Morning:
8°c
Has there ever been a fiasco as bad as the railway privatisation? Since 1994, we have had the most complex structure imaginable inflicted on what was then the most cost-effective railway in Europe in terms of taxpayer support. In 1994, the rail network cost £1.6 billion. By 2005, it was nearly £5 billion.
Hard to imagine now but the old British Rail was actually getting its act together (albeit very late in the day) when the great sell-off took place. Until then, there had been marked improvements in productivity and efficiency.
A new management structure had been installed, with one manager put in charge of each line - with the buck stopping there. It was a railway run by seasoned professionals - and not many of them, around 300 in total.
Since then, because of the huge amount of franchises, contracts and the sheer, mind-bogglingly convoluted nature of the system, the number of managers running the trains has soared into the thousands.
In the past decade and a half, we've seen a permanent state of crisis in rail management, from the scandals over the vast profits out of the sale of rolling stock leasing companies to Railtrack's demise to the formation of Network Rail, to constant dramas over who is in overall charge.
Another clue as to the nuttiness of the enterprise comes from the fact that the franchise bids themselves (just making the bids, not actually winning) eat up money (the process can cost up to £40million for a big one).
And now that franchise system could be under threat after the debacle of National Express. Even those principally involved don't have a clue. Take Richard Bowker. He ran the Strategic Rail Authority, went to National Express and then bid far too much for the East Coast Line. The Government has had to step in because National Express can't make it pay, and has renationalised the service. Lord Adonis, the Transport Secretary, says the Government may have grounds to terminate National Express's two other rail franchises.
Department for Transport lawyers are examining whether to take over East Anglia, which runs all the trains from Liverpool Street including the Stansted Express, and C2C which operates out of Fenchurch Street to Essex. As for Bowker, he has cleared off to the Middle East. It's an overused phrase but where the railways are concerned, you really can't make it up.
If only the then Tory government had listened to the industry's wise heads at the time of privatisation - those such as Sir Bob Reid, the last BR chairman - who did not object to privatisation at all but said "privatise us as a whole".
The Government could have built on BR's growing success, given it stability with a 10-year pledge on subsidy and said: "If you can save money, keep the money and plough it back into investment."
Management bonuses would have come from better train punctuality and bigger passenger numbers. All the advantages of an integrated railway, in terms of lower management costs and better utilisation of rolling stock, would have been joined by market disciplines introduced from privatisation.
Plus the railway would have had access to the markets for any further need of capital. Certainly, the huge increases in the cost of West Coast Main Line modernisation would have been avoided if experienced BR managers were around to sniff out when the contractors were trying to pull wool over the eyes of Network Rail. Meanwhile, in the rest of Europe, their railways proceed without constant upheaval.
Certainly, there have been changes and private capital has been introduced, but gradually, and the main focus of continental European managers seems to be on investment in new tracks, expansion plans and capitalising on rail as a powerful green resource.
In France, four new TGV lines are being built or planned. In Spain, they have gone high-speed crazy, as a supposedly bankrupt country with no rail tradition builds new lines galore and by 2020, aims to have 10,000km of high-speed lines connecting all the nation's provincial capitals and accounting for 90% of the population. Germany has 1300km already open and another 378km under construction. And here? Cuts in infrastructure spending being mooted could shelve Crossrail for a decade and will put any further high-speed lines, aside from the 68 miles from the Channel Tunnel, on hold for even longer and make Network Rail's dream of a much less carbon intensive railway by pursuing a huge programme of rail electrification, yet another pipe dream.
In the meantime, you can guarantee that our rail managers' time and energy will be diverted to more politicking over the franchise system, instead of running the trains on time.
Our politicians and the civil servants who advise them should hang their heads in shame.
If Darling wants to improve the City he could start by quitting
SO the Chancellor of the Exchequer, who received taxpayers' money for a flat at the same time that he was receiving rent from a tenant, thinks that bankers should "get real" and "need to be brought back to earth" does he?
If Alistair Darling had any decency left, he would quietly exit the stage rather than treat the City to lectures that only invite derision and ridicule.
Darling is a spent force in the City - so much so that when his name came up in conversation with a senior banker last week, there was laughter.
Am I missing something as well, or isn't the Chancellor who is worrying over the return of the bonus culture the same person who had ultimate sanction over Stephen Hester's near-£10 million remuneration package? As the 70% shareholder in Royal Bank of Scotland, the Treasury (prop. A Darling) could have put pressure on the bank to reduce Hester's pay. Instead, the deal was approved.
Darling says: "It is very important, from the Government's and the regulators' point of view, not only to act together, but that we are seen to act together."
So keen was the Prime Minister not to act together with Darling that in the recent reshuffle he wanted to replace him.
Make no mistake, the City needs lessons in how to behave - we cannot let the old ways which caused such devastating damage, to return.
But it doesn't need them from this discredited, lame-duck Chancellor.
BlackBerry Index time
This summer holiday I intend to apply the same barometer to gauge just how much business is being done in the City that has stood me in good stead these last few years.
It's the BlackBerry Index - how many banker City-types are huddled over their BlackBerries on their sun-loungers, busy scrolling and typing away, while everyone else is enjoying themselves.
When the boom was at its peak, they were an unmistakable sight. Then, last summer, there was a marked change - the dreaded BlackBerry was not so much in evidence and they were reading books and actually playing with their children.
It will be interesting to see if the increase in activity I've been hearing about in the City these past few weeks is for real.
I will let you know.
