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Railway Privatization: Why is it so disruptive?

In the wake of measures taken throughout Europe to privatize railway systems, we have to be thinking about the right way to go about it. Could time be the answer?

Just over a month ago, French Prime Minister Edouard Philippe unveiled a series of legislation that would lay the legal framework for future privatization of the French national Railway Corporation (SNCF) and abolish rail workers’ special employment statut. These moves prompted France’s rail workers to launch a three-month period of strikes (otherwise known as “les grèves”) in response to reforms outlined under Emmanuel Macron’s administration.

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Photo from: Tage Blett

Two weeks into France’s grèves, I’ve been hearing a lot about disrupted commuting to work, increased road traffic, negative effects on the economy. But, what I’ve also heard about is people’s worries about privatization.

 So, what does it actually mean to privatize public transportation?

Well, let’s start with a simple definition of privatization: privatization refers to shifts from the public to the private sector. For trains, this means that ownership of the operation of railways passes into the hands of private companies who then control trains, their infrastructure, maintenance, frequency, the cost of their use, and so on.

In other places where transportation has been privatized, like the UK, there have been mixed feelings about whether this transformation has been successful. On the one hand, the UK has experienced a rise in things like volume of trains, and people seem to be riding trains more and more. But what we have also seen are the dwindling of maintenance and safety, a decline in both speed and punctuality, overcrowded trains as well as a stark rise in train fare costs.

Going further, privatization cannot be sighted as the sole reason that people are now increasingly taking the train. Possible reasons for increased transport could be more so a response to economic growth and increasing road congestion.

Since privatization began in 1993, the UK has seen three major train wrecks that have resulted in 42 deaths and around 600 injured. Some have attributed this, in part, to the “deskilling” of worker knowledge in the industry that came after deregulation. Although others argue that this more than likely would have happened in the hands of the government too, shouldn’t we be holding private entities to a higher standard? Isn’t that part of the argument to privatize in the first place?

Taking this dwindling quality with the fact that the cost of train fares has risen a whopping 208% in the last 20 years for some of the UK’s most major lines doesn’t make this sound any more appealing.

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What happened?

British Rail, which owned and operated nearly all of the country’s railways, underwent a total privatization in 1993. The infrastructure was called “Railtrack,” and its shares were sold off to the public, awarding dozens of franchises to private companies to operate trains on different lines.

“A key reason this latest privatization push failed is vertical separation… Before the railways were nationalized by Clement Attlee’s Labour government in 1947, they were run by four major companies, each of which controlled its own infrastructure and operations.” – Stephen Smith, Citylab

Today’s privatization looks a whole lot more messy. Seriously, think about this in realistic terms. You take an entity that was once owned, managed and operated under a unified, vertical structure, and then you suddenly separate it all and put it in the hands of private companies who aren’t necessarily used to working alongside one another – the infrastructure, rolling stock, and operations. This was the plan’s fatal flaw.

While doing my research for this piece, I started to ask myself if this whole privatization thing worked anywhere. And, if so, where…?

Well, Japan, that’s where.

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Similar to Western countries, Japan’s railway history starts off with little government intervention. But then, throughout, the 20th century, they went down a different path than the rest of us.  While Europe and North America nationalized, Japan’s industry upheld its private sector.

As the private sector evolved and proved itself to be more efficient than state-run railways, there was even the privatization of the Tokyo Metro.

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If this isn’t efficient, I don’t know what is.

Though crowded during rush hour, the rail networks of Japan’s three largest metropolitan areas – Tokyo, Nagoya, and Osaka – are perhaps the most efficient in the world. The country’s flagship high-speed line, the Tokaido Shinkansen, has operated for almost half a century without a single derailment or collision, and in 2007, its average departure delay was a mere 18 seconds along its 320-mile route.” – Stephen Smith,  Citylab

And yes, we can say that privatization had something to do with it, but it more importantly has to do with how Japan privatized: on the long term, over a century’s worth of evolution to come to what it is today.

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The move to privatize France’s railway system comes from an initiative headed by the European Commission, which allows private-sector competition on commuter rails by 2020,  just two years from now.

Thinking about the examples cited above and coming back to France (and Europe) today. We have to ask ourselves: is it such a good idea to so suddenly privatize railway systems?

If we’ve learned anything from the past, it’s that a sudden merge and restructuring can be messy, especially in a place like France. And, looking even further down the line, I can’t help but wonder about where companies like Uber and Lyft stand in all of this.

The latest example is a new service from Lyft called Shuttle, which offers passengers a fixed-fare, fixed-route trip in a shared vehicle — in other words, a bus. Or rather, a private car acting like a bus. Uber has been testing a similar concept in Manila, dubbed Uberhop. – Leslie Hook, Financial Times.

Although this service isn’t as appealing in cities like Paris or London as it is in cities across the US (considering how horrendous its public transport system is on the whole) we still have to think about what other ideas are to come in European cities.

What if Uber invests in actual buses? Self-driving buses? What about automatic trains?

And, thinking back on how disruptive these services have been to local Taxi companies, for example, what does that mean for bus drivers, maintenance workers, service people, and so on?

If we want privatization to not leave people disadvantaged, jobless, angry at fare costs and maintenance, transportation systems must be taken as part of extremely complex urban settings. They must be seen as integrated into spaces that have been carefully developed and planned over centuries to become what they are today. And should therefore be handled in a similar, gradual manner.

This is why Tokyo lies as such a great example to show the difference between gradual privatization and abrupt privatization. Allowing time for these processes to come to fruition also allows for adaptation, organization, research, improved infrastructure, and so on. To me, this quick switch of hands from government to the private sector screams disaster – maybe not that far, but if we’ve learned anything from the mistakes of the UK, we know that these things need time and careful planning.


Danya Kiernan is from Boston, MA. She did an MA in Conflict Studies and Human Rights at Utrecht University in the NL, taking particular interest in political economy and the environment.

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