strike by Belgian train workers, employed by the state rail company SNCB-NMBS, caused major disruption to national and international rail services.

As with last time, workers are striking over pay and conditions.

See also:

Belgium braced for general strike

BBC News: 5 October 2008

Eurostar will run no services between London and Brussels on 6 October

Unions in Belgium are preparing to stage a 24-hour general strike expected to cause transport chaos.

Workers are protesting at the rising cost of living and what they see as a government failure to fulfil promises to ease inflation.

The strike will hit domestic transport networks and has forced Eurostar to cancel services to and from the UK.

Belgium has been in political crisis for the past 15 months amid divisions between French and Flemish speakers.

The strike, due to start on Sunday evening, will force the closure of the Gare du Midi and the rest of the Belgian rail network.

Train services from Belgium to neighbouring countries such as the Netherlands and France are also being cancelled because of the strike.

"We have been waiting two years for answers on our purchasing power from the government, so now we are taking action," Rudy de Leeuw, head of the ABVV union, one of three taking part in the strike, told VRT Television.

Some government ministries will also be shut, as well as post offices and some school childcare services, the Associated Press reported the unions as saying.

Business groups said they would take legal action against unions if they tried to picket in an effort to block people or deliveries from entering company premises during the strike, AP said.

Belgian strike halts international trains, port hit

Reuters: Oct 6, 2008
By Antonia van de Velde

BRUSSELS - A nationwide strike over rising prices severely disrupted public transport in Belgium on Monday, forcing the cancellation of all high-speed international rail services in and out of the country.

Picketing outside the port of Antwerp restricted access, although workers at the port itself did not join the strike, Antwerp Port spokeswoman Annick Dirkx said.

Unions are protesting against what they say is the government's failure to respond to rising prices and are urging it to take steps to alleviate the impact of inflation.

They say they want to send a clear signal to the government before it presents its 2009 budget to parliament on Oct. 14.

"Purchasing power is really a point we want to stress," ACV trade union chairman Luc Cortebeeck said when the union announced the protest last month.

In Brussels, all tram services were scrapped and only a fraction of underground rail and bus services were running, a spokesman for public transport company STIB said.

Provincial train services were also hit and the two main rail stations in the capital, Brussels Midi and Brussels Central, were closed.

Frederic Petit, spokesman for Belgian train operator Infrabel, said all Eurostar services linking Brussels to London and Lille in northern France had been suspended until 10 p.m (2000 GMT). High-speed rail services to France, the Netherlands and Germany were also suspended.


Motorways were clogged with some 300 km (190 miles) of traffic jams between 7.00 and 7.30 a.m. (0500-0530 GMT), about 100 km more than on a normal day as more commuters drove to work, said Glenn Lamon of the Belgian automobile association Touring.

A Norwegian traveller who arrived at Brussels Central hoping to get to the Netherlands, only to find all services cancelled, expressed the frustration of many.

"It's always the same thing with a strike, that you are hurting an innocent person. That is the problem with a strike, but it's the only weapon workers have," said Finn Junker.

Workers at supermarket group Delhaize and at Carrefour's hypermarkets staged industrial action in Brussels and in the country's southern region of Wallonia.

The strike also halted production at an Audi plant in Brussels, according to a union official.

He added that there were no stoppages at the Belgian plants of Ford, Volvo and Opel.

(Reporting by Antonia van de Velde; editing by Keith Weir)

October 5, 2008

Talks to resume on Monday (October 6) in Network Rail Scottish signallers’ dispute

RMT: October 3 2008

AFTER A day of talks aimed at resolving the dispute between Network Rail and some 450 RMT signallers and supervisors in Scotland held today in Glasgow at conciliation service Acas, talks will resume on Monday morning, the union confirmed this evening.

Strike action remains scheduled to take place between noon next Tuesday, October 7, and noon on Wednesday October 8, and again between noon on Thursday October 9 and noon on Friday October 10, and a ban on overtime and rest-day working is also set to start at 00:01 on Tuesday October 7


Notes to editors: RMT signallers and signals supervisors in Scotland voted by a margin of more than two to one for strike action over a breakdown in industrial relations that centres on agreements on rostering and transfers.

October 3, 2008

Top Network Rail chiefs to go in shake-up

Times Online: October 3, 2008
Marcus Leroux, Angela Jameson

Sir Ian McAllister is to step down as chairman of Network Rail, following criticism of the state-backed company’s performance.

Sir Ian, 65, was criticised for the engineering overruns that caused delays for thousands of passengers at the turn of the year. He will step down in July 2009, confirming an open secret in the rail industry that he was preparing to leave.

Network Rail, which owns and operates Britain’s rail track and signalling, as well as most big stations, also announced that Ron Henderson, its 62-year old finance director, is to retire.

No replacements were named but headhunters have been working with Network Rail since the summer and will advertise for a new chairman this weekend. One person who has been linked to the job is Rob Holden, the chief executive of London & Continental Railways, who was responsible for bringing the high speed Channel Tunnel rail link to St Pancras, on time and on budget.

Sir Ian was attacked by the House of Commons transport select committee in July for failing to inject a sense of urgency to the operation.

The committee, referring to Sir Ian’s explanation that he did not go into the office so as to avoid getting in the way, said in a report: "We fear that the lack of a sense of urgency manifested by the chairman over the new year period, as well as when he appeared before us, is symptomatic of widespread complacency within Network Rail.''

The MPs also attacked Network Rail executives for taking “extraordinary bonuses” despite what they described as a catalogue of failings.

Sir Ian, who was instrumental in setting up Network Rail from the wreckage of Railtrack, which was put into railway administration by the Government in 2001, said: “Network Rail has delivered substantial improvements in the safety, reliability and efficiency of the railway over the past six years.

“Safety is at record levels, train punctuality is now above 90 per cent, and we are on track to reduce cost by around 30 per cent by the next annual general meeting. I have led the board for over six years now and a great deal has been achieved in that time.

“As the company enters a new phase in its development, it is entirely appropriate that a new chairman helps take the company forward.

“The next challenge is for Network Rail to help deliver an expanded and enhanced railway to meet the growing demand from passenger and freight customers. My role now will be to help find a replacement and see through a smooth transition.”

October 2, 2008

Cutting free police travel will result in more attacks, says RMT

RMT: October 2 2008

REMOVING FREE travel from Metropolitan police officers will result in more attacks on transport workers and passengers, specialist transport union RMT warned today.

Offering police officers free transport helps prevent some attacks and should be extended to all forces to help stem the rising tide of violence faced by transport workers, the union says.

Responding to reports that the Met force was under pressure over the £24 million ‘cost’ of free travel for its officers, RMT called for all transport companies to be obliged to carry police officers free of charge.

The union is campaigning for better protection of transport workers, highlighting the year-on-year increase in attacks on staff and calling for co-ordinated action to tackle the problem, as well as better legal protection for transport workers.

“Free travel for police officers was introduced by the Met in the 1970s to help stop the rise in attacks on transport staff – and it does help,” RMT general secretary Bob Crow said today.

“Every Met officer who uses free travel on buses, Tubes and trains intervenes on average three times a year to stop or prevent trouble, and it is clear that ending the scheme would result in more transport workers and members of the public being attacked.

“Just as all transport workers should receive free travel as a matter of course, police officers should be able to expect it as well – and it should be extended to every force, not just the Met.

“The human cost of violence against transport staff is growing, and it makes sense for every transport operator in the country to carry police officers, whether on duty or not, for free.

“It should not be seen as a perk, and it certainly shouldn’t be used by private transport operators as a profit-making opportunity.

“It is another sign of the lunacy of privatisation that there is a price tag attached to carrying police officers at all.

“The British Transport Police already need a huge increase in resources to be able to respond to the calls it already gets, but ending free travel for police officers on cost grounds would be a massive step in the wrong direction,” Bob Crow said.


Notes to editors:

Official figures from the Rail Safety and Standards board show 4,865 reported assaults against rail workers, or 13 a day, in 2007, up from 3,179 in 2002.

That figure does not include London Underground, where there were 2,064 reported assaults during 2006/07 – a 17.5 per cent increase over the previous year.

The bus industry has been so fragmented since its deregulation and privatisation in the mid-1980s that industry-wide assault figures are simply not kept.

A recent RMT survey of its members suggests that assaults of transport workers are under-reported by at least 36 per cent.

The survey also showed that 40 per cent of incidents reported to the BTP were not attended – but 51 per cent of those that were attended and investigated resulted in successful convictions.

RMT’s transport Workers’ Charter of Protection, launched last month, demands:

* Workplace violence policies that adequately protect our members.
* Policies that provide aftercare and counselling for staff.
* Zero tolerance on violence at work and maximum penalties for offenders.
* Training for staff in dealing with conflict.
* Consultation on additional security measures.
* Consultation on risk assessments of high-risk areas.
* Elimination of lone working.
* Investigation of incidents by employers and the police.
* Reporting of all incidents by victims.
* Improvements to the travelling environment.

Early Day motion 901


Tabled by John McDonnell and signed by 75 others to date

"That this House applauds the vital work of Britain's transport workers who, as essential public servants, deserve to be treated with dignity and respect; believes there is a clear responsibility on the Government together with employers in the rail, ferry and bus industries to take all the necessary steps to prevent staff assaults and provide care for those who are assaulted; further believes that reducing staff assaults will help reduce anti-social behaviour and provide a safer environment for transport users; therefore supports the aims of the campaign of the Rail, Maritime and Transport Workers Union which seeks firstly to raise awareness with employers and the public, secondly to secure the strongest possible legal protection for transport workers against assault, thirdly to establish effective cross company forums in each of the rail, bus and ferry industries and finally to persuade transport employers to adopt best practice when developing policies to prevent staff assaults and provide care for those who are victims of assault."